ONUR Group is a Turkish construction company that has been operating in Ukraine since 2004. Having undertaken a series of successful infrastructure projects, it has built a reputation in Ukraine for quality and professionalism. Optimistic about the future of the emerging country, ONUR has also expanded and diversified into the country’s agricultural sector, as well as concrete production and real estate. Here, the company’s head of delegation and general coordinator Emre Karaahmetoglu, explains the vast opportunities he sees in Ukraine and how ONUR has positioned itself as a key partner in the nation’s development
How did ONUR Group end up becoming such an important presence in Ukraine?
ONUR Group was established in 1981 in Ankara and became specialized in highway and infrastructure construction, including airports, during the period between the end of the 1980s and early 1990s in when Turkey grew its infrastructure intensively. This meant the company grew at a similar rate, and we then became international after 2000. Our first project outside Turkey was building a road in Croatia between 2002 and 2004. That same year, 2004, we entered the Ukrainian market, with a section of the M05 Kiev-Odessa highway. It was a particularly difficult section – I think it was a kind of trial for us as an international company, and we successfully completed it on time and demonstrated great professionalism. We then participated in international contracts in the Lviv region, which were financed by the European Bank for Reconstruction and Development (EBRD) from 2005. Subsequently, we worked on the Kiev-Chop highway project and won tenders in that region, as well as other road projects financed by the EBRD and the World Bank.
How much has the business climate changed in Ukraine in that 14-year period, and how has this changed the company?
When we arrived here, this was a completely new market for us, with a new system, culture and different people. In the beginning, we just had to concentrate on the job in hand to show our quality and establish ourselves. In fact, we had difficulty finding qualified staff in Ukraine back then, and around 70 percent of our initial employees were brought from Turkey. But from 2004 to 2018 many things have changed, and we have become a kind of local company. Now 95 percent of the more than 3,500 employees in our Ukraine operations are Ukrainian.
What makes Ukraine a competitive destination?
Ukraine represents a very important corridor between the EU and Asia, which is part of the reason why Ukraine is developing so much infrastructure. This development will lead to economic growth. As an infrastructure hub, Ukraine is important for the Asian economy and globally, so its roads, airports and seaports have to be developed to the highest level. It bears some similarity to Turkey’s strategic location. The infrastructure boom there attracted a lot of investors to the country, notably boosting the tourism sector to a situation where nearly 40 million people visit each year. The Turkish and Ukrainian governments have close contact and there is an FTA on the way that will provide many opportunities to both countries. Infrastructure development opens opportunities for other sectors and this is reflected in economic growth.
What competitive advantages does ONUR Group have in the Ukrainian market?
ONUR has huge experience in the construction sector and a great capacity in terms of equipment. We are the biggest owner of equipment in this market, with 4,000 units, which gives us a great advantage in terms of being able to start projects on an immediate basis. We have very highly qualified people who are specialized in infrastructure and who are used to working on international contracts, so that is another big advantage. Compared to 2004, there are currently many more Ukrainian companies and international firms in the market taking part in international and local tenders in Ukraine. For us, competition means more quality, and that is how we reached the level we are at. We have a good reputation in Ukraine and we have to retain it.
How open is the group to international investors financing your work in Ukraine, including finance from German interests?
We are very interested in working with international finance companies. Right now we are discussing PPP projects that are currently going through Ukraine’s parliament. We are a leading infrastructure company, so if these PPP projects come to fruition, we want to be involved in them from the very start and work alongside international investors throughout the process. In particular, there is one project in the Lviv region, the Lviv-Krakovets highway, that we are very interested in. We are based in the Lviv region, so it is like our capital city. But there are also going to be opportunities to build airports, seaports and other projects under the PPP initiative. We are looking for international investment companies to collaborate with. We have so much experience as international contractors in the Ukraine market, so we can develop an interesting model of cooperation with them.
Now the group is so established in Ukraine, in what ways is ONUR diversifying its presence in the country’s economy?
Two years ago we started investing in the agriculture sector. We have 5,000 hectares of land and want to double that to 10,000, mostly focusing on grains. Ukraine is famous for its fertile soil and it is a very interesting sector that attracts international investment. If we make a success of the grain business, then we will definitely be interested in expanding into other production areas in the future. We also have a company based in the Lviv region producing ready-mix concrete and precast elements, which has more than 300 employees and is the leading company providing construction material in western Ukraine. In terms of concrete production volume, it is the second-largest in the country. And we have good plots of land around the country in place where we think that outlets, shopping centers, IT centers, congress halls and other facilities could be built, so we will be looking to partner with developers on that. Finally, Lviv is a famous city in terms of coffee shops, and we actually own one; it’s a place where we like to hang out in our home city.
What plans does ONUR have to diversify into other regional markets, perhaps inside the European Union?
We are looking for opportunities to move into other countries, starting with Poland, which is a very attractive market and which has interested other Turkish companies. Turkish contractors are famous globally and are the second most important national collective in the world. There are huge plans for infrastructure in Poland. We are at the planning stage, and, all being well, we will start up there next year.
You have consistently been ranked among the world’s top contractors by the Engineering News-Record, which is the bible of the construction industry. How do you manage to stand out from your Turkish competitors?
I think our hallmarks are quality and flexibility. We make detailed analyses of markets, but we are brave and flexible enough to take risks.
Do you welcome the more open and transparent way of doing business in what is being called ‘the new Ukraine’?
Absolutely. For example, the ProZorro procurement system is a really good thing. Since 2014, we have seen many reforms and these have affected the infrastructure sector, all leading to greater transparency and openness. This helps the economy to be more competitive, so it helps the country as a whole. The business climate has been improving in Ukraine every year, and this only encourages us to do more things in this country.
What advice would you give to another international company looking at Ukraine and considering whether to enter the market?
Of course, we have a better feel for the opportunities here because we are already so localized. But I would say that any company should think that investment will be necessary to enter the market. They shouldn’t be too careful about preparing everything related to a particular project first and then come here. No, you have to take a risk and get your foot in the door. Everything is moving very fast in today’s Ukraine. The government is interested in growing the economy and attracting investment, and many companies are looking. If you wait for everything to settle down, it could be too late.