First Syngenta Partners in Ukraine, a Thousand Hectares of Crop Selection, 100 Thousand Square Meters of Warehouses: How the "Organism" of Stepova Agricultural Corporation Functions

How Stepova Agricultural Corporation manages to balance six areas of business: sale and export of seeds of its own selection, production and treatment of seeds, A-class warehouse rental, sale and storage of liquid complex fertilizers (LCF), and repair of agricultural machinery. Artur Rysin, president of Stepova Agricultural Corporation, and the top management share their insights.

16.12.2021

Stepova Agricultural Corporation has more than 20 years of history. It was the first in Ukraine to treat seeds for Syngenta.

Today, its portfolio also includes a research institute specializing in crop selection and research, and an A-class warehouse complex where Syngenta, Agrii, Soufflet Agro Ukraine and many other companies store their products. Its components base with a warehouse of one million items may be compared favourably with the facilities of Ukrainian dealers of agricultural machinery. The corporation exports its products, seeds of its own selection, to the markets of Kazakhstan, Uzbekistan and Belarus.

However, like most companies with this kind of experience, Stepova has had its ups and downs over the years. In 2014-2015, it signed an exclusive contract with inputs distributor Imperia Agro. Together, they created a joint brand, Best Corn, under which they marketed corn seeds. The fall of Imperia Agro and the termination of its export arrangements with Russia had a particularly adverse impact on Stepova Agricultural Corporation. It lost customers and market share. From that crisis, though, it has learned two truths: those who do nothing ever make mistakes; if you have a team that wants to develop and change the company for the better, all challenges are within your strength.

How does the Latifundist.com team see Stepova Agricultural Corporation? Make yourself comfortable to learn life hacks from the president of the corporation and the top managers.

Команда Latifundist.com вместе с Артуром Рысиным и топ-менеджментом сервисно-логистического центра

Latifundist.com team met by Artur Rysin and the top management of the service and logistics centre

It is one step from medicine to agro

The history of Stepova Agricultural Corporation dates back to 2000. At that time, Leonid Rysin buys a farm and starts an agribusiness. In 2009, his sons Artur and Timur returned from the United States. The eldest son Artur, while still a schoolboy, completed a medical course (because his parents dreamed of a medical career for their son) and then entered the International School of Medicine in St. Kitts, Caribbean Islands.

After a while he came to realize he had always dreamed of owning his own business and medicine was not the thing he wanted to do in life. At that point, his father suggested he return to Ukraine and develop agribusiness with him. As the current president of the company admitted, he was hired as the company's director on the rights of a senior loader. During the first five years, he learned everything from his father and literally followed him everywhere. He had to get up at 6 a.m. and return home at midnight, learning how to talk to the team and set tasks for them.

Soon Artur tumbled that he could not develop further in Ukraine without additional education, so he enrolled in the Dnipro State Agrarian and Economic University and got a degree in Business Management. By the way, he is still pursuing his education. He is a student at the Kyiv-Mohyla Business School, where he is studying for his MBA. And since 2015, he has been working on his PhD thesis on the impact of global warming on the cultivation of winter wheat.

So, we meet the founders and the current president of the corporation, and now, to more accurately reflect the whole structure of the Stepova agribusiness, which we have seen with our own eyes, let us imagine that it is a living person. And like every living person, it has a central nervous and cardiovascular system.

A research institute is a brain

In 2004, Stepova established four research laboratories for the breeding of cereal seeds, corn, legumes, soybeans and chickpeas. Historically, Synelnykivs'ka experimental station used to run the lands included later in the company. In 2003, Leonid Rysin bought 15 hybrids from the Corn Institute (now the Institute of Grain Crops of NAAS Ukraine), and began producing seed, restoring old equipment and machinery little by little.

In 2010, Stepova opened its Research Institute of Agrarian Business. Today it has a laboratory for molecular genetics and corn breeding, a seed laboratory. The Agricultural Corporation is the base enterprise of the Odessa Institute of Plant Breeding and Genetics named after acad. T.D. Lysenko and the V.M. Remeslo Myronivka Institute of Wheat of NAAS of Ukraine. These institutions provide new varieties, which Stepova tests and improves from high reproductions to 'super elite' and 'elite.'

