The Talan company established a monopoly on the supply of footwear for the Armed Forces of Ukraine (AFU), which led to the loss of additional jobs, damage to the budget amounting to 110 million hryvnia annually, delays in deliveries and the appearance of military shoes of suspicious quality.
The Talan company monopolized the supply of shoes to the Armed Forces of Ukraine. Instead of supporting the Ukrainian manufacturer, raw materials for production are purchased from Bangladesh. As a result, there is a loss of additional jobs, a shortfall of UAH 110 million annually in the budget, delays in deliveries and shoes of dubious quality. Who is behind the schemes? Why does the Ministry of Defense turn a blind eye to unfair deliveries?
Since the full-scale invasion of the Russian Federation into the territory of Ukraine began, military support costs have increased significantly. In 2022, the budget for providing the Ukrainian army reached 600 billion hryvnia . And already in 2023, this amount increased to 900 billion rubles . UAH Of all the funds, in 2022-2023, almost 3.5 billion hryvnia for which 1 million 400 thousand pairs . However, the Ministry of Defense has a monopoly on the supply of shoes to the Ukrainian army. In addition, since February 2022, information on procurement for the Armed Forces has become closed. And where there is a monopoly, there are often opaque rules of the game. A striking example is the TALAN group of companies.
How did they monopolize the supply of shoes for the Ukrainian Armed Forces?
Analyzing the shoe market of Ukrainian manufacturers, one can see that today there are enough companies in the state that, competing with each other, are able to fully provide the Armed Forces of Ukraine with high-quality and inexpensive shoes. Despite this, it was beneficial for someone to establish a monopoly of a single supplier represented by the TALAN group of companies.
Petro Poroshenko, by the way, also showed commitment to this company, because even on his Instagram the ex-president wrote : “For five years, the Supreme Commander-in-Chief of the Armed Forces of Ukraine, Petro Poroshenko, from 2014 to 2019, wore ankle boots from the TALAN plant.” Although you understand that you could have taken 5.11 and that’s all. But if a Ukrainian soldier wears “Talanov’s” ankle boots and is happy, then the President should also wear “Talanov’s” ankle boots .”
It seems that the decision to make the monopoly of a single supplier represented by the Talan group of companies was made back in 2014. After the 2014 elections, MP Mykola Lavrik’s skyrocketed, and within six months Talanlegprom LLC became the absolute favorite in all tenders for the purchase of military and special footwear for the Ministry of Defense, Ukrzaliznytsia and the National Police.
That is, after the Revolution of Dignity, it was determined that the only supplier for the 250,000-strong Ukrainian army would be the TALAN group of companies - the property of the family of Nikolai Lavrik, who at that time became a people's deputy of the 8th convocation and was one of the faction's "legislators" Bloc of Petro Poroshenko.
Who is the beneficiary of the TALAN group of companies?
According to YouControl, the composition of the founders of the group of companies is as follows.
By the way, in June 2017, the Odessa regional territorial branch of the AMCU fined Talanlegprom LLC Andrey Lavrik and TD Ukrlegsyrye LLC for tender collusion in 2010-2011 each for 117 thousand UAH. The AMCU has listed these companies as prohibited from participating in tenders .
It is noteworthy that the director and owner of Ukrlegsyrya, Irina Pokas, during the bidding period turned out to be the owner of 42% and the head of the TALAN group of companies.
Together with her, the founders of this company were Talanlegprom LLC and Nikolai Lavrik , the former governor of the Sumy region, whose son Andrey Lavrik was the owner of Talanlegprom.
Lavrik are indicated as the founder and ultimate beneficiaries of LLC TD Ukrlegsyrye . TD "Ukrlegsyrye" and LLC "Liberty" , very similar to a typical offshore company.
Mrs. Pokas herself owns less than 2% of Liberty, another 0.08% of this organization is owned by Lavrik Valentina Andreevna, and the main owner is the company Superprojects Shoes Private Limited, which is located in the Republic of Bangladesh.
Liberty itself does not appear in any government orders, but is a co-owner of another legal entity - Talanprom LLC, which is part of the Talan group of companies of Nikolai Lavrik’s family business for the production of safety footwear.
Despite the fact that almost all of Nikolai Ivanovich’s family firms are registered in the capital of Ukraine, the address of the production facilities is the city of Romny, and it is at the address of shoe production that the Liberty company is registered, the owner of which is the mysterious company Superprojects Shoes Private Limited, which is not subject to the Ukrainian authorities. laws
It is interesting that the Romensky collective production and trade association “Talan”, from which Nikolai Ivanovich’s career began, according to the state register, had 220 founders at the time of registration.
Consequently, we see that the deputy has considerable benefits from the family business, but does not seek to eliminate the conflict of interest.
In addition, in July 2017, the police opened a case regarding the withdrawal of UAH 21.38 million through fictitious companies from OP Evas LLC, one of the main suppliers of Talanlegprom.
And now the government has changed, but the monopoly of TALAN remains the same.
If before February 24, 2022, the strength of the Ukrainian army was within 250 thousand soldiers, then after the full-scale invasion of the Russian occupiers, the number of Ukrainian soldiers increased to 700 thousand, and this does not take into account other power units involved in protecting the territory of our homeland. And with a significant increase in the number of the Ukrainian army, the shoe manufacturer remained unchanged, although the TALAN group of companies has the ability to produce only 50% of the total needs of the Ukrainian army at its production facilities. This is precisely what is causing the delays in the supply of shoes to Ukrainian defenders.
