All our permissions was signed and we were ready to increase production output. VAT was still a problem, only small amount was re-imbursed from time to time. I was think of starting a Danish Association, because we all had the same problems and my thought was to put maximum presure on the tax authorities by representing many companies. Instead I was contacted by European Business Association in Kiev and I started that kind og organisation.

2005

Production increasement to 140.000 pair of shoes. We started the evening shift with low effiency to have time to educate the people. Status of employee was 45 people.

The Parliament adopted a law on VAT reimbursement, which makes it impossible for new investors receive VAT back on the first 12 month of establishing their company. The VAT is simply frozen and it is a big cost for investors to freeze 20% of their investment. Furthermore the Parliament cancelled Free Ecomical zone and some special Custom regime's which had a big impact on many foreign investors. Those things together greated big problems among investors and in EBA we worked hardly to help finding other solutions for the investors.

2006

Production increasement to 180.000 pair of shoes. We worked with full 2 shift, from 6 am to 11 pm. Also I hired more managers to support the output and quality. At that time we also started to feel the presure from employees and had to encrease the level of salaries more than normal index. Our quality was the best seen in our company.

Sika 2006

In EBA I was invited by our Governor to Kiev to have a talk with the President of Ukraine, because the Oblast Administration and Tax Administration had the feeling that investors were not coming because of the law on frozen VAT. Unfortunately the President was not entitle to solve the problem, but ask me to send an official letter to the Parliament concerning the VAT problem. The members of EBA started to get the operational VAT refunded, but new companies were catch in the new law from 2005. We signed memorandums with authorities to help investors.

2007

Sika footwear has reached a historical high production output 208.000 pair and we moved the last production from our subcontractors in Estonia to Ukraine. . Our quality and production output was good and we were ready to take it over. In the end of 2007 we were 85 people in the company and was also still growing. In 2007 we had no problems to get our VAT back.

In EBA we have found a hole in the system to avoid the problem of frozen VAT and could advise investors solutions of starting business in Ukraine. In year 2007 we also signed several memorandum with different authorities to lobby interests of members of EBA. VAT re-imbursement was still running normal. Many top authorities was change in that year and I had to re-sign all menorandums all over again to protect the investors. I decided to leave EBA as the Chairman of the Board, because of other challanges. But still working with EBA as the Advisor of the Board, to help the new Board on the right track. EBA have around 125 members who are serious investors on the territory of Western Ukraine. EBA in the whole Ukraine have more than 700 members (www.eba.com.ua).

2008

Production is only on budget this year and I expect us to produce around the same as in 2007. We have now space problems and can not develop bigger production output. We are trying to find a suitable landplot to build a new factory 1,5 times bigger than the one we have now. But the new legislation on land rent and buying land create problems. It is not possible "just" to request the City Hall for such land plots. Now the rules is that all land plots shall be on an auktion and the price is only mentioned when the auktion have finished. It mean that we kan not budget it which is a hole in the investment plan.

Ukraine is now on the economical level that Sika Footwear should start thinking of it as a sales market, which is also in our strategy for this year.

Some of the most important aims in EBA is networking, lobbying and communication. And this is also a need in a country as Ukraine, if the investors do not have the already established network, it will be difficult to operate in Ukraine. Doing my 4 years as Chairman of EBA in West Ukraine, I have got many useful contacts, friends and people who also see Ukraine in the EU by time. Now I try not to work much in EBA and am more like a support when official speeches are requred, at Board meetings and advising new investors come to Ukraine.

See more photos here

May 2008 I become the Advisor of Danish Investment Fond in Ukraine, it is a financial institution under the Ministry of Foreign Affair of Denmark.

When looking back on the year 2008 it started very well in the beginning of the year with high economical development. Ukraine had an inflation on around 20% but the Ukrainian currency was kept on a stabil level and have been that since I started in 2003, but in June were the world crises started, Ukraine became a country with unstability on the economical level. Currency was going up and down as I have never seen before in any country. The devaluation compare to USD was in July 4.25 when in the end of the year it was more than 10. It ment that Ukrainian society became poor in only half a year. It created a big problem for the Ukrainian population because many people have taken loans in USD and to pay for cars, apartment, etc. became expensive. A dept of 10.000 in USD loan in Ukrainian currency was in July 42.500 UAH and in the end of the year the dept became more than 100.000 UAH. Also the possibilities to pay back the loans became difficult because a pay back on 1.000 USD growed from paying 4.250 UAH monthly to paying more than 10.000 UAH. So the situation also put hard presure on the salary market, because people could not pay off their dept. Expences as utilities also grow up with the gas prices from Russia, so 2008 was a diffucult year for the population of Ukraine. But to be a foreign company who are only exporting and billing in USD or EUR is good, because they receive in the foreign currency and exchange to the high rate.

