Dear participants!
We sincerely thank you for your active participation in our 2nd Annual Forum “AGRIBUSINESS in UKRAINE”! Your presentations, questions and opinions made it a success! As Gilles Mettatal, Director of Agribusiness Department at EBRD put it: “I am very much impressed with the quality of this Forum. It is the best in the industry in Ukraine”.
The general mood was best described by Victor Ivanchik, Founder and CEO of Astarta Holding who said: “In my opinion we have hit the bottom and there’s no other way for us except to get up and develop. All of us are experiencing now a careful optimism. The country is getting ready to a new phase. We hope that the new Government will be able to build foundation for a healthy agrarian economy. I am confident, that we, agrarians, will be able to thoughtfully use the new opportunities!”
Press and Media Coverage and Projects:
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The Ukrainian Agricultural Forum 2010 in quotes:
LEONID KOZACHENKO, President of the Ukrainian Agricultural Confederation
- “The Ukrainian agricultural sector has enormous POTENTIAL – but it is not being realised”.
- “The new government is in a difficult situation. It needs to lay down NEW FOUNDATIONS, but is having to fight fires every day”.
- "What should we be striving for? The REMOVAL OF POLITICAL RISKS. Agriculture had become a social contributor. There was practically a BAN ON MAKING PROFIT. An investor would find himself in a constant STATE OF SHOCK! The biggest obstacle to the development of the agricultural industry in Ukraine is INSTABILITY."
- "We must COMPLETE THE REFORMS: land, reforming the systems of governance, market infrastructure; there is no system for hedging risks”.
- "We need not subsidies but INVESTMENTS. Then production will rise”.
SERGEI MELNIK, Ukrainian Deputy Minister for Agriculture
"... Big business has arrived in the agricultural sector, which has the means, and the land will not be vacant. We hope that the Government will GIVE PREFERENCES to this sector of the economy. We know that the President and the Prime Minister have identified the AGRICULTURAL SECTOR AS PRIORITY. "
Yevgeny Leng, Managing Director, Agro Ukrzernoprom
- "I believe that what is missing now, in both the Ukrainian agricultural sector and government, and for foreign businessmen interested in working in Ukraine, can be expressed in one word - STABILITY. Stability in agricultural policy, in general economic policy, and in the rules of the game, as it is played in the market today. "
- "The problem of VAT should be solved! It’s possible to securitize what has been accumulated to date. The agricultural sector is a good testing ground, where one can try to observe VAT. If we approach the problem creatively, then we obtain a RAPID SPURT and a great growth in interest from traders in the industry."
Giles Mettetal, Director of the Agricultural Department of the EBRD
“The European Bank for Reconstruction and Development (EBRD) has in 2010 put EUR 200 million into the development of the Ukrainian agricultural industry. In the last year, the bank has increased its investment in the Ukrainian agricultural industry by 30%.
YURI Logush, Vice President, Kraft Foods, Director for Ukraine, Eastern Europe and Central Asia
"The crisis is a perfect time for investment. We invested in 1993-94. To be the best, it is desirable to be first. "
"We think that working conditions in Ukraine are more or less ok. DO WE WANT TO SEE REFORMS? OF COURSE! Which reforms? "Over the two days of this forum, we could spend a lot of time discussing this!"
INVESTORS:
Mark Maclornan, Director General of Investment, Agro - Terra Partners
"For us, as investors, what’s most important for us is the company’s MANAGEMENT TEAM. More efficient use of land, increased efficiency - yes! I hope that in future we will invest in Ukraine. But the key to success lies in creating a successful team and effective management! "
Elena Voloshina, Head of Representative Office in Ukraine, International Finance Corporation
"In our strategy for the next 2-3 years, the agribusiness sector is number 1. Our criteria: We must be convinced that the company has good management, a clear business structure. The question of land is not yet so important, when the company can offer collateral using other assets. But, probably, if there were no moratorium, there would be more customers for both the IFC and the banking sector. "
Irina Starodubova, Partner, Horizon Capital
- "We are ready to look at projects for the construction of GRAIN ELEVATORS and PORT BERTHS”.
- "We are interested in companies that have SELF REPAIRING TECHNOLOGIES and EXPORT potential.”
Giles Mettetal, Director of the Agricultural Department of the EBRD
"We are continuing to work with companies such as Astarta, we have helped the Obolon factory, as well as multinational firms who wish to work in Ukraine, in particular the French seed processing cooperatives. We are developing cooperation with local firms that have an appropriate business plan”.
