Thomas Sillesen in Kyiv
2015/06/04
The Russian invasion of Donbas has made many foreign
companies reluctant to invest in Ukraine. Thomas Sillesen, chairman of the
Danish engineering company Biir, told Euromaidan Press about what makes a
business successful, how hippies turned Denmark into the world’s largest
wind turbine manufacturer, and that now is actually the time to invest in
Ukraine.
How did your company come to have an office in Ukraine?
We are a company specializing mainly in providing services for wind turbine technology. At present, we have 100 engineers in Denmark and about 20 in Ukraine, but we hope that the number will soon be 50. Some years ago we arrived in Ukraine because the country is well known for its IT competences and high levels of engineering. We were not disappointed, we have very good employees.
Who are your employees?
They are mechanical engineers which work with engineering. I must admit I am extremely impressed with their general knowledge, this makes us very happy to be here. It’s a pleasure giving them a good job. Some came from a local locomotive factory, some from an electrical company.
Were you not scared away because of the crisis?
We see a huge potential in Ukraine, and can say quite certainly that this potential has not become less. Of course, there is uncertainty for the future, but we are talking about a conflict taking place in only 5% of your country. Apart from that, you have very motivated people that want to change their future, they work hard when they get a chance to work for a company like ours, are willing to learn, but at the same time they have very good competences that we can learn from. The current crisis means currency is very cheap, and that means that investment is very profitable. The progress you have started with tying up with the EU means, that for an EU-based company like ours, you are a partner country that will eventually be part of the EU market, making trade easy.
In reality, I don’t see any negative things in Ukraine. For me, there is absolutely nothing that makes me not want to stay. And on a personal level, all people I have met in Ukraine are very nice, with positive attitude. The current situation in Ukraine is a tiny part of Ukraine, and does in no way detract from the future that your country has.
What about the corruption, have you had any encounters with that?
If we participate as a company in corruption in Ukraine, I as the manager will be liable according to Danish law. If any of our employees would be involved in corruption, I would go for three years to jail. We would never pay a single hryvnia in black money. Sometimes that means discussions with your officials, and sometimes things take longer than normal, but that’s just a given – we can’t back down on our principles. To make it clear, we translated the Danish corruption law to Russian, and posted it just inside the door to our office. The special thing about the Danish corruption law is that it’s also valid in other countries. So if any Danish company is involved in corruption heads will roll in Denmark. So not only will we reject corruption, but we will always report any person that tries corruption on us, and if the person is not getting a fine, we will continue to press the authorities for a conviction, even if it will mean we will have to have the help of our embassy, foreign minister or even EU to do so. We have not become the least corrupt country in the world, by taking lightly on the fight against corruption.
The bad thing about corruption in Ukraine is that there is a lot of it. But the good thing about fighting corruption in your country is that your government and leaders strongly advocate that they don’t want it anymore and it is a prominent topic in the EU association agreements. To eradicate corruption in your country you need to start from the top-down, and we see that that is happening. It will not change overnight, and it will take many years before Ukraine will get to the level of Denmark, which is the least corrupt country in the world. There are so many people that are used to being corrupt, getting a small state salary and building fortunes from corrupt practices. But the key issue is the goal is clear and ship is sailing in right direction.
What legal difficulties did you experience when opening your company in Ukraine?
In Denmark I can go online create a company in 5 minutes with my digital signature. Here it takes 3-4 months, and that’s the problem. But this will get better. If you are in business, your goals are also set on the long-goal horizon. And if you have a commitment to investing in Ukraine, it’s then it’s just things you have to accept. I must admit that I was frustrated when we started, but things managed to work out.
What would you recommend for future investors? How is Ukraine unique?
When you come to a country and you see something and say “I could improve this,” you see a business opportunity. I see many opportunities like this in Ukraine. In Denmark when you build a new house, you often make one that doesn’t use energy at all. In Ukraine you have not been thinking about energy prices, because it was subsidized, and when the now-subsidized prices for energy reach marked level in three years, this will be difficult for many people, but will also get other people thinking, how they can be spending less energy. Many parts of your country are well-suited for the development of wind and solar energy. And all house are definitely ready for better isolation. It’s a process that has to start, and it will take off.
You have many good employees, a lot of engineers from the heavy industry that are well trained but are not used to compete in the real world. A lot of them will improve, and do very well in the future, and some of them will partner with Western companies.
When I look around I see a huge potential. If I was 20 years old, I would have moved here and lived the last 30 years, it’s so cool. This is probably not the vision you have of your country; but in Denmark there are many things we don’t agree on, it’s not heaven either. But that’s a sign of democracy, in all the countries around the world where people can speak freely and discuss things. When you have this, you can be sure that society is moving in the right direction.
How did Denmark come to be so energy efficient?
It’s a very funny story in the way that we have always allowed people to be different from others without problems. We were the first country to accept homosexual marriage and adoption by homosexuals, because we have a high level of acceptance of people being different. Many years ago some hippies in the 1960s made a school, and made all kind of crazy things, they wanted to educate people and travel around the world. One day they decided that they want to make a wind turbine. So they made a pretty big one in a small village called Tvind, not knowing anything about wind turbines, but they wanted to supply themselves with energy without using society. It’s operating to the present day.