Product
portfolio

Today, the corporation's product portfolio consists of two varieties of winter barley (Dev'yatiy Val, Snihova Koroleva) and one variety of spring barley (Preriya). More than 12 wheat varieties, including mid-season (Bohdana), early-mid (Podolianka, Mudrist Odeska, Niva Odesska, Pilipovka, Misiia Odeska, Zysk, Katrusia Odeska), early maturing (Bunchuk, Blahodanka Odeska, Liha Odeska).

There are also 8 corn hybrids in the portfolio: PAM 1033 (FAO 180), Dneprovskii 181 SV (FAO 180), Kremen 200 SV (FAO 210), RAM 1023 (FAO 230), RAM 1333 (FAO 180), Daniil (FAO 280), Shkval (FAO 270). The Agricultural Corporation has many products that can be registered and released on the market.

Артур Рысин, президент компании «Научно-производственная агрокорпорация Степная»

Artur Rysin, president of Stepova Agricultural Corporation

"Our selection is adapted to Ukrainian realities. I mean specifically the climatic factor. Since the hybrids have been bred and grown here, they are adapted to Ukrainian 'weather surprises.' We sometimes even outperform international companies. Imported selections are grown under ideal conditions. Anything that is bred in comfort then may not work well in a crisis situation. By analogy: can a person raised and living in comfortable and warm conditions prove himself in a crisis situation? The question is answerable," notes Artur Rysin.

His words are confirmed by the laboratory for molecular genetics and corn breeding at the Research Institute of Agrarian Business. They told us that the institute's experimental plots are located in the northern steppe zone, where weather conditions are very contrasting (periods of moisture alternate with periods of drought). Therefore, it is possible to breed corn hybrids resistant to lack of moisture and high temperatures.

"This year was perfect for imported hybrids in terms of weather conditions by mid-August: enough moisture and weather close to the conditions where they were bred. But when weather conditions become more stressful, the imported hybrids are far behind us. That is why more and more farms have become interested in Ukrainian selection because it yields in all conditions," points out the institute's scientist.

Stepova Agricultural Corporation facility

Today, 1,000 ha of farmland are allocated for breeding at Stepova. In particular, there are 32 experimental plots of 2-10 ha for corn. Another 22 ha are used as a control breeding nursery. Each year, the institute tests 3.5 thou. hybrids for yield and moisture-yielding ability. In parallel, they also produce additional 3,000 new hybrids. Now more attention is being paid to hybrids with a high moisture yield. For example, last year, the Shkval hybrid already appeared in the catalogue.

"What does the procedure for selecting the best hybrid look like? We discover the formula for the perfect hybrid. Then we test it for three years. If we see that it performs well, we send it for environmental tests in different climatic zones of Ukraine. And only then do we submit it to state testing, which lasts another 3 years," explains the institute's scientist. "Right now, for example, two of our hybrids are already undergoing such testing. Another hybrid, Luka, has completed its first year of testing."

is the heart of Stepova

Inventory items hub

The human heart is a continuously running pump. In the case of Stepova, the heart is the company Agrocenter Raevsky located in the village of Vesele in Dnipropetrovsk region. In fact, it is a hub, where all the goods and valuables are located. Earlier each enterprise of the corporation had to manage its own mechanized brigade, warehouses for fertilizers, PPPs and seeds, but now it is all collected in one place. In this way, the number of personnel in places was reduced and theft eliminated.

Agrocenter Raevsky is home to a seed plant, a small lot plant and a warehouse complex.

Seed

treatment plant

Alongside selling and exporting seeds of its own selection, production on demand, Stepova is also engaged in seed treatment.

Гравитационный стол на заводе по доработке семян

PETKUS Gravity Table at the seed treatment plant

A seed treatment plant was constructed in 2005. In 2003 Syngenta entered the market of Ukraine. Stepova became its official dealer. After some time, Leonid Rysin and Gebhard Rogenhofer, Syngenta's CEO, agreed to collaborate, and the former built a modern seed treatment plant in just 18 months. This is how Stepova created another asset, an additional line of business and an exclusive programme for several years of partnership with Syngenta.

