Russia's full-scale invasion in February 2022 did little to shake German pharmaceutical and agricultural giant Bayer's commitment to its Ukrainian operations.
Bayer has operated in Ukraine since 1992 and currently employs around 700 people in the country, and last year announced it would invest 60 million euros from 2023 onwards in its corn seed production facility in Pochuyki, Ukraine.
Bayer Ukraine will incur losses for 2021-2023, but Oliver Gierlichs, managing director and chief financial officer of Bayer Ukraine, told the Kyiv Independent that the losses are smaller than those of competitors and that the company is experiencing an overall increase in market share in certain categories.
The company has also donated nearly 20 million euros in seeds, medicine and other economic aid to support farmers and vulnerable people since the start of the full-scale war.
Notably, in 2022, the company jointly purchased a large demining machine worth approximately $900,000 with the Swiss Mine Action Foundation, and is working to clear landmines in Ukraine. A third of Ukraine is thought to be riddled with land mines as a result of the war.
In a recent interview with the Kyiv Independent, Gierlichs said the key to being able to continue investing heavily in Ukraine during the war was the continued presence on the ground and the resilience of the business community. Ta.
“The cohesiveness of the business community has been the greatest thing I've seen throughout my career,” he said.
As part of the interview series “Ukrainian Business Talks”, the Kyiv Independent met with Mr. Gyelrichs to discuss business development during the war and why investors should come to Ukraine now.
“The unique selling point of being able to contribute to the country's development in difficult times cannot be overemphasized for companies considering investing in Ukraine. Coming now shows a commitment that goes beyond mere opportunism,” Gierichs said.
Kiev Independent: How has Bayer survived almost two years of war?
Oliver Gierichs: Our response to a full-scale invasion has been swift and adaptive. We have remained steadfast throughout these tumultuous times, never ceasing operations. This is of utmost importance to us. Ensuring the continued availability of our products to consumers, patients and farmers has always been a priority.
Our focus has also changed rapidly, with people's safety and security taking priority and reaching new levels of importance.
Our priority became the well-being of our team – a value that has always been high, but now even greater. Our second focus was maintaining business continuity as the situation changed. Third, we asked ourselves how we could help Ukraine. Donations became the vehicle for keeping the vital healthcare and agricultural sectors afloat during this difficult time.
What strengthened us from the beginning was the resilience and flexibility of our employees, which proved invaluable in solving complex problems. Our unwavering support for Ukraine is central to our mission, with almost €20 million donated, notably for agricultural seeds, medicines and financial assistance. Through challenges such as fuel shortages and power outages, we have adapted by strengthening our energy resources and securing alternative fuel sources.
A closer look at our company's development during the war shows that, despite a decline in business from 2021 to 2023, we suffered fewer losses than our competitors and overall increased our market share in certain categories.
Going forward, the company will invest €60 million in expanding its seed production and strategically positioning it for current and post-war assistance to Ukraine. Our focus on growth and investment underlines our commitment to expanding our footprint in Ukraine's future vision.
Kyiv Independent: How do you plan to develop your business next year, taking into account various scenarios depending on how the war ends?
Oliver Gearrichs: Our focus is very clear. We are dedicated to supporting agriculture and healthcare functions, two sectors of vital importance to Ukraine and the core of our business during this difficult time. Our main goal is to ensure product availability on the market and serve farmers and patients. This is essential for Ukraine's resilience and is consistent with the nature of our business. Since the development of war is unpredictable, we have created various scenarios to prepare for all possibilities.
“If the war ends in 2024 or if the conflict becomes protracted, we are prepared for both scenarios. Regardless of the outcome, Bayer is committed to retaining our operations and employees in Ukraine. Our significant long-term investment of €60 million demonstrates our belief in Ukraine's enduring future.”
The Kyiv Independent: What advice can you give to entrepreneurs and international companies to plan for 2024?
