Before the Russian attacks on Ukraine, Vadym Novynskyi was looking to make big changes in his company, Smart-Holding. Smart-Holding is the umbrella corporation for his metalwork, gas, oil, agriculture, and other industries. In 2011, Smart-Holding’s revenues were $14.2 billion.
The savvy Novynskyi promoted his first deputy CEO, Julia Kiryanova, to CEO of Smart-Holding. Little did she know at the time the challenges she’d face. “Throughout our portfolio [of Smart-Holding’s businesses], we see more than 50% down in production,” Kiryanova told an audience at the Spirit of Resilience: Ukrainian Voices panel at the World Economic Forum in May. “However, there is good news — we are alive. By saying that, I do not mean only that we are struggling every day and keep going with all our employees. I am saying that we are looking in the future. When you stop thinking about the future, you are dead. And the enemy wants us dead. So, we are alive!”
Kiryanova has found herself in a very different climate than she was expecting. After preparing to dive into a rapidly growing and prosperous market, she found herself at the center of a fight for survival.
Smart-Holding is one of the largest investment groups in Ukraine, focusing on the country’s most vital sectors, like metals and mining, oil and gas, agriculture, shipbuilding and real estate. Smart-Holding’s largest investment is its share of the country’s leading iron ore producer and steelmaker, Metinvest.
In the first half of 2021, Smart-Holding saw significant increases in sales and was managing excess profits from the steep rise in ore and metal prices. Metinvest, which comprises more than three-quarters of Novynskyi’s revenue, was making record sales. However, the situation changed gravely by the start of 2022. Kiryanova says, “We, like Alice in Wonderland, we have to run quicker to stay where we are. And we are not staying where we are, and you can see it by the numbers in the Ukrainian economy … The war impact is unprecedented. Looking back at 2014, we did not experience that much of a pressure on all industries in the country.”
Many assets in the occupied territories have been destroyed. Two-thirds of Metinvest’s assets were destroyed in Mariupol. Its plants in Mariupol accounted for more than a third of Ukraine’s metallurgical production, but the properties came under attack and have been shut down or mothballed. As a result, the country has lost 30% to 40% of its metallurgical production capacity. On June 27, 2022, a Russian rocket destroyed one of the largest shopping centers in Kremenchuk, killing at least 16 people. That center is owned by Amstor Property Management, which is 70% owned by Smart-Holding.
But Kiryanova says they’re grateful that their team is relatively safe and Vadym Novynskyi’s holding company has the means to expand. In her first public interview, published by Forbes and posted on the company press site, Kiryanova discussed some of her and Vadym Novynskyi’s plans for rebuilding in the face of massive destruction.
The first step to rebuilding is expressing a strong company identity. “We want to become more transparent, demonstrate our projects and contribution to the economy,” Kiryanova says. Smart-Holding is a proud investor in Ukraine’s recovery and its future. As part of the improved transparency Kiryanova has promised, Smart-Holding has been pouring hundreds of thousands of dollars into recovery and humanitarian relief. This includes cities that are partly and fully occupied. Smart-Holding has funded the distribution of food, medicines, and equipment, and the purchase of protective gear and even ambulances. Since the occupation began, the Vadym Novynskyi Charitable Foundation and Smart-Holding businesses have allocated over UAH 138 million (approximately $3.7 billion) to Ukraine’s recovery.
Although Novynskyi was born in Russia, Kiryanova sets the record straight about Vadym Novynskyi’s loyalty. Novynskyi has been a patriotic Ukrainian citizen since 2012, and his relations with Russian business partners ceased in 2014-2015 during the invasion of the Donbas region.
One major change since the war has been with Smart-Holding’s retail real estate concerns. After the occupation of Donbas in 2014, 11 shopping centers remained on land not controlled by Ukrainian officials. Kiryanova said in Forbes, “We do not know their fate. Fifteen malls were on the controlled territory. Since 2014, four shopping centers have been sold to partners.
“After Feb. 24, two shopping centers in Mariupol and one in Severodonetsk were destroyed. Berdyansk and Melitopol malls are under occupation — they were ’nationalized.’ We stopped malls in Kramatorsk after approaching the battle line. Currently, shopping centers are open only in Zaporizhzhia.”
Kiryanova agrees that Vadym Novynskyi and Smart-Holding will pursue reparations for the substantial losses resulting from Russia’s invasion. Smart-Holding and its associates keep records of the status of all properties — whether they’ve been destroyed, occupied, or mothballed. “We are talking about hundreds of millions of dollars,” she says, but adds, “There is currently no effective mechanism for obtaining compensations.” It’s still to be determined if working through the European Court for Human Rights will be the most effective channel. For now, Kiryanova’s team works to prepare for that day. As for getting their just reparations, she says, “90% of success depends on preparatory work.”
Right now, Novynskyi “streamlines all his resources to charity,” Kiryanova says. “The amount of aid provided, taking into account our ownership share in Metinvest, has already exceeded $20 million. “As for business, there is a corporate management system in place.”
