Western Firms Eye Trillion-Dollar Rebuild in War‑Torn Ukraine
Despite the ongoing conflict between Ukraine and Russia, Western companies view Ukraine as a battleground not for warfare but for securing profitable contracts. Bloomberg highlights companies already capitalizing on Ukraine's reconstruction.
11:36 AM EDT, March 10, 2024
Among those carving a niche in the war-afflicted landscape is Aksa, a Turkish generator maker. The company has appointed a special representative in Kyiv, tasked with managing current sales and laying the groundwork for post-conflict recovery. And Aksa is not alone in this endeavor.
Western companies eye $1 trillion contracts in Ukraine
Such companies are steadily growing, drawn by what they see as the most significant investment opportunity since World War II.
Despite the war, various governments, entrepreneurs, and investors are keen to partake in Ukraine's rebuilding, an endeavor the European Investment Bank estimates could surpass $1 trillion. This figure, considering inflation, is more than fivefold the Marshall Plan's contribution to Europe's post-war recovery, as per Bloomberg. The optimism of these allies is not without basis; Russia controls less than 20% of Ukraine's territory.
Not limited to the energy sector, Turkish firms are also involved in reconstructing bridges and roads and equipping hospitals, all in anticipation of securing major contracts.
Mustafa Nayem, head of the State Agency for Infrastructure Development and Reconstruction, shared his optimism with Bloomberg.
We have a chance to rebuild Ukraine more effectively than during the USSR era," he asserts.
Profiting amidst conflict
German companies are also making strides in Ukraine. Defense powerhouse Rheinmetall AG revealed plans in February to form a joint venture for manufacturing the widely utilized 155 mm caliber ammunition, indicating that the ongoing conflict can also be profitable. Meanwhile, Fixit, a manufacturer of building materials, has been constructing a new factory in western Ukraine since last year. Bayer AG, a chemical conglomerate, has announced investments in seed production.
Other international players are also making inroads into the Ukrainian market. Austria's Waagner-Biro Bridge Systems, known for its modular steel arch bridges, has commenced production in a facility in western Ukraine. Last Year, its CEO, Richard Kerschbaumer, stated that they "will have ample work for decades."
Companies from Hungary, Denmark, and the United Kingdom have joined the pursuit of contracts, understanding that Ukraine's reconstruction is inevitable, regardless of the immediate future. An early footprint can secure a competitive edge.
"We cannot afford to wait for the conflict to end or for reconstruction conferences to commence," says a representative from one of the companies currently active in Ukraine.