INFRASTRUCTURE:
Vadim Miroshnichenko, Head of Trade, Cargill
“VAT is the highest priority issue for all exporters, which, unfortunately, is NOT BEING RESOLVED”.
CHALLENGES:
Sergey Melnik, Ukrainian Deputy Minister of Agriculture
"We have had TO POSTPONE a large volume of work due to adverse weather conditions. As far as I am aware, only the Crimea is completing the early sowing of spring crops, while other regions are still not able to begin work, or even to fertilize the soil”.
Irina Starodubova, Partner, Horizon Capital
- "We are waiting for STABILITY from the state!"
- "We all understand that in Ukraine there is a MORAL and MENTAL restrictions on the sale of land. We must FOSTER A CULTURE OF OWNERSHIP, as in Central Europe. How long will this take? About 20 years ".
- "If the STATE helped BUY the TECHNOLOGY, it would increase its export capacity."
LEONID KOZACHENKO, President of the Ukrainian Agricultural Confederation
“The State Tax Administration seized the accounts of Astarta Holding.They demanded that the company change its status from a limited company to a JSC, as it has more than 50 founding members. The company changed its status, but now the tax authorities are demanding payment of taxes on all assets, although there has been no purchase of a new company, just a change of status.” Leonid Kozachenko.
FORECASTS:
Sergey Melnik, Ukrainian Deputy Minister of Agriculture
"The forecast figure for Ukraine’s grain harvest in 2010 is estimated at around 48 million tonnes.”
Irina Starodubova, Partner, Horizon Capital
- "Ukraine is the world’s 3 rd largest exporter of cereals, with a 10% market share in world grain exports. If we increase yield by 25% (by 2 tonnes per hectare), then we will capture 15% of the world grain export, as Leonid Kozachenko said.
- "We are not so far away from 2nd place in the crop production ratings".
Stepan Kapshuk, CEO, Ukroliyaprom
“Ukroliyaprom predicts the production of sunflower oil in the 2009/2010 marketing year to be around 3 million tonnes."
PLANS:
IFC intends to invest UAH50 million in the Mriya agriholding. The money will be used to replenish the land bank (increasing the land area) of the company and to increase production capacity, as well as for energy efficiency programs.
Sergei Yevlanchik, Director General, Ukrproduct Group
"We are interested in a stable milk supply and are looking for partners to develop our resource base. We are ready, alongside a potential investor, to develop the dairy industry in those regions in which we currently operate (mainly the Khmelnytsky and Vinnitskaya regions.), as well as in other regions. This project requires USD160 million to implement, which is impossible to draw from share capital only. ¾ of the finance for this project will be from loan capital, taken for a period of 4-6 years.
"Astarta" intends to expand its land holdings to 200 thousand hectares.
Victoria Yatsenko, Head of Procurement, Nestle Ukraine and Moldova
"Nestle are not planning to acquire new businesses in Ukraine during the current year"
GRAIN, OIL and FAT INDUSTRY:
Victor Ivanchik, CEO and founder, Astarta Holding
"The company began construction of two elevators in the Khmelnytsky and Vinnitsa regions with a combined capacity of 20-30 thousand tonnes of grain storage."
Stepan Kapshuk, CEO, Ukroliyaprom
"In the current year, the sector will show good results, despite the fact that domestic prices will be stable. The domestic market consumes 500 thousand tons per year, although production is up to 5 times greater”.
DAIRY SECTOR:
Sergei Yevlanchik, Director General, Ukrproduct Group
"In Ukraine, the mechanism of state intervention does not work. There is no strict control over the quality of milk. There is no refund of VAT. The existing scheme for the return of NBU stakes is opaque. There is no lobbying for the interests of milk producers and processors. But despite the shortcomings, all the same, there are opportunities for long-term investments in the dairy sector. It is necessary to improve the quality of milk and go to the markets of Europe. New technologies are needed: the yield from one cow in Ukraine is 4 tons per year; in Europe it is 9 tons. "
IRINA Starodubova, Partner, Horizon Capital
"The dairy industry is likely to attract investment from processors, rather than equity funds"
SUGAR & LIVESTOCK:
Sergei Melnik, Deputy Minister, Ukrainian Ministry of Agriculture
Today the Government has identified the areas that most need public support in the country’s agricultural sector in the country – CATTLE-BREEDING and the cultivation of SUGAR BEAT, and sugar production in domestic refineries"
Stepan Kapshuk, CEO, Ukroliyaprom
"Today there is only way out. To turn AWAY FROM RAW SUGAR, the high price will stimulate the sowing of sugar beet in Ukraine. We need to enter foreign markets. We must conquer them. No one is waiting for us there! We need to seek out markets, even in the CIS: Russia, Kazakhstan "
Sergei Fedorenko, Chairman of the Supervisory Board, UKRROS
"We (in the sugar industry) have a problem - NO MONEY. Investors have come to you (in the grain industry), a good example is the Olsidz group. There has been no IPO, but they got the money and developed. I think that it is a big mistake to hide behind the law regulating the sugar industry, instead of, in order to give freedom to the sector, closing the border and reducing regulation.
