For some, Eastern Ukraine is associated with war, pollution and poverty. But for Scania it is a land of opportunity.
Sitting among hills of mine coal refuse, Kramatorsk city – a former industrial powerhouse – has been promoted to the main city of the Donetsk Oblast after Donetsk, the obvious main city of the region, was taken by Russian backed separatists.
Though Kramatorsk does not have the same industrial power as it used to during the Soviet Union, it is still a centre of both coal mining and production of heavy equipment. That is also why Scania has a local sales and service office there.
“The sales are growing year on year, but if there was peace here, we would be growing even faster,” Victor Klimko, the head of the local department tells Ukraine Nu in the Eastern town of Kramatorsk.
Just like Kramatorsk has been a substitute for Donetsk on a city level; on administrational level, Kramatorsk has also become the substitute home for the Scania workers who used to work in Donetsk.
“I have worked for Scania for 20 years. I used to work for Scania in Donetsk, but we lost the operation four years ago,” Klimko says.
Rocky road
Losing the operation in Donetsk was, of course, a big hit to Scania in Ukraine. First of all, it was a rather big point of both sales and service, but Donetsk and the cities around Donetsk all housed big industries, which is good for a company selling trucks.
Still, there is a lot of industry to pick up for Scania in Kramatorsk, where among others the quarry company Vesco is headquartered. They remain the main costumer for Scania Donbas and the main reason for Scania Donbas to be in Kramatorsk.
“We sell around 40 trucks a year and service hundreds of trucks each year. Vesco is our biggest client, and that is also why we are in Kramatorsk,” Klimko says. According to Klimko, the numbers are only going one way: up.
But it could be better. Naturally the war is also hitting businesses, and having access to the businesses and industries in and around Donetsk in the occupied areas would be great for Scania, but it is not only that.
“After the war, there is no investment in our area. If you are in Kyiv, you see them build houses everywhere, but out here, nothing is happening. If we had peace, the investments would come and the sky would be the limit,” Klimko says.
Legal matters
Scania Ukraine has had some issues with the rule of law lately. The company has to pay 123 million hryvnia – about 26 million kroner – to the Ukrainian company «Zhuravlyna» Firm, LLC, which, among other things, repairs trucks and trades in fuel.
The payment is compensation for having terminated contracts with the Ukrainian company back in 2016 and 2017. Scania, which is part of the Volkswagen Group and includes 12 car and commercial vehicle brands from seven European countries, believes that “Zhuravlyna” Firm, LLC has paid the judge to make a decision against the company.
Therefore, Scania has gone on the offensive with major advertisements around the country to make it known that the company feels cheated in the Ukrainian legal system, which have been accused of corruption by many people and companies before Scania.
“We are pretty sure that corruption has played a role in the decision because the verdict has ended as it is with a number of strange circumstances and because the judge announced that she retired the same day after the case,” says Ints Krastins, who is CFO of Scania in Ukraine.
