Vitaliy Ilchenko: We Have Turned Ukraine Into an Exporter of the PPP
Photo by: Latifundist.com
Not only families but also whole generations work in the UKRAVIT group of companies. Vitaliy Ilchenko, the company’s owner, is a bright example of a person who works with his wife and father. He spoke with Latifundist.com how to build a successful family business and bring it to the international level, find an internal investor and compete with international corporations without state support.
Latifundist.com: UKRAVIT is a purely Ukrainian or an international company?
Vitaliy Ilchenko: We are the largest Ukrainian producer of plant protection products, our share in the market should reach 9% by the end of the year. But this absolutely does not prevent us from being a successful international player. We have turned Ukraine into an exporter of the PPP, which could not have happened in the USSR.
Latifundist.com: Do you plan to increase exports?
Vitaliy Ilchenko: Until today, we did not have enough capacity to increase exports. But soon we are opening a new production complex and will be able to supply more to foreign markets. We are also going to significantly increase the geography of exports. Nowadays we export products to Georgia and Moldova.
Latifundist.com: What share of the products is exported abroad?
Vitaliy Ilchenko: Approximately 7%. But this share is growing.
Latifundist.com: Which countries are you negotiating with?
Vitaliy Ilchenko: We negotiate with the countries of Asia, Africa, and Europe. We have become an international company: we have ISO 9001 certificate, and will soon receive ISO 17025 and ISO 14025. This will allow us to sell products to all countries in the world.
Latifundist.com: Are foreign clients interested?
Vitaliy Ilchenko: Looking for a reliable partner, many foreign companies visit us annually to see the development dynamics of UKRAVIT. Every year they are surprised by how much we change. This positively affects not only our company, but also the image of the country as a whole. They see that Ukrainian companies are growing, investing, and not just complaining. Therefore, when people say that it is necessary to attract a foreign investor, I say that it is better to support own production.
Latifundist.com: Do you feel such support from the state?
Vitaliy Ilchenko: There is no support. For example, it is even harder for Ukrainian producers to register new products than for a foreign company. In practice, this process often lasts a couple of years. Thus, if one is going to import the product, the person can register it and bring it to Ukraine in a year. And I am not saying about tax incentives and cheap loans that do not exist. At the same time, foreign companies get loans at 1-2% per annum, and we have to compete with loans at 17% per annum.
Latifundist.com: And what about the government's policy of deregulation?
Vitaliy Ilchenko: Deregulation positively affects business. Earlier, when the company was receiving a license to trade PPP, an inspection came to find the way to take it off or suspend. And to prevent this, it was necessary to pay a bribe. Even having all the documents, there always was a reason to take the business off.
Another thing is that deregulation is not a free-will, when everyone can produce any product without permits. I can not say that it was total in our market. Only one document was abolished — a license.
Latifundist.com: After the license was eliminated, there were fears that all sorts of handicraft production would activate. Did you notice this?
Vitaliy Ilchenko: Different kinds of "craft" producers who manufactured the PPP in artisanal conditions, would not last long. It's not enough just to produce something. There should be trained staff, and not to mention that one needs to have accreditation, get additional permits from environmental services, etc.
Latifundist.com: By the way, do UKRAVIT products get often falsified?
Vitaliy Ilchenko: Unfortunately, quite often. Therefore, every year we try to change the marking, create a new package, or quality protection elements. In general, we create all sorts of inconveniences for this kind of fraudsters. In addition, we have a list of official distributors. And here is a question for agricultural producers: where they buy products and who their supplier is. It happens that a person bought a counterfeit elsewhere and then claims that our products are of a poor quality. This is much unpleasant.
Latifundist.com: How does the state fight counterfeit?
Vitaliy Ilchenko: Sadly, it does not. This trend has intensified due to the reduction of the relevant monitoring bodies — the inspection of plant protection has been virtually eliminated.
Latifundist.com: Let us get back to the domestic investor. Please, provide an example how to "attract" one.
Vitaliy Ilchenko: For example, let us talk about garlic. Ukraine imports 90% of garlic, mainly from China. It seems that we do not have our own land or have no opportunity to grow it. Practically all landlords can grow garlic. It is not necessary for everyone to grow potatoes. You just need to give people seed, teach them, and everything will work out. Having so much fertile soil and hardworking people, claiming that we are poor is just a crime.
Latifundist.com: Your father is working in the UKRAVIT production facility in Cherkassy. Share your experience, how does it feel to work with close relatives?
Vitaliy Ilchenko: I will say more: not only my father works, but also my wife does. And in general our company is a big family. Already whole generations and many married couples work here. The atmosphere is favourable: all are friendly, help each other, and support the development of the company.
Latifundist.com: And what is your wife responsible for?
Vitaliy Ilchenko: She is in charge of finance. By the way, here is her table opposite mine (shows the next table in the office — author).
Latifundist.com: You do not even have time to relax from each other?
Vitaliy Ilchenko: You know, it is very convenient when it is possible to solve some production problems with your wife or father. You do not get tired at all. In addition, it promotes our communication. There are not only family topics for discussion, but also business ones (smiles).
Latifundist.com: Your father taught you before, and now, it seems, you have something to teach him in return?
Vitaliy Ilchenko: Yes, we even quarrel because of this sometimes (smiles). When you start telling your father what to do, he perceives you as a son. Not to mention that he must teach you.
Latifundist.com: You came to agribusiness thanks to him?
Vitaliy Ilchenko: Not quite. To some extent, even in spite of him. He was against me being engaged in agriculture. We started with the distribution of pesticides to fight domestic pests — rodents, cockroaches, ants, etc. Business is complicated and responsible, but the desire to develop and carry out big projects did not leave me. And when the company was established (in 1999 — author), the agriculture began developing rapidly. We saw that agrarians had the same problems. For example, there was a year when the fields literally swarmed with rodents and agricultural producers turned to us. When we saw that the situation in the field was more widespread, we decided to engage in agriculture more globally. So I got into agriculture and plant protection products market.
Latifundist.com: Probably, chemistry was your favorite subject at school.
Vitaliy Ilchenko: No, it was too easy for me. Teachers kicked me out of the classroom so that no one would copy my control works (laughs).
P.S. It seems that the key to successful PPP production lies on three pillars: constant development, family business and diligent study of chemistry.
