For almost 6 months, our country has been suffering from attack and aggression from Russia. But we do not give up – we continue to fight for freedom, live and work, overcoming all obstacles!
Our company Ukrfavorit has been located in Melitopol for the last 8 years.
When it became clear that the city would be occupied in the near future, the management had to make a decision: to completely stop operations or evacuate the enterprise to a safe area and start all over again.
We chose the second option, because the work of many foundries depended on us.
In addition to Ukrfavorit, many other enterprises faced operational difficulties due to the war.
The marketing department of our company conducted a survey of customers about the current state of affairs and the difficulties of production in modern conditions.
We have identified 7 main problems of foundry enterprises during martial law:
- Decrease in demand for finished products – 24%.
Most companies, even those located in safe areas of Ukraine, have faced volume reductions or complete cancellation of orders. As a result, companies are forced to reduce the production of some types of finished products, introduce reduced shifts, or even completely stop work.
- Fighting near production – 21%.
Due to the threat to the lives of employees and the high probability of destruction of production facilities by the enemy, enterprises are forced to stop their work or operate only during quieter times with minimal changes to production.
- Increase in raw material prices – 19%.
Absolutely all sectors of Ukraine’s activity have faced a sharp increase in the currency exchange rate and rising prices for raw materials, delivery, and other services.
Manufacturers are divided into three types:
the first ones switch to cheaper raw materials (Chinese) and change the composition of finished products, forgetting about quality and increasing production defects;
The second – use high-quality, more expensive materials (European), reducing the mark-up on the finished product, thereby receiving lower profits. For such manufacturers, reputation with the client and the quality of the products supplied are very important.
third – use high-quality materials, leaving a high mark-up, thereby placing all costs on the end consumer. Such enterprises are at risk of losing customers, because in the wake of price increases, one should expect a significant reduction in demand for products.
- The occupied territory is 16%.
Zaporizhia, Donetsk, Luhansk and Kherson regions have always been considered industrial regions, with a large number of factories and manufacturing enterprises. Products manufactured in these territories were in high demand not only in Ukraine but also in many other countries of the world.
Currently, these regions are fully or partially occupied by the Russian invaders. Due to the ban on the import and export of raw materials and finished products through enemy checkpoints, most enterprises were forced to completely stop their activities, some continue to work on old leftover raw materials for domestic demand, and some began to cooperate with the occupiers and continue their activities.
Unfortunately, it is not possible to establish cooperation with enterprises in these territories.
- Management and employees left for other cities or abroad – 9%.
During the survey, it turned out that the management of some enterprises had gone abroad, leaving behind managers and technical specialists who lacked the experience and ability to continue their management activities. And from particularly hot spots, the entire staff was evacuated, which forced the enterprise to be closed until better times.
- Logistics – 7%.
Some of our clients have encountered logistical difficulties that have led to production reductions or temporary shutdowns. Here are the main logistics issues:
- Some logistics companies refused to work in areas close to hostilities or in Ukraine in general;
- Due to the reduction of logistics companies and the emigration of Ukrainians, there are queues for vehicles for transportation within Ukraine and abroad;
- Due to the closed sky and sea in Ukraine, delivery from remote countries takes much longer than before
- Organizing work from scratch, due to moving to safer cities – 5%.
Due to occupation and hostilities, some of our clients were forced to evacuate to safer territories. But not all of them managed to save their production facilities, warehouses and staff. Someone suffered huge losses and had to start all over again. Such decisions are very risky, but have a better chance of a successful future than remaining under enemy occupation or in “hot spots”.
In these difficult times, Ukrfavorit works individually with each client.
We strive to find solutions to current problems with minimal risks to your foundry production! Contact:
We know for sure that all of the above are temporary difficulties. The time will come when we will free ourselves from the occupiers, establish production processes, and raise the standard of living in Ukraine to an even higher level than it was in pre-war times!
Press service of Ukrfavorit LLC
