by Jack Laurenson

KYIV -- Sweden’s business ties with Ukraine improved last year, with Swedish exports jumping by 60% and its imports increasing by 20%, reflecting a renewal of trade ties between two countries with long historical links.

Sweden’s new ambassador, Martin Hagström, predicts that trade an investment will continue to grow.

“We would really like to see more investment here,” said the ambassador, who arrived here last fall. Referring to Ukraine’s free trade pact with Europe, he said: “There is no difference if you produce in the EU or Ukraine.”

Although jets make the 2h30 minute flight from Kyiv to Stockholm two times every day, Swedish investment here lags. Estonia, another former Soviet republic, has “20 times” the Swedish foreign investment than Ukraine, he noted.

Sweden’s new Ambassador, Martin Hagström, took question Wednesday evening about Swedish investment and trade with Ukraine, at FrydaysW business networking event at the Hyatt Regency. (FrydaysW)

Hagstrom, a Eastern Europe expert, predicted that Swedish companies with Baltic and Polish experience will be the investment pioneers in Ukraine. In the 17^th and 18^th centuries, Sweden and Ukraine were allies against Russia. In modern times, these ties were cut with the Cold War and the 1,300 kilometer distance between the two capitals.

Last January, the ambassador’s investment promotion effort took a hit when Business Sweden, a public-private trade and investment promotion group, closed its office here. This closing flew in the face of jumping bilateral trade.

“Swedish exports to and imports from Ukraine both rose significantly last year – a more positive dynamic compared to the rest of the EU,” the envoy said.

June 15 Sweden-Ukraine Forum in Kyiv

To refocus Swedish investor interest on Ukraine, the Swedish Embassy, with Swedish corporate support, will hold the Sweden-Ukraine Business Forum at the Hyatt Regency here on June 15. Top government officials and business representatives from both countries will discuss how trade and investment can grow, and, hopefully, make deals.

The ambassador cited two recent Swedish deals: a new sawmill in Rivne and Electrolux expanding its production in Ivano Frankivsk to 200,000 washing machines a year.

Swedish investment here tracks a wider pattern of other European countries. Growth is coming largely from existing companies expanding operations here. The new corporate faces largely are studying opportunities.

Efforts by IKEA, the world’s largest furniture retailer, to open a store in Ukraine go back over a decade. In 2007, Lennart Dahlgren, then CEO of IKEA Russia, got a firm handshake from then Prime Minister Viktor Yanukovych at the end of a meeting in Kyiv. (UNIAN/Andrey Mosienko)

From Cold Sweden: Energy Efficiency Tech

Mr. Hagström cited opportunities for Swedish cooperation in renewable energy and energy efficiency. As a northern country, Sweden has developed cheap ways to deal with cold weather.

Leading technology companies from Sweden – such as the popular music streaming service Spotify – also are studying the Ukrainian marketplace.

Global furniture giant IKEA long has planned setting up shop here or in Odesa. Many Ukrainian shoppers furnish their homes with IKEA products imported from Poland. IKEA has no stores in Ukraine.

While here are no public dates for IKEA or Spotify to come here, the ambassador is hopeful.

“Ultimately it’s consumer demand that will drive this, and there is huge demand for these products and services here,” he concluded.

Reforms Make Ukraine More Attractive to Investors

Mr. Hagström praised Ukraine for moving forward with reforms that make the country a more stable place to do business.

“Sweden has been an active partner with Ukraine on implementing reforms since 1996, and it has been a productive but, at times, frustrating process,” he said.

Reforms to the country’s economy and the financial sector and better integration with Europe were positive signs for foreign companies wanting to invest in Ukraine, but challenges still remain however.

“Many more companies still want to invest here, but some businesses speak of challenges posed by the judiciary and corruption,” he said, stressing that Sweden will help implement further reforms.

UBJ Editor in Chief James Brooke contributed reporting to this story

For comments or story tips, please email UBJ Kyiv Correspondent Jack Laurenson at: laurenson.jack@googlemail.com Slider

Photo: Sweden’s new Ambassador, Martin Hagström, spoke Wednesday evening about promoting Swedish investment and trade with Ukraine, at the FrydaysW business networking event. (FrydaysW)

Posted April 28, 2017