It was November 2022 , when I last wrote some words about the situation in Ukraine . Ten months later , the war is still raging in the East . The conflict will soon be two years old , and this war is no longer the world ' s number one topic . Our company continues to work at our facilities in Ukraine and Poland . We have faced many difficult moments during 2023 . The bombing of our city ( Zhytomyr ) is reduced to a level , where we are not often disturbed . There is an air defence system positioned somewhere in the vicinity and most rockets are shot down . At least we don ' t need to face that danger , so we ' the biggest challenge is loss of people from our team '
can focus on the abundant flow of other troubles . Always remembering , if the machines stop , the money will stop , and people ' s income will stop . So , we NEVER STOP ! Primarily , the biggest challenge is loss of people from our team . Approximately 50 % of the team from 2021 are not working in our company any longer . It ' s a complex story and not everyone went into the army - some 30 % ( approx .) of our team were called up to serve . The other 20 % ( approx .) left for other reasons connected to the war . We have replaced those missing 50 % of staff with other staff or processes . You can easily imagine the impact of losing half the company workforce . Replacing them with less experienced people and the impact on the business . Each new person is 70 % as effective as the one who left . I would not criticise anyone for leaving and do not know how I might have handled the situation myself if I were faced with the awful prospect of fighting at the front ( I ' m British , so that is not my situation ). With the death toll on the Ukraine side at an unparalleled high , it ' s not surprising that some of the people are reluctant to pick up weapons . This fact is impossible to miss as I drive through the city , passing a cemetery that is dedicated to Ukrainian military . Between 2014 and 2022 , there were constantly one or two new flags each month . Every fallen soldier has a flag planted at their grave . Between the start of this year and my writing this letter , the rest of the graveyard has |
been filled up ( possibly 1,000 additional graves ). To give an example , that brings home how dreadful war is , one of our staff is married to an officer , whose troop ( Platoon ) consisted of 30 soldiers at the end of 2022 . Today , only five are remaining . That means 25 soldiers are injured or dead . This is visually recognisable when one looks over the fence of any cemetery in Ukraine . The situation was bound to |
change with the Ukrainian offensive . And the offensive was unavoidable if Ukraine is to secure its own land . We should not be under any illusion . If the war spread further than Ukraine , it would be our cemeteries filling up - and that ' s what allied governments are trying to avoid .
Business is the blood of the economy
As a result of the war , there is a grey market growing in Ukraine , resulting in the loss of tax income for the state . The government needs to show its foreign partners that tax income is stable , and that they will be able to support the mounting debts to the other nations and financial institutions that help keep the military support flowing . If the USA give a billion dollars to Ukraine , in terms of military equipment , that ' s not a real gift and should be paid back at some time . As
' the graveyard has been filled up '
long as Ukraine can show its competence , the river of aid keeps flowing . There is a finite list of taxable pathways for a government , any government , to be able to closest revenue - VAT / sales taxes , duties , personal income tax , property taxes , corporate tax , social taxes - these make up most of the governmental
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income . Ultimately , elsewhere , all of these are connected to companies . Without companies , the economy collapses . With the loss of people from companies and organisations , the tax revenue has been dropping . This forces the government to squeeze a little harder . " Get more from less ". In turn , this is driving many companies towards the grey market . Where goods
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are sold for cash and salaries are partially paid with that cash . A double blow to the budget , because VAT ( sales tax ) will not be declared on goods sold for cash . A downward spiral of action and reaction .
' without companies , the economy collapses
Supersprox doesn ' t sell anything inUkraine and our company remains in the list of top taxpayers in the city . Not because we employ the greatest number of staff or pay the highest salaries or make the best profits . Its only because we work transparently . More for our own sanity , than our benevolence towards the state . As the government tries to squeeze more tax out of the remaining companies , it only hurts those who still operate within the tax laws . Those in the grey market are not suffering and moreover , they bring more difficulty to the honest ones . The national bank / government are also obliged to tighten fiscal controls , to avoid currency devaluation or the outflow of US Dollar and euro from the country . We are all aware of the Argentinian economy and its troubles . How easily Ukraine could end up in the same situation if they take the wrong turn . Apart from winning this war , Ukraine also needs to win |
by DJ Maughfling
back economic trust from the population . These days , nine from ten people who come for a job interview refuse our offer because they want to work unofficially .
The Future
Having said all that , we have been able to spread our risk and maintain our output . Moving some of the production from Ukraine to Poland helped us to keep volumes stable when we were losing staff in Ukraine . We have been automating processes wherever we can during this period - that will help us in the future . It is easy to exist when everything is going well , and we feel like business heroes . When it ' s all upside down , the situation demands more experience , determination and plain hard work . I ' m reminded of the years when I started my business career . The first ten years were very tough . Out of money and no prospect of developing the business further . Then in one moment , the markets changed , and the business took off . Back then we were exclusively based in the UK , and although ' Black Wednesday ' in 1992 , when the UK crashed ignominiously out of the European Exchange Rate Mechanism ( ERM ) was a domestic disaster for UK Inc . - we were among the exporters who benefited . Albeit for all the wrong reasons . Suddenly Supersprox sprockets were 30 % cheaper for companies in Europe and USA . I got in my car and drove to Mattighofen , Austria . KTM was a smaller company back then and I walked in to become OEM supplier overnight . What I want to say is that opportunity from adversity is as true today as it was 30 years ago . I am carrying that thought through all these difficult days . Only the person who gives up is guaranteed to fail . All others stand a chance of success . The decades before the war were good for Supersprox , but I believe surviving it will push us towards an even brighter future . But let it finish sooner , rather than later !
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