Charles Beigbeder: “Ukraine’s agricultural potential is the largest in Europe.”
Charles Beigbeder, French businessman and owner of the AgroGeneration holding that operates in Ukraine, tells The Ukrainian Week why investors are still interested in doing business in Ukraine
What associations does the name Beigbeder have for the average Ukrainian mind? Of course, books and films: 99 francs, L’amour dure trois ans – but that is Frédéric Beigbeder, the writer, film director, literary critic, and advertiser. Another, with the same surname, is the writer’s brother who is also a very versatile person. Charles Beigbeder founded Self Trade, a financial services company, and became one of the pioneers of European internet banking. Later, he advantageously sold the site to DAB, a German bank. Afterwards, Beigbeder founded and led an energy and telecommunications company named POWEO, which still remains France’s biggest private agent on the gas and electricity markets. This, he also sold for a profit; however, he retained his presidency over the Board of Directors.
Today, Charles Beigbeder owns Gravitation, an industrial and financial holding, whose sphere of interests includes, in particular, green technology (Green Alliance Company). He controls, via the Gravitation Group, the agricultural holding AgroGeneration, which owns 51,000 hectares of farming land in Ukraine (in Zhytomyr, Sumy, Ternopil, and Lviv regions). Also, he was an honourable guest at the business forum ‘Rencontres Ukraine’ (Meeting Ukraine), which was recently held in Paris.
UW: You still continue your business in Ukraine, despite the much-spoken about crisis. Why?
“The answer is very simple: your country’s agricultural potential is the largest in Europe. Ukraine is close to the EU and therefore our cultures have quite a lot in common. Also, you have plenty of well-trained experts. So, when we were starting out in 2006-07, the choice was obvious: we must go to Ukraine. There then followed a complicated stage of finding partners, investing, and so on.”
UW: What was your first impression of Ukraine?
“You won’t like it, I’m afraid. I was staying at a hotel which was not really very comfortable, and got food poisoning (Laughs). But all in all, I had the impression of a huge country on the verge of a complete overhaul. By the way, since then (and that was in 2007) a lot has changed. Luxury hotels and good restaurants have appeared. Kyiv is a beautiful city and is comfortable to live in.”
UW: Does your company have any problems with Ukrainians – say, on psychological or world-view levels?
“We have hardly fired anyone. Those who began with us, hired five years ago, are still working with the company. They are mostly young people, very motivated, friendly, and dynamic. A graphic example, if you like: at the very beginning our farm managers were afraid to break bad news…”
UW: Indeed, typical for Ukraine -
“… while we tried to explain to them that it’s okay, you should share everything, you should be transparent. It is better for us to be the first to learn bad news, before our shareholders get it!” (Laughs)
UW: How have the political developments in Ukraine affected your business? You began under one team in power, and continue under another.
“The situation is now less stable, indeed. We are less confident about the future. In 2010 Russia suffered from numerous disastrous wildfires. This calamity brushed Ukraine too, and the government ordered export targets; it came as a bad surprise. Luckily, we were able to store most of our produce. Then, rent for land jumped twofold, without any warning. Now, land legislation is being debated, and it is very unsettling. We, investors, would like our voice to be heard.”
UW: Do you see any other sectors in Ukraine’s economy being attractive for investors?
“In my view, it is worthwhile investing in renewable energy. I might be interested, for one. But at present I am not prepared to take such a step. You need long-term contracts, pre-payments for the produced electricity – but I doubt that the government will be able to keep its promises, at least for the first three years. And even if I do have trust in Ukraine’s government, you cannot say the same of banks. They will merely refuse me the loan.”