On the first anniversary of the Russian-Ukrainian war, journalist Patricia Cohen traveled to Lviv and Prylbychi to write a story for The New York Times on a positive externality that was caused by the war. This is the Ukrainian pet food company Kormotech, which not only survived the war but thrived.
When the war first started, Kormotech shut down due to several factors. One was that they could not get the imports needed into the country and their exports out. The second was that many of their factory workers went to fight in the war, so they didn't have the workforce needed to maintain operations. There also was one of the biggest issues of all is that Kormotech's biggest export market was Belarus, which is a well-known ally of Putin.
Despite these factors working against the company, Kormotech was able to overcome the odds. Last year, the majority of Ukranie's small family-owned businesses like Kormotech had to shut down permanently due to the war. One of the biggest factors that aided them was that after the pandemic and the issues that arose in having to leave their factories and having no inventory as a backup so this time they were prepared. They had two months of inventory and they were able to sell this to countries such as the U.S. This gave them time to reorganize and prepare another facility to be used for production. They found a company that had never made pet products before and taught them what to do. Over time, they were able to get back to full capacity and were able to give over a thousand jobs to Ukrainian civilians who could not fight in the war as well as provide income and taxes when Ukraine needed them most.
Throughout all of these hardships, Kormotech persevered and despite all of the hardship that Ukraine is experiencing right now, it felt good to find an article that showed how people were able to make it out of the dark that is the war and flourish in the harshest of conditions.
https://www.nytimes.com/2023/02/23/business/economy/ukraine-company-kormotech.html
2 comments:
Super interesting post! It was very smart of Kormotech to shut down along with the Ukrainian economy as the war was able to wipe out so many businesses. It is much easier for a big business to survive hardship due their massive budgets. It was smart of Kormotech to follow markets and cut their budgets as low as possible which allowed them to prevent a worse off financial position. It will be interesting to see how they do this year
Hello Kaylee,
It is always heart-warming to see light come from the darkness. In your example, a dog food company understands what it must due to thriving even in the most horrific conditions. I am hopeful that other businesses are able to find their way out of the dark in order to spark economic activity. Due to covid and the war, the economy of Ukraine has surely taken a turn for the worse. Any increase in production and consumer confidence is beneficial to economic growth.
Overall, I am hopeful that this conflict between Ukraine and Russia ends sharply and soon. It is very saddening news and I am hopeful that everything works out for the best.
Good post, Kaylee.
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