Ukraine’s animal-feed sector faced a grim start to the invasion: a shortage of raw materials as shipments from abroad stalled, workers fleeing or enlisting, and a major customer, Belarus, suddenly shifting from partner to adversary. Against this bleak backdrop, Kormotech, one of Ukraine’s leading animal-feed companies, chose a bold path. The owners reached out to local producers, halted long-term stockpiling, and actively pursued buyers willing to replace Russian products with alternatives from other countries. The strategy paid off. In a country trying to survive after losing millions of workers, Kormotech was recognized as Company of the Year by Forbes after a jump in exports lifted revenues from 110 to 124 million dollars.
“And that was a victory for a nation in survival mode,” notes Pavlo Sheremeta, former Ukraine minister of Economy. He adds that the shift helped stabilize a portion of the economy during a moment of profound disruption.
Paying the Army
To endure a conflict that could stretch on, many Ukrainian firms continue redesigning plans and adopting strategies that protect essential sectors. In the food and construction industries, for example, authorities have allowed some male workers to cross borders and authorized exemptions so up to half of a company’s staff would not be drafted, a measure designed to reduce tax losses. The government emphasizes that these incentives are aimed at maintaining the supply of non-lethal goods, uniforms, and other military-related needs while preserving payrolls for soldiers.
“This rule applies to large taxpayers and strategic companies,” explains Dmytro Boyarchuk, executive director of CASE Ukraine. “It is real, but not likely to last long.” A second factor could shorten its duration: a new legislative proposal seeks to widen mobilization due to troops’ shortages at the front.
According to veteran economist Sergiy Tsivkach, the core challenge is that Ukraine’s economy struggles to fund both military and social spending. Still, the country remains committed to its broader goals, with officials warning that the path ahead will require hard choices and continued resilience.
Ex-minister Sheremeta warns that the economy must balance substantial military outlays with social commitments. “We will keep fighting,” he says, underscoring the country’s resolve despite economic strain.
Military Capability
Evidence of the ongoing effort shows in the shifts in production. Numerous enterprises have redirected toward defense-related goods, from protective gear to uniforms for service members. In some cases, output has surged several hundredfold, notably in the drone sector. Other product lines, such as artillery projectiles, have grown more moderately. Volodymyr Dubrovsky, a senior researcher at the Kyiv School of Economics, explains that the intensity of these changes reflects an economy pivoting toward defense-aided growth while trying not to let such a shift erode overall welfare.
Authorities also harbor the aspiration of turning Ukraine into a significant global arms exporter. Yet Dubrovsky cautions that real expansion hinges on victory in the war. He adds that economically, such a transition could pose macroeconomic imbalances and would likely depend on Ukraine joining the NATO alliance in the future.
Debt and Financing Challenges
In a country where an estimated 10 percent of firms had closed by the conflict’s first months, financing remains a critical bottleneck. Firms have attempted to adapt, but access to affordable credit and investment guarantees remains tight. The International Monetary Fund (IMF) approved a 15.6 billion dollar package for Ukraine in March 2022, and a further 900 million in the following November under a second review. The IMF has also disclosed that total loans to Ukraine approach 114 billion dollars, a figure that underscores the magnitude of the challenge. The size of these numbers is hard to fathom but speaks to the scale of support and the still-fragile economic situation.
Observers also point to foreign investors’ caution about pouring capital into a country at war. While Ukraine has managed to reroute fuel transport through European routes by reconfiguring its rail network, the grain trade continues to face obstacles at border checkpoints and with cross-border friction with neighboring Poland. These frictions and financing gaps complicate efforts to sustain growth and rebuild the economy while the conflict persists.
Despite the hurdles, there is a sense that the country’s economic recalibration—shifting production lines, leveraging strategic sectors, and securing international assistance—belies a stubborn determination to endure. The overall picture remains complex: a mix of accelerated defense production, careful fiscal maneuvers, and a long, uncertain road toward broader stabilization and recovery.