Ukrainian perspective. We are discussing plans to expand European business in Ukraine with the director of Forbo Flooring Ukraine LLC Vasyl Negrebetskyi
At the beginning of August, The Financial Times analysts analyzed the reporting of large European companies and reported that direct losses from February 24, 2022 exceeded 100 billion euros. The process of withdrawing business assets from the territory of the aggressor country is still ongoing. At the same time, companies are returning business to Ukraine or even increasing it, despite the continuation of hostilities. In particular, this applies to the construction market. Previously, PRAGMATIKA.MEDIA talked about the motives and intentions of such large European manufacturers as Schüco, Sadolin, Reynaers, etc., to expand their presence on the Ukrainian market. This time we talked with the head of the Ukrainian representative office of the Swiss company Forbo about how European companies work in Ukraine today.
Forbo is the oldest and leading European manufacturer of floor coverings and construction adhesives. In fiscal year 2022, even taking into account losses in the Russian sanctioned market, the company's net proceeds amounted to 1 million Swiss francs. In the development and architectural environment, Forbo stands out as a producer of ecologically clean and natural linoleum. The Swiss returned to the original recipe developed in 293,2 by the inventor Frederic Walton, refined it and now under the trade name Marmoleum produce floor coverings made from natural raw materials: linseed, wood flour and jute. According to the company's report, 1863% of the components are renewable and 70% are recycled.
From the point of view of the consumer, the main qualities of Marmoleum are its hypoallergenicity, antibacterial properties and a high degree of strength and resistance to abrasion. This specificity makes Forbo floor coverings ideal for use during the restoration and new construction of sensitive infrastructure facilities: hospitals, kindergartens and schools. For Ukrainians, who have to restore thousands of such objects, the availability of such materials at arm's length — in warehouses in the western regions — is more than profitable. For the manufacturer - taking into account the perspective - certainly, too. Vasyl Negrebetskyi, director of Forbo Flooring Ukraine LLC and regional sales director for Ukraine, Georgia, Kazakhstan, Kyrgyzstan and Moldova, told PRAGMATIKA.MEDIA about the current situation and expansion plans.
PRAGMATIKA.MEDIA: How exactly did the war affect the work of the Ukrainian representative office? What has changed in logistics, in sales processes, perhaps in customer requests?
Vasyl Negrebetskyi: In the first 3 weeks, we suspended trading activities, the main task was the safety of employees. We immediately opened an additional warehouse in Lviv, moved warehouse materials from Kyiv there, and at the end of March 2022 we resumed operations from Lviv. The head office also came to meet us: despite all the risks and the lack of an opportunity to pay in advance for imported products, we still resumed imports and delivered the first truckload of floor coverings to Ukraine at the beginning of April. Logistics recovered quite quickly, especially regarding delivery from Europe to Lviv.
PM: Tell us a little more about the Forbo team in Ukraine: how many people are in your team? Do you work remotely or is your Kyiv office open to visitors?
V.N.: Today there are 5 people in the team, the office is open, we work full time with clients. Colleagues who can work remotely are partially working from home. One employee is currently serving in the Armed Forces.
PM: Forbo Ukraine is part of a large international company. How did the head office management react to Russia's aggression?
V.N.: Immediately after the full-scale invasion of the Russian Federation, the office in Ukraine and all our partners sent a letter to the management of the Forbo head office, where they outlined a clear position on the inadmissibility of doing business with the aggressor country. Forbo is headquartered in Switzerland and has a strict sanctions policy. Our products were only partially sanctioned. Since the company has a factory in Russia, exiting the market is somewhat difficult, because it actually means giving it to war criminals. Options are being discussed.
Most orders come from medical facilities, while the office segment used to be the leader
PM: How can you characterize the current situation in the construction market of Ukraine?
V.N.: The market is gradually recovering, but the main customers now are customers from the west of Ukraine. Kyiv is finally coming to life. The structure of demand by segment has also changed, now most orders come from medical facilities, while the office segment used to be the leader.
We have recently completed such landmark socially important facilities as the Superhumans prosthetics center in Vynnyky and the Unbroken rehabilitation center in Lviv. The features of these projects were the extraordinary speed of design and implementation and a significant emphasis on accessibility, barrier-free environment.
Regarding the choice of floor covering, special attention was paid to durability — the floors must withstand operation with the load of hospital gurneys and carts, as well as hygiene, environmental friendliness and durability. Undoubtedly, the design was also of great importance, because it is known that the rehabilitation process goes much better in the modern aesthetic environment. As the optimal solution for the floor at these objects, we jointly chose the Sphera Energetic homogeneous vinyl coating made in the Netherlands.
Also, despite the war, the hospitality segment is actively developing in Ukraine. We have supplied floors and are currently delivering orders for several hotel complex projects.
PM: Forbo is a company with great experience and geography. How is the Ukrainian market fundamentally different from the European one? What local features, differences in the behavior of customers, customers could you point out?
V.N.: The main difference is that the role of the architect and respect for his work are, unfortunately, categorically insufficient in our country. When there is no author supervision, quite often the decision regarding the choice of floors is delayed by the contractor until the last moment, when it is already necessary to choose from what is available at the factory or even in warehouses in Ukraine. Because of this, the quality of the project loses, the design concept may change at the last minute. However, I want to emphasize that the quality of the work of our designers and architects is at a very high level, this is noted by my European colleagues. And objectively: there are already enough nominees and winners of international architectural and design competitions among Ukrainians.
Traditionally, Forbo representatives and partners work with architects at the design stage to choose the right solution based on technical requirements and design concepts. The role of high-quality floor covering in commercial and public facilities is difficult to overestimate, because the most functional load in the room falls on the floor.
Traditionally, Forbo representatives and partners cooperate with architects at the design stage
PM: Individual style, design and environmental friendliness of the product are important for sales on the European market. What are the priorities of Ukrainian customers?
V.N.: It depends a lot on the segment. For the field of hospitality, for example, individual style, custom design is very important. We often accept orders for custom printing on our coatings with approval of a custom pattern based on an architect's sketch. Recently, we have increased the technical capabilities of individual printing, expanded our own digital library and lowered the minimum order threshold.
The process is roughly as follows: the designer provides a sketch and pattern parameters (sizes, colors, step of the pattern), the factory makes a test sample and sends it to the designer for approval with the customer. Only after the approval of the physical sample is the production started. Forbo also works with world-renowned architects who create their own serial collections. We offer them in all countries of the world, for example, a collection Flotex by Starck, created together with Philippe Starck.
PM: Hospitals and kindergartens are among the facilities for which you have supplied coatings in recent months. Are there any specific requirements for product quality for this area? Which exactly?
V.N.: Since most restoration facilities are financed by international organizations and foundations, the requirements for coatings have indeed increased. It is gratifying that floor coverings that have been verified for sustainable development, environmental friendliness, and reduction of negative impact on the environment are preferred. Our natural Marmoleum linoleum, for example, has been proven to reduce CO emissions throughout its life cycle2: this is the first such distinction among floor coverings.
PM: Is Forbo planning to strengthen its presence in Ukraine?
V.N.: So. The decision about an additional warehouse in Lviv was initially temporary, but now it has been agreed in the budget that we will have 2 warehouses in Ukraine operating permanently. There are also plans to expand the office and open a showroom in Kyiv by the end of this year.