Oliver Gearrichs: Resilience is paramount to facing the challenges expected in 2024. For a CEO, leading by example, transparency and clarity are crucial. My approach is to hope for the best, but also plan for the worst by considering all possible scenarios.
The key is to keep the business running, provide stability for employees and maintain their livelihoods. Ensuring their safety and motivation is fundamental, and it's not just about work, but also about contributing meaningfully in difficult situations. Our employees take pride in our company's commitment to our country. Essentially, maintaining business continuity, prioritizing employee safety and fostering motivation are the cornerstones of our strategy.
The Kyiv Independent: From Bayer's perspective, how do you assess the current business environment in Ukraine?
Oliver Gearrichs: Our success in maintaining our business processes and connections with our communities is due in large part to the incredible understanding of our partners and clients of the unique challenges we face today. The sense of unity within the business community has been the best thing I've seen throughout my career. We foster a deep awareness of common challenges and an atmosphere of cooperation. Additionally, we appreciate the open dialogue with governments and authorities who are willing to listen and respond to business needs. In difficult times, we must work together, not against each other.
The Kyiv Independent: As director of the European Business Association, what does the government expect from large companies and what kind of support do companies need in Ukraine?
Oliver Gearich: The government expects major companies, including us, to contribute to current needs and post-war reconstruction.
Our continued investment in high-tech solutions demonstrates our commitment to supporting this country.
However, there is room for improvement to make Ukraine a more favorable business environment. Taking into account Ukraine's particularities, legal and regulatory alignment with the EU is essential. Transparency and predictability of the mobilization process is urgently needed to plan for the workforce and the future.
Kiev Independent: How did your view of leadership change during the war?
Oliver Gierichs: Wartime leadership requires navigating high levels of uncertainty and ambiguity. You must maintain team morale and make quick and effective decisions in the face of constant external forces, legislative changes, market fluctuations, and fuel shortages.
Their presence on the ground in Ukraine has proven invaluable and earned them the respect of the public, especially the expatriates. Being close to their team is key in good times and difficult times. The recognition of their leadership in adversity underscores the importance of being present and approachable.
Kyiv Independent: Does Bayer currently have employees in the military and how does the company support them? Also, are you hiring veterans as employees?
Oliver Gierichs: We currently have employees in the military. We work closely with them, providing thorough support such as continuing salary payments and maintaining various welfare benefits. Our strong internal camaraderie extends to regular collections to provide additional support. We've made sure those we serve receive unique gifts during the winter season to show our dedication and appreciation. We are actively preparing for integration with training programs covering various aspects such as psychological support and effective collaboration.
Kiev Independent: Amidst the hardships of wartime, some entrepreneurs see opportunity. What business development opportunities do you see for Bayer and other companies in the current climate?
Oliver Gierichs: Among the challenges there are also great opportunities, key among which is the opportunity to provide innovative solutions in sectors such as health and agriculture and contribute to the modernization of Ukraine.
The latest medical innovations can have a positive impact on a country's healthcare system, while in agriculture, modern practices such as digital farming offer the potential for resource optimization and improved yields.
Kyiv Independent: If you were to invite other companies to invest in Ukraine now, what message would you give them to get involved?
Oliver Gierichs: For companies considering investing in Ukraine, the unique selling point of contributing to the country’s development in difficult times cannot be overstated. Coming now demonstrates a commitment that goes beyond mere opportunism.
Early investors can benefit from competitive office rates, state support for production facilities, a talented workforce, and more. By investing now, companies can become essential contributors to Ukraine's future and gain unique positions and favorable conditions.
The Kyiv Independent: How have you changed as a CEO and as a person during these two years of full-scale work during the war?
Oliver Gearichs: Resilience has become a central focus for me and my employees. As a people-centered leader, I have further emphasized the importance of empathy, understanding, and leading by example.
The war reminded us of the importance of human relationships and highlighted the need for solidarity and leadership that prioritizes humanity over hierarchy. My values have been recalibrated to emphasize closeness with leaders, leading from the front, and showing calm and composure in difficult situations.
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