EBA Personality: Oleh Yanytskyy, Director of Sika Footwear A/C
Can we start with an introduction of yourself and an overview of your company? How do you position yourselves in the market?
My name is Oleh Yanytskyy and I am 36. I have a beautiful family with three ladies: my wife Zoryana, and two daughters – Zlata and Yaryna. At the company “Sika Footwear A/C” I have worked as the director for 9 years. The parent company from Denmark was founded almost 150 years ago in a town called Herning and our subsidiary company which is located in Lviv, manufactures special footwear for the parent company.
Do you have any plans for expansion? What are your growth ambitions?
My strategic plan for the company is constant growth. To compare years 2003 and 2012, I can say that the number of workers tripled and production increased exponentially. The success is due to the team efforts of highly qualified managers and loyal employees. Of course, new plans need new efforts for improvement because the sales increases in Denmark and Europe depend directly on the quality of products we produce. In general, plans for the next ten years include doubling production and construction of a new factory.
What key market drivers are positively impacting your business?
In the special shoes market the companies which have remained successful have outsourced production to other countries. Undoubtedly, one of the most important factors in our success is the high efficiency of workers in manufacturing. This allows us to even compete with production in China. Previously the low cost of electricity and gas helped, but those days are gone.
What are your top priorities for the next 12 months?
Priorities remain the same – full attention to the staff working conditions, positive corporate atmosphere, efficiency and attention to the needs of our customers and low cost of the manufactured products.
Which business sectors present the most interesting investment opportunities in today’s Western Ukrainian market?
During an economic crisis and with high expectation of an extended crisis, the only successful investments are those made in a reliable sales market. The Ukrainian market obviously cannot be determined as having a high degree of security, so the investor requires a global market. I think the most interesting and promising projects in Western Ukraine are those in manufacturing, which focus on European consumers. Here they can have an excellent logistical location close to the EU border. Moreover, after the crisis the cost of land or production areas have decreased. An additional advantage are the EBA working groups on business investments promotion (in Lviv Regional State Administration, Customs and Tax Administration). This provides very important security for investments.
What is the most important management lesson you have learned?
Up until now I have climbed the career ladder from the very bottom. In any situation I try to put myself in the place of employee to see if I would be happy with a managerial decision. So, for me the priority is the positive atmosphere in the team. For highly motivated and loyal employees there is no unattainable task.
Could you share your business success story?
When I started to work at “Sika Footwear A/C”, the situation was really critical. The number of shoes of inappropriate quality was enormous. The performance of workers was only 30-50% of the efficiency of Danish workers. The owner even thought to move production to China. A decision was made to search for other types of workers and management. The selection criteria for workers was willingness to learn, even with a lack of experience in the shoe industry. An important criterion for workers was a consistent employment history. We also paid attention to whether the candidate was looking for a safe place of work, namely without vacations on their own account (which is frequent in Ukrainian companies) And I can say that we saw excellent results. We recently celebrated the tenth anniversary of our subsidiary company opening in Lviv. For employees working for the company for over 5 years, we paid a loyalty bonus. I want to say that I was very pleased to see that more than half of our employees are “old-timers.” This provides stability in the company, which is very important for performing tasks posed by the parent company. As for the management, I formed a team of professionals who possess basic skills - the ability to take responsibility. As I function only as a mentor, not the controller, each of the managers feel that their result is their personal achievement. And from my own experience I know that this is inspiring.
These and many other steps facilitated the complete transfer of production from Estonia and Denmark to Ukraine. The owner of the company is extremely satisfied with our work, and considers this decision to invest in Ukraine as absolutely correct and successful. The EBA focuses its actions on 7 vectors of economic development- Corruption fighting, Court system and Land reform, Currency regulation, VAT refund activation, Customs Procedures simplification and Technical barriers to trade elimination.
Which one(s) do you foresee as the most vital and why?
For industrial companies such as ours, of course the most important vectors are VAT return, simplification of customs procedures and corruption fighting. These are the barriers that affect my daily activities the most. Since EBA conducts ongoing work in these vectors, I see concrete positive results. And what could be more helpful than work that benefits the entire investment community?
What in your opinion can be done to make investment more attractive in Ukraine?
In my opinion, only radical simplification of the fiscal system may improve the investment attractiveness. The number of taxes should be reduced by between 3–5. Extremely complicated administration of the income tax may be replaced by the sales tax. This way the investor can easily create a business plan for investment. Simultaneously, the investor will know that litigation with the tax administration does not constitute a threat to investment. I know from the conversations with potential investors that the main reason for not investing in Ukraine is not the amount of taxes but lack of security of the enterprise. Even several days blocking of the company by fiscal authorities may lead to contract termination with the customer. Therefore, investors would rather go to Bulgaria, Romania or even China, taking into consideration the likelihood of problems in Ukraine. If we want to bring potential investors to Ukraine, changes must be dramatic. Moreover, Ukrainian companies will benefit from these changes as well.
How do you see the future in your sphere of activity in Western Ukraine ? What are the prospects in this sphere in general? Can the infrastructure support planned growth?
Overall, manufacturing has good prospects. If the practical implementation of new legislation for the processing of raw materials does not deteriorate working conditions, in the coming years I see positive trends. It is a benefit for investors to get a product at a reasonable cost, while Ukraine gets paid taxes fairly. Furthermore when the Ukrainian economy experiences significant growth, domestic market consumption will also be of interest to other companies. The main thing in this situation is not to miss the right moment to increase output for Ukrainian
What are your personal recommendations for anyone who wants to be successful in business?
For the leaders/managers of the company I would advise them to prioritize the employees. I advise them to be a mentor, a leader, but not a guard. A leader should always prioritize teamwork. When the leader is at the top of a “dream team”, all threats to the market or other problems can be overcome.