Other barrier appeared when the Parliamant tried to cancel tolling scheme (the veksel system for importing raw materials), which would stop all foreign investment coming to Ukraine and investors would leave the country faster than they came. But EBA played a big role in avoiding that law to be signed. The frozen VAT is still a problem and the Parliament made it a real problem because of the crises. On the Oblast level EBA had an agreement with the Tax Authorities that all VAT under 100.000 UAH per month is re-imbursed to EBA members. If the amount is more than 100.000 UAh per month, there will be no guarentee, because it is out of their hands and decision can only be made in Kiev.

2009

Sika production decreased by apx. 8% because of the crises, still we believe we will get faster out of the crises, because we use the small down time on development new models for the future. We have decided not to make an investment on new production facilities now, we want to see what Ukraine will offer of political issues in 2009, that we will not be in a situation trapped in a country with barriers.

I was asked to take back my old position as Chairman of the Board in Western Ukraine, to help companies solve critical problems for their investment and I have accepted but only for year 2009. It is time demanding and but I will do it, because request like that give me strong feelings that EBA and authorities cooperation can be developed more. I am also interested to help Ukraine out of the crises and to attrack more investment to Ukraine, but it can only be done by help of the Government.

The foreign investment in Western Ukraine has become smaller, because of many bankrupcy not only investment in Ukraine, but a chain reaction of bankrupcies all over the world. I would say that Ukraine is still a country to place investments, the possibilities to make good and strong business is still interesting. The devaluation of the Ukrainian currency for exporters (production with sales in other countries) are very attractive.

2010

The production started where we left in 2009, within a few month we were up on the same level as 2008. A positiv trend in a crises time. More and more orders came and we were working faster to reach the production goals. Our new designed modells were selling very good.

The year started with problems on the country level. President election was on the agenda. Ukraine as a country was in fear of something unknown. The orange revolution did not prove anything for the population and people in general was telling "it does not matter who we vote for, it is the same result". It was not a safe situation. The foreign investors fear the worse. If the Kutzma parliament will win, it will be hard time to pass for the next 5 years. We had the same in the past and was pressed hard at that time. Result of the election was Yanukovich, the old Kutzma was back. All top authorities was to be changed all over the country and we could foreseen proplems and solutions. The parliament started to promise that the VAT situation after May would be normal, but we will see what will happens.

I resigned again from EBA Board, not to come back any more. On the 26th of January, The Danish Ambassador to Ukraine Michael Borg-Hansen and I started the Danish Business Association www.dba-ukraine.com  to be able to give full support to Danish Investors only. The Danes were the foundation of EBA when we started it Western Ukraine. The Danes has always been active and gave me support and motivation that it was the right decision to do. DBA started up by signing memorandum on cooperation with all top authorities that we have a base to work from. We had a fast implemtation of our work and support to each other which gave favourable conditions for Danish Investors. After 7 years working in Ukraine, I know that without connections to the top, you will not be able to solve problems.

2011

Production goals started up with 220.000 which is equal to 950 per day, which we reached! Our network of sales opportunities got bigger and we came into the arhiculture with at good start of sales. We continuely develop new areas for sales to get a place on the market in Ukraine. It is a huge country with many feeds!

Under the new President there were many developments, many thing got better and easier, but the ongoing problem with VAT still exist. Companies were suffering from it and the working capital was not there. The Ambassador and I have battled with the tax authorities to give all VAT back. Most of the Danish companies VAT was solved, but some of the big who has more than 100.000 UAH still faced problems. In fact we have made an agreement with tax on the local level that all VAT would be reimbursed as normal precedure and it was done. Luckily a day in march the Ambassador called me and to me the news, that HRH Crown Prince of Denmark will come to Lviv to visit Danish Business Association. It gave us a card that should be played correctly for all Danish companies to have their VAT back. HRH should come in June and I was responsible for all his probram in Lviv. The authorities was informed and I sent the letter with problems Danish Investments are facing, with a request for it to be solved before HRH will arrive. We had several meetings where they tries to solve the problems they could, but the VAT over 100.000 UAH was not solved. I put preasure on the situation and informed them the negative impression from The Crown Prince to hear that Lviv Oblast DO NOT support Danish Trade and Investment in Ukraine. 1 days before The Crown Prince arrived ALL VAT was reimbursed to ALL companies. It is fully the earnings of The Crown Prince and We thank HRH for it! We had only 1,5 days to go trough a tight program which started with meetings with City Hall and Oblast Administration. Those meetings brought DBA to a much higher level and the officials respect for DBA is stated. After that he saw 3 small and medium companies NG Metal, Scanlak and Guldman. The visit of those 3 companies allso gave then a new road! He saw  the reality of which kind of members DBA have, they are not big, but it is DBA. After that we had a common meeting with all Danish Investors in DBA (only the Dainsh representatives) where each company had the opportunity to present themselves and have a out of program chat with HRH. I have arranged a dinner for the whole delegation which were HRH Crown Prince Frederik, The Royal Danish Court, The Ministry of Foreign Affair and The Danish Ambassador Michael Borg-Hansen. The visit promoted the cooperation between our 2 countries and we thank all for the support to DBA!