The wind turbine at Tvind
And in many respects that turbine and that hippie vision is what started wind turbine production in Denmark – it became an inspiration not only for hippies, but for more traditional-thinking people, that saw a business opportunity there. It shows that a country where you allow people to be different, will allow people to come up with pretty crazy ideas. One of the things I find in business, is that in successful companies you have people sharing a vision, but coming from different backgrounds. For instance, an engineer that is good at the technical side and shares a vision with an economist that knows how to sell will produce more; it’s a case of 2+2=5. Today, two of the world’s largest wind turbine manufacturers are in Denmark. Our company provide specialist knowledge to big wind turbine manufacturers, and we work with most of the world’s leading turbine companies.
Wind power in Denmark
What would you suggest to people that want to invest in Ukraine?
Well, it depends on what you want to invest in. You can of course say that I’m biased, because I see things from my own view, and other people will see other opportunities. Generally people should just come here, be here for a week; if you’re a business person, you will probably find interesting things to look at. The possibility is huge. I was reading some history of how the Rothschild family became rich. One of the them had a motto: “Buy even when there is blood in the streets.” It’s the same here. Many big companies from EU should see the potential here. When you stand looking at Ukraine, you should be seeing the same potential as in Poland 20 years ago.
There are so many countries in the world that we could have invested in. So us choosing Ukraine and going here is a sign that you have a unique country and good employees.
What should Ukraine do to attract foreign investment?
You should just stop talking about the war – this takes focus away from real potential. Your country is so much more than this ongoing conflict, which basically is happening in 5% of your country. Your country is huge; you have to tell people that your country is so much bigger than Donbas. Your country is so wide, it’s like going from Amsterdam to Warsaw!. If there’s a conflict in Warsaw, it’s not something that affects people in Amsterdam. You have a conflict, something you need to solve; but it doesn’t change that 95% of country is doing well and people are motivated to work hard
Do you have any practical advice to people that want to invest?
You need to find good employees, someone you can trust. And I can say that Ukrainian people are extremely trustworthy. I have no problem in recommending that. At the same time, you have good laws that will protect European companies from being cheated. You need a business plan and you need to know what you want to achieve.
I don’t see any problems in investing in Ukraine; I see challenges, they have to be overcome, but that’s like anywhere in the world. Doing business is like taking a long walk to the top of mountain. Just start walking.
How did the conflict affect your company?
We had to move; our staff is sad about it, as they have to leave friends and families. They feel a hostility towards IDPs coming from the ATO zone, which is sad, because they fled to have a better life. I think that any Ukrainian person’s responsibility is to take good care of fellow people of their country, so I find it very frustrating. The rules about registering IDPs make it very complicated.
But we were lucky that the company was brain-based; with production-based companies it’s more difficult to move. Overall, it looks like in reality the conflict has been more or less stable since the autumn. there’s been fighting, but generally speaking the border between Donbas is and Ukraine has been relative stable. Perhaps optimistic, I assume that by 1st of January Minsk will be followed 100%.
Any suggestions to Ukraine on energy efficiency?
When I was a kid in the 1970s the OPEC countries dramatically raised the price of oil. Denmark had to cut down massively on the use of energy. It was illegal to drive in cars on Sundays. You could play football on the streets. Before that, we had a temperature of 24°C in the winter in our apartments, now we keep it at 21°C. Now you would think that it’s nice and warm to have 24°C, but the difference in cost between 21° and 24° is huge, and it’s strange to me that you haven’t emphasized that. Of course people will think it’s cold in the beginning, but they will get used and finally realize it’s a nice temperature. Start renovating houses, installing windows with many layers of glass, then go to isolation. it’s a process. It sounds cynical, but it will start automatically once people will start paying real energy prices, because it’s natural that people will use less of the supplies that cost more. It will be a tough process, but you need to do this transition. In Denmark we are highly reliant on renewable energy, having days when the country is entirely supplied by wind power. It’s still expensive, but becoming less and less so. When a country becomes self-sufficient on its power supply it receives freedom.
Any wishes to Ukrainian readers?
The potential in Ukraine is very good. Some people from our Ukrainian office have visited the EU with us, and apart from a few differences, they eventually realize that they live in a nice country where people generally are very nice to each other. The important thing is not if you live in Germany, France, or Denmark, but to live with your friends. People should stop leaving, start living here, and change the country to the better. It’s rare to see these days such strong movements, where the public demand a better life, as you have here in Ukraine, and that’s super cool. Without pressure from the people, the country will not move forward.
Your country is standing in the same place as Poland 20 years ago. Poland has done a fantastic transformation, and I think your country can do the same, just a matter of getting it going. Some people will say that you don’t have enough oil and gas; but a society is built on much more than oil and gas. You have a lot of clever people here. It’s a matter of unleashing; when you allowed people to be different, some of them will make some pretty cool businesses! If you have a country where everybody is forced to thinking a certain way, you won’t have these crazy ideas.
Looking at the world’s top companies, they started in the garage. If you have a society that can take a crazy idea that started in the garage, and doesn’t suppress that idea, then people will grow. A good country is like a garden where you nurse the flowers to grow to be beautiful. That really is what good society is about. In our company in Ukraine, once our employees learn about our Denmark attitude; that you are allowed to question this and that, and that they are allowed to disagree with the management, they come up with suggestions for improvement. They view things from another angle than we do, and come up with surprising ideas, and our company only grows because of that. And so will your country also grow.
Interview by Alya Shandra