Artur Rysin, president of Stepova Agricultural Corporation

"Syngenta planted hybrid sunflowers (1,000 ha) and corn (800 ha) on our land. Seeds were treated at our plant. The company also rented storage space and administrative office from us. We are still partners and Stepova provides a full range of seed treatment services," says Artur Rysin.

The seed plant director Oleksandr Lemayev describes how the plant was built. According to him, the construction of the foundation pit for the plant began in 2004. Since the soil in the area is heavy, they had to dig deep pits, fill them layer by layer with clay and tamp it. The next step was selecting an equipment supplier. The project of the Danish manufacturer Cimbria Heid GmbH seemed appealing, but there was one catch: to house all the equipment it was suggested to build a 500 m long plant. Then Oleksandr Lemayev and his colleagues began to ponder how to arrange the equipment in a more space-efficient way.

"We came up with the idea of setting it as a closed circuit. At the inlet, we receive the grain. It goes through primary cleaning, or aspiration, which removes impurities from it. Then the corn enters the secondary cleaning machine, where it is treated to the required size, for example, if it is corn, it is 6-10 mm. And then the seeds end up in the indented separator cylinder, the calibrating machine, the gravity table and in the storage hopper. They return in a circle to the outlet, where they are dressed and packed directly into bags. By the way, each machine is fully accessible and can easily be reached by machinery," details Oleksandr Lemayev.

Oleksandr Lemayev, director of the Stepova seed treatment plant

In 2016, the plant saw a reconstruction. The SORTEX Z+ photo separator by the Swiss manufacturer Bühler was installed, which separates seeds by colour and other properties. It is employed when "problem" seeds (mostly sunflower seeds) are to be treated. This crop is often infected with Sclerotinia. A characteristic feature of this fungus is that it forms a round or elongated body the same size as the seeds. Primary and secondary cleaning machines cannot sort out 100% of such seeds, but the SORTEX optical sorter does the job excellently.

In 2018, two more calibration machines were installed at the plant.

"When we had only one calibration machine, we could produce three fractions of corn seeds: coarse (10-8.5 mm), medium (8.5-7 mm) and small (7-6 mm). After installing additional equipment, we can produce round and flat corn from a given fraction, up to 5 fractions in total. So far we do not divide the third fraction in this way, because it is small and round," specifies Oleksandr Lemayev.

The treated seeds are fed into storage hoppers. There are three hoppers at the plant, 25 t each. From there, they are moved to the two grain dressing lines. All of the aforementioned equipment allows 3-4 different crops to be treated simultaneously. There will be no mixing of crops with one another at each stage of the treatment process.

The plant, like a heart, works around the clock in three shifts. Up to five or six workers work the shift. Two months a year the plant stops for regular repairs. All processes at the plant are fully automated. There is a control room where all production processes are monitored in real time.

As regards raw materials, 90% of wheat and barley come from Stepova fields. 90% of corn is produced by the company, 10% by third parties, while sunflower is 100% supplied by the company's partners. Companies including Syngenta and Limagrain Ukraine are treating their seeds at the plant.

Oleksandr Lemayev, director of the Stepova seed treatment plant

"Stepova is immensely powerful in wheat and barley. It is our icon. We have the capacity to produce 6-8 thou. t of grains at the plant, and we have the confidence that none treats the grain better than we do," declares Oleksandr Lemayev.

There is a laboratory at the plant to cover its needs. It controls the quality of the grain at every stage of production. The plant is currently passing ISO certification.

Small lot plant

A small lot plant has been in operation since 2015 specifically for the work of scientists of the Research Institute of Agrarian Business in seed production. Parental forms of corn from 50 kg to 50 t are treated at this plant. According to Vasyl Buhayev, the deputy director of the seed plant, the facility provides a full cycle of seed preparation.

