The Ukrainian company Organic-D has started growing “borsch set” vegetables in 2018. The company supplies products to large retail chains in Ukraine and is negotiating with importers to access the foreign markets. Vadim Krychkovsky, co-founder and director of the company is confident that with the development of exports, producers of fruits and vegetables could be competitive. The company cultivates about 1000 hectares of land today. 200 hectares are used for growing vegetables.
The company plans to increase the area planted with vegetable crops to 300 hectares by 2023. Vadim Krychkovsky, director of Organic-D, has told about the peculiarities of running a vegetable business in Ukraine. He has also talked about the success of the company and its plans to enter export markets.
“We are guided by the main principle — food safety and high quality. In Ukraine agricultural companies used to pay much less attention to the environment, ecological production, minimization of fertilizers, and a rational and careful treatment of soil. However, now the trend is to be as safe and high-quality as possible. This brings an economic effect and allows to trade not only in Ukraine but on export markets, as well,” Vadym Krychkovsky said.
“Organic-D ” began to cooperate with international retailers ‘Metro, Auchan, and carried out the first deliveries to the hypermarket Epicenter in Ukraine this year. To meet the requirements and high standards of retail, the company has certified its products according to the GLOBAL G.A.P standard.
“This is the requirement of the chains. It took some effort and some investment. After that, retailers saw that the quality of our products was certified by European certification bodies. If you cooperate with a powerful retailer, the others also start paying attention to you and offer cooperation. The main thing is to go through all the stages (certification, etc.), get to work with retail chains, fulfill their requirements and deliver quality products on time. In this case, cooperation can be quite profitable,” — Vadym said.
He notes that one of the company’s goals is to change the domestic market so that not wholesale buyers set a pricing policy, but producers can grow high-quality products and independently determine where to sell them.
“Retailers are ready to pay even more for potatoes of the same quality as we make, but they would not buy substandard farm potatoes (infected with diseases, non-marketable type) even at 5 UAH/kg. Therefore, we often cooperate with local producers, consult, and give them access to technologies so that they can enter the domestic market together with us and sell products at a good price”, said Vadym Krychkovsky.
The company is present on the market of the Vinnytsia region of Ukraine in the segment of “borsch set vegetables” and continues to increase production volumes to successfully expand its market share in Kyiv and central regions of Ukraine, as well as enter export markets.
“To achieve the goal, we need to sell about 20 thousand tons of products per season. The company produces about 8 thousand tons of products today, so there is room for improvement”, the director of the company explains.
The company considers international trade and exports as the main step. Negotiations on exports to the United Arab Emirates are underway, as well as negotiations with partners in Uzbekistan. Negotiations on supplies to Belarus have been suspended due to the socio-political situation in the country.
“We are also interested in the European market, but the difficulty lies in the fact that the EU legislation requires that the products exported must be washed. Technically, we do not know how to deliver washed products to distant destinations yet. We are focusing on two products now — onions and potatoes. There is a demand for such products in Poland. However, we are primarily focused on deliveries to the UAE. The advantages of the external market are stable contracts in foreign currency. Export looks very interesting considering the “floating” Ukrainian market”, said Vadym.
About the advantages of Organic-D, he said: “We have two main competitive advantages — price and quality of products. We also have a GLOBAL G.A.P certificate required for export. We grow modern hybrids and varieties of vegetables of foreign selection. For example, French-bred Clause carrots, Japanese-bred beets (from Sakata), German-bred potatoes (Europlant). These varieties are expensive, but there is the opportunity to have higher yields. Vegetables and potatoes also have better taste and an attractive appearance”.
The company is also trying to replace chemical fertilizers with organic ones. According to Vadym Krychkovsky, this allows not only to improve the quality of products but also to reduce the cost of production, because the prices for mineral fertilizers rise by 20-30% annually.
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