28 May 2010

Sometimes its like pushing water up hill......

It's not all good news. When I hear that companies like IKEA and HP and Cargills are pulling out of investments in Ukraine its like taking backward steps.

See the article in the Kyiv Post: http://www.kyivpost.com/news/business/bus_general/detail/67908/

IKEA has been here long enough to be no stranger to the unpredictable environment. Having opened an office in 2005, the retailer obtained a land plot on the Black Sea coast in Odesa. With the potential for some 25 outlets across the country, the company planned to debut in 2011. But not anymore, said Ukraine’s country manager Frida Malmquist.

“IKEA has decided to postpone its plans for establishing shopping centers in Ukraine. IKEA will follow the development in the country, and at some point re-evaluate its decision,” she said.

Leaving the Odesa plot empty for now, IKEA Group also sold three plants in western Ukraine at the end of April. They used to manufacture IKEA’s famous furniture for Russian markets. Danish lumber company DDS bought wood-processing firm Sten in Ivano-Frankivsk region. Romania’s Plimat took over Proza furniture factory and Karpaty wood-processing plant from Swedwood, IKEA’s daughter company.

“Ukraine has suffered more than any other western and eastern European countries in terms of main economic indicators,” said Klimenko. “It means that Ukrainian incomes tumbled further than others, so IKEA’s target group has diminished significantly. Klimenko predicted, however, that IKEA would return in the next three or four years.

No comments: