Marko Tkachuk: Our goal is to keep IDS Ukraine in top business shape.

On the transfer of "Morshynska" to the management company a few months before the case is reviewed by the VAKS, regarding the confiscation of the company's assets in favor of the state, as well as the brand's development prospects — CEO of IDS Ukraine Marko Tkachuk in an interview with RBC-Ukraine.

According to him, a crucial stage in the company’s history is currently unfolding. The state, following the VAKS decision, may acquire a highly efficient business asset of significant investment value with balances of 1.2 billion UAH in accounts and tax revenues of around one billion.

Alternatively, Ukraine may end up with the destroyed and depleted remnants of a market flagship if the manager intervenes in the process. The company is currently calling on the state, specifically its institutions AMCU and the Ministry of Justice, to stop the "stretching" of the company in the interests of the manager, who is a key competitor of IDS Ukraine and has opposing state interests — the destruction of the largest competitor and the redistribution of its market share of about 40% in his favor.

— What happens to the company after the Ministry of Justice's lawsuit in VAKS?

The situation regarding the management of IDS Ukraine has not changed. Our primary task is to ensure the uninterrupted operation of the company. Issues of nationalization and the lawsuit in VAKS fall within the competence of the shareholders and do not affect our operational activities. As has been the case for the past 28 months since the arrest of the corporate rights of the group’s companies, the local management team is focused on maintaining the workforce of three thousand people, the stable operation of production facilities in Morshyn and Mirhorod, and the availability of the most famous water brands of Ukraine on store shelves.

Effective operational management allows the company to remain the largest taxpayer in its industry - according to our estimates, various levels of budgets will receive about one billion UAH in taxes from the IDS Ukraine group companies due to the return to pre-war revenue volumes. As we can see, all the challenges surrounding the company have not hindered our team from maintaining stability and even achieving growth. The local management team is focused on doing everything possible to ensure business continuity, stable operations, and development. Similarly, the Ministry of Justice's lawsuit against VAKS has not affected the company's operational performance and activities. We aim to keep the market flagship IDS Ukraine in the best business shape until a decision is made by VAKS.

– How has the situation in the company changed since the seizure of corporate rights?

Apart from the challenges of war and economic factors faced by all Ukrainian businesses, our company has encountered additional challenges. These include a lack of access to external credit or investment financing due to the seizure of corporate rights, ongoing resistance to competitor encroachments on business preservation, and overcoming a toxic information background due to speculation regarding the presence of Russian citizens among the company’s shareholders. Despite all these factors, the company’s management has not only ensured the preservation of operational activities but has also secured capital investments amounting to hundreds of millions of UAH and sustainable development for the company.

The growth of net asset value from 2 billion UAH to 3 billion UAH is the best testimony to the business efficiency of the company, even in the face of restrictions from arrests and a lack of access to external financing. The management has increased the company’s market share and restored sales volumes to pre-war levels, despite the significant outflow of the population from the country.

Despite everything, the company has ventured into two new product segments, launching a line of juice-containing drinks "Limonady" and energy drinks "Volya". The production facilities in Mirhorod and Morshyn have been provided with alternative energy sources — thus, we are investing available funds into the sustainability of production, which is critical for the stable operation of the company, as well as being key donors to budgets and major employers in the communities where we operate.

As you can see, we have a strong motivation to maintain the leadership positions of the company and its brands, especially knowing that IDS Ukraine is also a producer of a strategic product. Our water supports warriors, we provide it to rescuers, and we send it to southern Ukraine, which, in the summer heat and due to infrastructure destruction, has suffered from thirst. However, we doubt that a potential manager will have the same motivation to preserve IDS Ukraine’s business.

— How is the issue of concentration being considered by the AMCU?

We have already stated our position on this concentration, and it has received support from market participants. The concentration in favor of our direct competitor is the worst scenario. The AMCU itself indicated that "during the consideration of the case, it was established that the declared concentrations could lead to monopolization or significant restriction of competition in the market for the primary sale of packaged water."

We still hope that the preservation of competition will prevail in the motivations of the AMCU when making a decision regarding this concentration. Moreover, considering the examination by VAKS of the case concerning the confiscation of corporate rights of all seven companies in the IDS Ukraine group for the benefit of the state, it seems quite illogical to "detach" two of its key components from the company for transfer to a temporary manager.

After all, the AMCU case on concentration concerns only two companies in the group — CJSC "Industrial and Distribution Systems" and CJSC "Morshyn Mineral Water Plant "Oscar" (TM "Morshynska"). It is on the accounts of these two companies, which the manager is so eager to control, that the majority of the 1.2 billion UAH in liquid assets of IDS Ukraine is concentrated. 2 billion UAH in accounts as a result of the actions of the temporary manager? I cannot provide a confident affirmative answer.

— Why does the company insist on halting the actions of ARMA and AMCU until the VAKS decision?

The transfer of two key enterprises of the group to the manager is essentially the dismemberment of the IDS Ukraine business and an artificial separation from it of the company’s largest production facility in Morshyn. And CJSC "Industrial and Distribution Systems" is the main managing company of the group. Such an action would destroy the entire structure and almost instantly trigger irreversible destructive processes in the other companies of the group, which would find themselves outside its perimeter — without financial, service, raw material, logistical distribution, and other support.

The plant in Mirhorod (TM "Mirhorodska") cannot operate outside the group. The AMCU's decision to approve the concentration is a decision by the AMCU to stop and degrade it, as well as the other four enterprises of the group that will find themselves outside its perimeter due to the manager's intervention. It seems entirely illogical to initiate processes that put a future state company at risk of shutting down operations, losing jobs, and reducing tax revenues to budgets of all levels just a few months before the VAKS decision on the confiscation of the company for the benefit of the state.

The state, represented by the Ministry of Justice, is trying to obtain 100% of all the company's assets by VAKS decision — the involvement of a manager makes no sense. Moreover, the manager, as an unnecessary intermediary in this process, may prolong the transfer of assets to the state or even attempt to obstruct this process, causing harm to the business and brands of IDS Ukraine in the interests of his business. It is clear that it is much more beneficial for the state to obtain an intact company that retains its high value rather than a "dismantled" business that has practically lost its value and worth.

— Describe in more detail the value of IDS Ukraine for the state?

First and foremost — IDS Ukraine is the largest taxpayer in its industry and one of the largest among economic entities in the FMCG market. The company can generate more than a billion in taxes for the state. Our plants in Mirhorod and Morshyn are key employers in the communities and critically important donors to local budgets.

In our company alone, there are 3,000 employees, plus jobs and employment with our business partners. Furthermore, IDS Ukraine, as a company built to the highest international standards, remains an attractive investment target for international FMCG giants.

Over time, international giants such as Nestle, Danone, PepsiCo, and Coca-Cola have shown interest in becoming shareholders. By acquiring IDS Ukraine through the VAKS decision, the state obtains a true investment gem. However, if the company is dismantled and transferred to a manager through a court decision, all of its value for Ukraine will turn to ash. The state will receive ruins.

— Recently, the company publicly disclosed its account balances of 1.2 billion UAH for the first time. Why was this done?

I want to highlight the unprecedented openness of our company, including regarding financial and business indicators. The law does not impose any requirements on us for disclosing reporting, financial, or business indicators — during the martial law period, joint-stock companies are exempt from the obligation to publish their financial statements.