Despite this, for some reason Ministry of Defense officials do not attract other Ukrainian manufacturers. And the same group of companies “TALAN”, in order to reduce financial costs, orders materials for sewing from Bangladesh and then supplies the remaining pairs under its own brand to the military warehouses of the Ukrainian Armed Forces.
By the way, in Bangladesh itself there is a factory that produces raw materials for making shoes, owned by the Lavrik family. It is from this country that the TALAN group of companies exports the upper part of footwear for the production of ankle boots for the Ukrainian military.
It is open information that we also have a shoe factory in Bangladesh. It has been operating since 2008. Its management employs five Ukrainians. From there we get semi-finished products, the blanks are sewn there. Finishing operations are carried out in Ukraine. We provide reporting within the framework of current legislation. We also have a factory in the United Arab Emirates. Someone goes there on vacation, and we make shoes there ,” notes the founder of the group.
Why such a decision was made by a monopoly company producing footwear for the Ministry of Defense and whether there really is no Ukrainian production of similar raw materials remains in question.
Let us remind you that the Talan group of companies includes Talanlegprom LLC and Talanprom LLC, through which shoes are supplied to the Armed Forces of Ukraine.
Accordingly, for 2021 the TALAN group of companies received a total net profit compared to income of UAH 21.8 million. , and already in 2022 UAH 226.239 million .
As we can see, the net profit of the Talan group of companies has increased more than 10 times compared to 2021 and 2022.
How much does Ukraine lose on the supply of shoes and who benefits?
"TALAN" has its production facilities in the Sumy region and in its own production reflects no more than 700 thousand pairs out of a total demand of 1 million 400 thousand. And the best solution would be to attract domestic manufacturers to provide shoes to the Armed Forces of Ukraine. Currently, there are about eight manufacturers in Ukraine that could compete with TALAN and ensure an uninterrupted supply of all footwear needs for our army:
- in the Kyiv region there are 4 production facilities that could produce 500 thousand pairs per year;
- in the Khmelnitsky region, one factory can supply 100 thousand pairs annually;
- in the Lviv region, 200 thousand pairs can sew for the Armed Forces of Ukraine;
- The Zhytomyr region has one manufacturer that supplies the Ministry of Internal Affairs with tactical shoes and could additionally produce 250 thousand pairs of shoes per year for the Armed Forces of Ukraine;
- The Chernihiv region, on the basis of one enterprise, can provide the Ukrainian army with 150 thousand pairs of shoes.
However, to produce 700 thousand pairs, which TALAN cannot produce due to the limited amount of material available, we have to wait for the delivery of materials from Bangladesh. At the same time, during martial law, the state loses additional jobs and taxes. Indeed, if Ukrainian manufacturers produced those 700 thousand pairs, up to one thousand additional jobs could be created. And with an average monthly salary of 15 thousand UAH, the state would receive up to 75 million UAH per year in income tax and military duty.
That is, the state loses 110 million hryvnia a year in lost income taxes from the shoe supply scheme of the TALAN group of companies. And here it becomes clear to the naked eye that the monopoly of the TALAN group of companies was created artificially and, most likely, not without the presence of a corruption component.
The position of officials from the Ministry of Defense, who turn a blind eye to the situation described, remains unclear today. After all, the quality of products is significantly lower than the requirements of the Ukrainian Armed Forces and often deliveries are made untimely. This means that our military must expect shoes of dubious quality.
Maybe TALAN is really the best manufacturer in Ukraine?
Why do officials so persistently prefer TALAN footwear supplies? If the power is too low, then perhaps these shoes are of high quality, which none of the Ukrainian companies can provide. But all is not well here. There are many comments regarding the quality of TM “TALAN” shoes. After receiving such boots, the military is forced to replace them with personally purchased shoes. Indeed, on the new edition there are cracked overlays and soles. In addition, they are not convenient for constant walking.
That is, under martial law, representatives of the Ministry of Defense do not comply, as required by the order, with all procedures for checking the quality of each batch of shoes, because this takes time and significantly delays deliveries for our soldiers that correspond to the season of shoes. And “TALAN” repeatedly misses delivery deadlines.
For example, Sergei Prokhorenko - Co-Founder and Principal Agile Transformation Consultant at Agile.Live , in February-March 2022 - a soldier of the reserve company of the 4th battalion of the 72nd separate mechanized brigade, noted that: “ Comfortable boots in the army are vital important, so it’s really better to buy them for yourself... Again, if you get regular “Talans” on time, this is a good option, but I know people who were given summer models at the end of July, but they still have winter ones.”
Therefore, such expected combat boots arrive at the front at the wrong time and the guys are forced to buy them at their own expense, so as not to fight completely barefoot.
StopCor talked with Andrey Lavrik about the monopolization of the military footwear market in Ukraine. Andrey explained that at a round table at the Ministry of Defense with the participation of Ukrainian manufacturers, defenders set a number of conditions for improving footwear for the military. According to him, technologically for this it was necessary to order special expensive molds, the cost of which is 5-7 thousand dollars per unit. At the same time, they had to be tested and the best were selected among them. That is, some of the molds, based on the research results, would most likely be rejected. What manufacturers who intended to participate in tenders did not want to incur potentially unrecoverable costs. Thus, manufacturers allegedly automatically dropped out of participation in tenders.
It is worth noting that in Ukraine it is a common practice when a certain condition or procurement requirement is prescribed for the “right” manufacturer.
So whether TALAN actually monopolized the market by accident or intentionally remains a question. However, it is worth remembering that in any democratic country there should be healthy competition and equal opportunities for all producers.
