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Ukraine: Transportation Firm Goes From Strength To Strength

Vinnytsia, Ukraine; 4 December 1997 (RFE/RL) --Aleksandr Ivanov does not possess a diploma from Harvard Business School, and has never attended a human resources seminar, but his transportation firm, ATP-1, has thrived for years in one of Ukraine's poorer regions.

In six years, Ivanov has seen his company grow from a single bus and driver to more than 100 employees and dozens of buses, most serving international routes.

One secret of success: Ivanov said he believes he has a fool-proof method of ensuring the loyalty of employees and guaranteeing a high standard of service.

"If I am hiring a new bus driver, I sit him down and drink 200 grams of vodka with him," explained Ivanov in his newly constructed office kitchen. "If the kid talks about his old boss - he doesn't get the job." Perhaps, not the textbook method of meeting personnel challenges - but Ivanov's style, nonetheless.

Although he declined to provide information to RFE/RL on the scale of his company's income, he said that at any given time he has 40-50 buses on the road hauling everything from suitcase traders from Sumy, to tourists from Stuttgart, to a military delegation to Istanbul.

Hiring a bus to run from somewhere in Ukraine to somewhere in Europe typically costs between $2,000-to-$5,000, depending on the size of the bus and where it's going. "A bus can make about three trips in a month," said ATP-1 chief accountant Tatiana Matvienko. "You do the maths."

In the beginning, the company was just an idea. As the Soviet Union fell apart, Ivanov applied a little capital and a lot of chutzpah to create one of Ukraine's first cooperative enterprises. The business plan was straightforward. "People needed a cheap way to get to Europe," he recalled. "So in 1990, I bought a bus for 800 rubles. Back then, of course, 800 rubles was a lot of money, but still it wasn't that much." Payroll was initially kept to a minimum. "What employees?" asked Ivanov. "In the beginning, I drove the bus."

That particular capital investment (the bus) ran five years before retiring to a place of honor in a corner of the company bus yard. "I clocked thousands of kilometers aboard that (Hungarian-made) Ikarus," he recalled. "No way we could sell her for scrap, so now we keep her as sort of a monument."

ATP-1 has come a long way since the days when it consisted of a single bus with the burly Ivanov, who claims: "30 years of professional driving, no accidents," behind the wheel. In the beginning, the business capitalized on Ukraine's burgeoning suitcase-merchant sector, ferrying traders to Germany, Greece, Turkey and other countries to pick up consumer goods - toted back as personal baggage - but, which eventually surfaced in wholesale and retail markets throughout Ukraine.

While keeping up the cash flow, carrying traders across borders also enabled the firm to gain critical experience in an undeveloped market. "Getting a bus from one place in Eastern Europe to another is not easy," said Ivanov. "There are borders, passengers, fuel supplies, and maintenance problems to worry about. But once you figure out how to go to a certain place, other customers come looking for you, because you are the man who is already going there."

One of ATP-1's most experienced drivers is Anatoly Koval, who has been at the wheel almost from the company's beginning. His recipe for success fits neatly into Ivanov's direct approach to the transportation business. "Give the driver a good machine, pay him a fair wage, and let him do his job," said Koval.

Today, the company operates out of a headquarters facility 1.7 hectares in size.

Asked by RFE/RL about competition, Koval says, "We've been at this business for six years, and we have developed a reputation as an experienced company. It would not be easy for a competitor to overcome these advantages and take business away from us."

At the same time, Ivanov believes his market share is not likely to expand significantly in the near future. His answer is diversification into freight hauling. "There's a lot of money in shipping containers from Black Sea ports to Russian destinations like Moscow and St Petersburg," he said. "So we've bought our first freight tractors."

The management style at ATP-1 is unlikely to change. Ivanov's reaction to the cups of sweetened coffee served to a foreign delegation attending a recent conference in Vinnytsia: "I don't really like that Western drink," declared Ivanov. "We need something stronger."