By Terry Pickard
I first visited Kyiv as a member of a British business delegation together with the then British Prime Minister Mrs. Margaret Thatcher ( the Iron Lady) in 1990 which was just before Ukraine voted for independence from Russia in 1991.
Then in 1992 I resigned from my position as European Divisional Director at JCB and in the same year the Pickard Co. Ltd was established in September and it is therefore celebrating 25 years of continuous operations in Ukraine this month, this year.
Initially the company had offices in St. Petersburg, Moscow and Kyiv and was involved with a range of different activities. For example in St. Petersburg we bought and refurbished a block of apartments on the famous Moika Canal, we owned and opened a shop for the sale of imported baby clothes and Charnos lingerie which we also wholesaled throughout Russia and at one time were even the distributor for Clark shoes in both Russia and Ukraine.
And in Kyiv we bought a ground floor residential apartment on Prorizna St. which we refurbished into offices and which in 1993 were sold to the law firm B.C. Toms who are still there today.
However by 1995 yours truly was getting tired of the continuous traveling from the UK, to St.P, Moscow and Kyiv and back so the Russian operations were sold off and I focused my time in Kyiv instead.
But those were 'fun' years. For about a year you couldn't fly to Kyiv direct due to the independence of Ukraine and the collapse of Aeroflot with no replacement. One had to take the overnight train from Moscow to Kyiv and back which with the right company could and often was fun. But Kyiv was really the 'wild east' back in those early days; there was virtually no law except for the various Mafia gangs which controlled almost everything. I remember that I 'crossed the path' of one particular group on one occasion and a couple of rather bulky pistol carrying gentlemen called at my door one evening and 'requested' that I accompanied them to a meeting with their leader. Fortunately all was resolved amicably.
Initially the only restaurants where the food was edible was in the hotels where the waiters would constantly pester you with tins of caviar and the menus were full of items which they didn't have. I always found it strange to be offered peas for breakfast along with a fried egg, tomatoes and gurkins together with tea with bits of wood floating on the top. However far preferable to the coffee.
However with the right contacts the business opportunities were simply endless. For example one could buy a city centre ground floor apartment for $500 per square meter, spend $500 per square meter to refurbish it and rent it out to western companies desperate to enter the market but needing modern offices to rent for $55 per square meter per month. That's an annual yield in $ of 60% and no currency restrictions in or out and no taxes.
In January 1992 Ukraine introduced it's temporary currency the Koupon which when launched was about 20 to the $ but quickly depleted to 20,000 to the $. I remember that we calculated at one stage that one sheet of toilet paper was worth the equivalent of a 2 coupon note. Going to a restaurant with a group would necessitate 2 large plastic bags stuffed full of Koupons for which to pay the bill and your biggest fear was that you and the restaurant had counted correctly as checking could take ages.
Our main problem back then was convincing investors that a potential yield of 60% p.a. was real and worth the risk but some were willing to try and we developed offices for international clients such as BP, Squire Sanders and Dempsey, Deloitte & Touche, Asta Medica and British American Tobacco. We also opened our real estate agency (in association with Ferguson Hollis the forerunner of DTZ) because there was no agency to lease out our developments.
So other than a few inconveniences such as no direct flights, no shops with anything in them, no restaurants, plastic bags of Koupons that you spent on anything and that nobody wanted and the awful toilets, life was ok. The toilets; they were really dreadful especially in the offices and restaurants; holes in the floor and where paper (if at all) was newspaper which you, after use, placed in metal bin nearby.
Business development was going well; more embassies opening along with accountants and lawyers and cigarette companies, the new Hgryvna was launched around 2 to the $, UIA started twice weekly flights to London and a new restaurant opened called Arizona serving Tex Mex edible food.
And then came the first crash in 1998!
Fortunately this crash was located only in Russia and Ukraine but back then when Russia 'got a cold Ukraine got pneumonia' and we and the country went on a couple of rock and roll years while the new currency the Hgryvna went on one it's first downward slopes: 1.75 to the $ to over 3. So a lot of financial problems for all and for all sectors of the economy at home but also abroad.
Part 2 is here.