WARSAW/PRAGUE (Reuters) - Following Russia's 2022 invasion, Ukrainian companies that originated or grew in central Europe are now concentrating on local clients rather than mostly refugees, and some are now considering a transfer further west.


Ukrainian-owned enterprises arose in neighboring nations, initially catering to their displaced compatriots with food, drink, and services as the war shut off opportunities both domestically and in the east, including Russia.

Polish business associations and economists estimate that in 2024, Ukrainians opened every tenth new firm in Poland, where the war-affected Ukrainian community has grown to around 1.5 million.

After opening in Poland two years ago, Andrii Halytskyi's Lviv Croissants currently has twelve locations. As part of what its creator claims is a plan to create a geographically varied company by moving westward and beyond the diaspora, it launched its first location in the Czech Republic in October.

"While the Ukrainian refugee community in Europe is significant, relying solely on this customer base is not a sustainable long-term strategy," Halytskyi stated to Reuters.

Poland is a logical location for Ukrainian enterprises due to its strong cultural ties to Ukraine. However, a lot of people are also searching for a much larger customer base outside of the main economy in rising Europe.

According to Dariusz Szymczycha, first vice president of the Polish-Ukrainian Chamber of Commerce, "Companies initially view Poland as a bridge or springboard to European Union markets."

"They want to learn ... the reality, standards, regulations and rules of operating in the European Union."

According to founder Andriy Khudo, the Piana Vyshnia chain of pubs is based on a traditional Ukrainian cherry liqueur, but its primary target market is locals, he told Reuters.

According to Khudo, since February 2022, his!FEST restaurant company has increased westward expansion of the brand, which is known as Drunken Cherry in English, to 15 sites in Poland and nine in other Baltic and eastern European nations.

In 2025, the business intends to reopen a location in London and operate in Germany, Switzerland, and France, he added, adding that the bars are lucrative and drawing in new patrons.

 

"We concentrated on Ukraine before to the conflict because our company was growing there so rapidly. However, the battle forced us to turn our attention westward due to the danger in Ukraine," Khudo stated.

REFUGEE BOOST

Economy Minister Yulia Svyrydenko told Reuters in November that Ukraine's economy was only 78% of its size prior to Russia's full-scale invasion in February 2022, despite the fact that it increased in 2023 and is expected to grow in 2024.

Businesses like Khudo's have been forced to go abroad as there is no end in sight to the conflict. This has had a negative economic impact on neighboring nations, whose labor markets have also been less burdened by the influx of Ukrainian workers.

According to a March 2024 Deloitte assessment, Ukrainian refugees would account for 1.1% of

 

"When they come to Poland, for example, whether to work or set up businesses, this is an additional stimulus from the economic perspective for consumption and improving the supply of labour," Andrzej Kubisiak, deputy director of the Polish Economic Institute, told Reuters. 

 

Another Ukrainian restaurateur, Olga Kopylova, told Reuters she had no plans before the war to take her Chornomorka brand abroad but now has three outlets named Czarnomorka in Poland and two apiece in Bratislava and Vienna.

Coffee chain Aroma Kava moved to Poland in 2022 and has since expanded to 10 locations, while Ukrainian ice cream and frozen products maker Three Bears bought Polish company Nordis.

Poland is now the second most important market for digital entertainment provider MEGOGO which has grown by appealing to local residents, mainly through family

programming, co-founder Volodymyr Borovyk told Reuters. It entered Poland and Romania - emerging Europe's two most populous countries - in 2023.

 

"The healthy Polish market not only motivates us but also encourages other Ukrainian companies to enter this market with products tailored specifically for Polish consumers," he said.

 

At the newly-opened Lviv Croissants branch in Prague, the staff served a mix of tourists, locals and Ukrainians who sipped coffees and nibbled on sandwiches as they took a break from the holiday rush.

 

"This was my first time eating here, but for me it is like a feeling of home," 20-year old Ukrainian student Tatiana Melnyk said