Nikolai Yarchuk, CEO, Ukrtsukor
"Farmers will sow around 400-450 thousand hectares of sugar beet in 2010. This will fulfil all of Ukraine’s sugar needs."
Irina Starodubova, Partner, Horizon Capital
"Livestock is the most promising direction for the future".
HORTICULTURAL SECTOR:
Victoria Yatsenko, Head of Procurement, Nestle Ukraine and Moldova
"Unfortunately, the quality of Ukrainian vegetable leaves much to be desired. It does not allow us to increase procurement from local manufacturers, so we are actively looking for companies that can offer us quality products."
March 16th, MASTER CLASS on ““LEADERSHIP CHALLENGE. MASTERING CHANGE AND HOW TO SUCCEED IN THE NEW ECONOMIC LANDSCAPE”
The Forum has started with a ground breaking Master class from a world renowned management consultant Shoham Adizes, Vice President on Operations at Adizes Institute.
This master class was so timely for Ukraine. Changes are coming to the country and Shoham shared invaluable ideas on how to manage Change, on how change gives birth to problems and opportunities and how we are there to manage that ourselves!
What we heard seemed simple. What we have seen on Shoham’s slides looked so familiar and true. But it wasn’t that simple. Using clear and distinct examples Shoham led us through the whole Adizes methodology. The ideas on organisational change were revolutionary because they seemed not so cumbersome and yet in reality they are so complicated. These ideas can be implemented and lead any company to success. They can be applied to a large agriholding, to a small farm or to the whole country! Here are some interesting quotes:
- “We have the power to change or not to. We can speed up change by accepting innovation”
- “Nobody in Africa wears shoes! Is that statement a problem or an opportunity? Problem and opportunity is the same, it is our perception that changes. Change causes problems and opportunities. What should we do? This is where word “management” comes in. That is our job to manage problems and opportunities”
- “2 guys are hanging around in Africa. Then they see a lion who looks like it is going to attach them. One of the guys starts changing the shoes, putting on trainers. The other one asks “What are you doing? You can’t outran the lion!”. To that the 1st guy replies “I don’t have to outran the lion. I just have to outran you!” Put on your running shoes and outran your competition!”
- “Can an organisation be fully short time and long term oriented at the same time? – No! You can’t be effective and efficient at the same time. “
“Structure can burn people. Authority – responsibility – reward. Ask yourself the following questions:
1. What are my responsibilities? (How much money am I supposed to bring in?)
2. What do I have authority over? (What decision can I say “yes” to? How much money am I allowed to spend?)
3. What are the rewards?
If you change responsibilities of a person and not change his authority and his rewards, he will get burnt!”
“The most sensitive part of human body is a wallet” “THE WORLD IS AT OUR FINGERTIPS!”
Do not miss the opportunity to listen to exclusive interviews on our website from:
- Dmitry Berezovskiy, President, National Agricultural Chamber of Ukraine
visit interview page
- Igor Buchatksiy, CEO, SAGRO
visit interview page
- Vadim Mogila, General Director, Sintal Agriculture Plc
visit interview page
- Viktor Ivanchyk, CEO and founding partner, ASTARTA Holding N.V.
visit interview page
- Jacques Mounier, President of the Board of Management, Calyon Bank Ukraine
visit interview page
- Leonid Kozachenko, President, Ukrainian Agrarian Confederation
visit interview page
- Gilles Mettetal, Director, Agribusiness Team, EBRD
visit interview page
- Mikhail Korylkevich, Director of Development «Dakor Agro Holding», Chairman of the Board «Ukrmilkinvest»
visit interview page
- Aleksander Pochkun, Managing Partner, Baker Tilly Ukraine
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