Late on the year I was contacted by the Solar company Progeny Solar who wanted to start production of solar panels in Ukraine. I decided too support that project and helped them to startup their business in Ukraine. They had the plan to scale up their production to 100 MW within 18 month and I saw that as a challange in itself. The company got established and the buildings were found. The first panels was produced in December.

2012

SIKA continued optimizing production and the goal was 233.000. We had good quality and stable workers team. We started new technologies in shoeproduction which optimized our costs and development. We are on the edge of space, so we rented 500 m2 warehouse nearby SIKA and moved our warehouse to that location. We made a new logistic plan for the production to have it 100% flow and limit wast.

Progeny Solar developed and I became a co-owner by buying 1% and got into the Board working with the top influency people on the solar sector. The Board is presented with the 2 main shareholders William Brady and Edward Ma, Bill Fay from Hollywood who is the owner of Legency movies (Batman, Hangovers and a lot of other movies), Terry Baily who did a 4 billion $ contracts with Evergreen Solar and 3 other high positioned members. Exiting how life gets opportunities. In 2012 the Ukrainian Government plan to make a local content law of 30% in 2013 and 50% in 2014. It makes the company a strong position in Ukraine as there are only 2 producers. Right now Ukraine is one of the best investment places in the world, because the feedin tarif 5 times higher than the cost of electriciy. It makes os in a position to sell in 2013 500 MW or more. We are only 2 companies who can preform the 30% local content and it makes us in a good position with monopol. The sales has already started in Ukraine, Denmark, USA, Greece, Dominica Republic, Holland and other places. Europe will come up with a anti dumping tafik against China, America have already done it. We are moving forward fast. www.progenysolar.com

The huge event in 2012 is EURO 2012 football championship. I huge interest and debate for Ukraine all over the world. The event should higher the economy and thousants of fan should ente Ukraine within the summer of this event. The border precedure became easier, the roads were renovated, hotels were growing up - the country certainly was highlighted to the world. DBA was in contact with The Danish Football Association to support the Danish football team coming to Lviv to play 2 time. DBA sold more than 500 tickets to the DBA companies and Ukrainian officials. HRH Crown Prince Frederik informed me  that he again would visit Lviv for the Denmark-Portugal match. Again I was making the program and took the Protocol. All the preparation for his visit this time was exiting as it was not only a visit to DBA, but many other as UEFA and DBU. So working with all those people was a challange for me. After his arrival we went to DBU Sponsor party to meet with the companies/persons sponsering the Danish Football team. After we drove to the new Lviv Arena where the match should be played to go to the Carlsberg VIP lounge. It was good to meet with thse people from Carlsberg. We went to UEFA VIP lounge to meet with Platini and get something to eat before the match. The stadium was full and we could see the red and white flags everywhere. Standing there together with Crown Prince Frederik and see all this makes me a proud Dane! A pity Denmark did not win, but it was a good game!

This year the Ukrainian goovernment introduced "automatic VAT refund". If companies could fulfill 5 demands within the company they would go for the automatic refund. 80% of DBA member qualifyed in the first round and other became later. It was working fine for some monthes and then some did not get the VAT. Of cause before the Crown Prince arrived all got the VAT back, with thank to HRH! But the problem was not solved. The Danish Ambassador and I was fighting to get normal conditions and we did make some improvements by using much times on meetings. Evaluation by the end of the year is that 98% companies gets their VAT back timely, but are asked  to prepay company taxes up to 50% which we can not accept. The last 2% have no demands. We will continue work with that matter in 2013.

2013