The Kharkiv plant gained new life after privatization and began production of chargers for electric cars
After privatization, the abandoned Sistema plant began manufacturing charging stations for electric cars. The company sells a high-tech product around the world and pays about 30 million hryvnias in taxes to the budget every year.
Leading manufacturer of chargers and charging stations AutoEnterprise bought in Kharkov at a transparent privatization auction abandoned premises of the plant, which in the past produced TVs.
About 12,000 square meters of the Sistema research and production enterprise, where the Birch and Oscar TVs were produced in Soviet times, were on the verge of collapse. The upper floors of the room were littered with construction debris, the roof was collapsed, and one wall was partially destroyed.
The last time the company produced TVs was in the late 1990s.
At the time of privatization, Sistema had five employees: a mechanic, a plumber, a farm manager and two directors, and all activities were limited to renting out the premises. The company has accumulated tens of millions of hryvnias in debt.
The only rational decision was to put the plant up for auction until the buildings collapsed completely.
AutoEnterprise CEO Dmitry Nikonov was looking for premises for his plant for the production of chargers for electric vehicles.
This is how the idea to take part in the privatization auction of the Kharkiv research and production enterprise Sistema arose. AutoEnterprise bought real estate for UAH 8.5 million.
“What can be the condition of an old Soviet building built in the 1960s? In some parts, the beams on the ceiling failed. Part of the walls was destroyed, ”Dmytro Nikonov recalls.
Now the reconstruction is still ongoing, although the company is fully operational in the restored halls. More than half of the premises have been completely renovated.
The average cost of repairs is $ 408. for sq. Thus, investments in the facility more than 30 times exceeded UAH 8.5 million, which AutoEnterprise paid for 99.99% of the company’s shares – about UAH 255 million.
“We first repaired the problem part. These are all the upper floors where the beams failed. The floor slabs were restored, the emergency part was reconstructed, one of the elevators was replaced, the other was repaired, ”says the director of AutoEnterprise.
In the conditions of privatization, obligations to the state were also prescribed: to repay debts and pay taxes for written-off property.
Launch of production of charging stations for the whole world
On the basis of the plant, the investor has built a state-of-the-art center for the production of chargers and charging stations for electric cars, which are bought around the world.
If before privatization five people worked at the plant, now – about a thousand. The average salary of an employee-assembler – 1 thousand dollars. without taxes. The developer’s salary is from 3 to 5 thousand euros.
“We have 58 developers, about 100 people – the administrative staff, the rest – handymen and compilers. We pay all taxes, so about 40% is a deduction to the budget, ”says the director of AutoEnterprise.
In 2020, the company paid UAH 12 million in income tax, and in total, including employee payroll taxes, about UAH 30 million.
AutoEnterprise is a truly unique company in Ukraine. It occupies 82% of the Ukrainian market of charging stations for electric cars, and is also the operator of the largest network of charging stations for electric cars in Ukraine.
“Our chargers can charge all brands of electric cars produced in the world, including Tesla, Nissan Leaf and other popular brands in Ukraine and around the world,” explains Dmitry Nikonov.
For many leading manufacturers of electric vehicles, AutoEnterprise manufactures charging stations with company logos. For example, the chargers for Porsche say “Developed in Ukraine”.
The company produces about 300 chargers every month. The company’s turnover ranges from 500 thousand euros to 1.5 million euros per month. Before the crisis, it was 2-2.5 million euros, and the record is a turnover of 3 million euros per month.
Dmytro Nikonov notes that after the sale of the plant, the State Property Fund continues to accompany the new owner legally and administratively, helping to recover what was lost.
“The plant did not pay for the land for many years, and the city council annulled the contract. Now, with the help of the SPF and on my own, I am trying to get the land back through the courts. Paid a huge debt.
Water is supplied from the neighboring area, so you have to drill a well.
There is also a problem with electricity. The cable comes to me from underground, the transformers are installed in the factory, but they do not belong to me. This issue has been resolved with the help of SPF, so I am satisfied with everything, ”says the director of AutoEnterprise.
For the state, the plant was a ballast because it was not profitable and required significant funds for repairs. Of course, there are no such funds in the local budget.
Despite the relatively small amount – UAH 8.5 million, which the new owner paid for the plant at auction – the cumulative effect was much greater. The annual amount of taxes is over UAH 30 million, which is almost four times the value of real estate.
In addition, the company employs about a thousand people, many of whom are highly qualified professionals who have not gone abroad, and some have even returned to Ukraine.
The state got rid of the ballast, because sooner or later it would have to dispose of a mountain of construction waste, which would be formed on the site of the plant after several decades of mismanagement.
Hundreds of facilities in Ukraine have received new life due to privatization. Usually investors invest in their renovation many times more than they paid at the auction.
Thus, the impetus for development is received by related industries, and sometimes – and a large part of cities.
Many countries with Soviet heritage sites have already taken this path. Their experience shows that a private owner is a much more effective manager than the state.
“Such success stories are inspiring. They demonstrate how transparent privatization provides a chance for the recovery, development and development of inefficient and unprofitable enterprises.
For each hryvnia during privatization, the new owners invest in the modernization of facilities 4-6 UAH. These are new jobs for community representatives, these are taxes paid to the budgets of various levels, ”said Taras Yeleiko, Deputy Chairman of the SPF.
Transparent procedures restore investor confidence and increase business activity. Thus, since the beginning of 2020, the budget has received more than UAH 5 billion from privatization.
The next step in Ukraine is the “Big Privatization”, which will be as transparent as the small one. It is a question of sale at auctions of objects which cost starts from 250 million UAH. OGHC and the Bolshevik plant are currently being prepared for privatization .
The auction to sell the Bolshevik is scheduled for October 27. The starting price of the object is UAH 1.39 billion. On October 29, a privatization auction for the sale of OGHC will take place. Its starting price, determined by advisers, is UAH 3.7 billion.
(C)INDUSTRIAL PORTAL UKRAINE 2021