"There is only a handful of similar small plants in Ukraine with a completely closed production cycle. Some of the equipment was designed and ordered exclusively for our needs. What makes it unique? We work with research material and observe its purity. For example, if 10-20 grains of other mixture appear in 1,000 t at a large plant, it makes no difference. For us, if we get 5 grains of another hybrid in 500 kg, that's a problem," says Vasyl Buhayev.

Vasyl Buhayev, deputy director of the Stepova seed plant

There is a Power Husker corn husking system at the plant. Three people operate it, removing non-standard corn, such as fusarium-infected, and then the seeds are fed into the threshing machine. It was selected so as to achieve minimal seed injury — only 0.1-0.2%. Grain cleaning and calibration into 5 fractions is carried out on the equipment of the domestic manufacturer Fadeev Agro Plant.

The seed plant has two grain dryers. One is gas-fuelled, and these days it is expensive for the plant. That is why another one was installed — one that runs on solid fuel (90% of it is corn cobs). By the way, the project was developed by the plant staff. At the moment both dryers are also involved in the main production, because, as Oleksandr Lemayev explained, the corn moisture content this year is 16-21%.

During the harvesting season, the small lot plant employs 10-12 people. If the plant supports the main production (from October to March), extra 4-5 employees are hired.

Storage facilities

of Stepova Agricultural Corporation

Stepova has its own A-class warehouse facilities for products and material assets. And the area is not that small — 100,000 sq m. Hence, there is an opportunity to lease space to other market players, and now 45% of it is occupied. All the required conditions are in place to store not only seeds but also PPPs, fertilisers, fuels and lubricants.

Liudmyla Popova, director for crop production at Stepova

"Syngenta, Agrii, Soufflet Agro Ukraine and many other companies rent storage space from us. We also accept products from smaller companies for storage. In winter, the temperature in the warehouses is kept at a minimum of +5℃. In summer, the temperature in the refrigerators is +16-17℃. The staff is provided with all necessary conditions for work, including shower rooms. If a client needs, the company offers an office for rent. Syngenta rents one, for example. We have a safe storage option, which means that we take the goods into storage and ship them. There is video surveillance on the premises and in the warehouses," says Liudmyla Popova, crop production director.

Many companies choose Stepova for its proximity to traffic interchange: the Simferopol highway and the railway station are close by.

Products are stored either in floor warehouses or in big bags. It was Stepova that once pushed for legislation to allow producers to store elite or super elite seeds in big bags.

Logistics is the circulatory system of Stepova

Stepova-Agromech is the artery of the corporation. Its primary function is to ensure that machinery enters the corporation's fields on time and completes its tasks. It is a huge hub filled with machinery. The transformation began here in 2018 when Vyacheslav Chuhunov was appointed director of the agro-technical department of Stepova Agricultural Corporation.

Техника John Deere агрокорпорации «Степная»

John Deere combine harvesters in Stepova-Agromech premises

Firstly, an in-house repair service was introduced. The corporation now carries out almost 100% of its machine repairs. For this purpose, Stepova has highly qualified personnel, the necessary tools and test benches.

Secondly, the company started switching to a single brand of machinery — John Deere. According to Vyacheslav Chuhunov, this decision followed the start of the partnership with the company Agrotek, which promptly supplies spare parts and services. "Did you specifically paint the warehouses and hangars in green and yellow to match the John Deere style?" we joke.

The company now has the following machinery at its base:

6 new John Deere C770 harvesters
9 John Deere 120 hp tractors
4 Berthoud trailed sprayers
AMAZONE trailed sprayer
2 Hagie self-propelled sprayers
HORSCH Pronto 10 m and 12 m seed drills
4 Maschio Gaspardo 16 row seed dril
a demo planting combine and a Haldor seeder

"All machinery is divided into groups: trucks (one person is in charge), imported machinery, which includes all large-sized machinery, including powerful tractors, combines and JCB machinery (two people are in charge), tractors and trailed machinery, forklift trucks (three people are in charge). Besides, there is a separate person in charge of body repairs. They all report to my deputy. So, there is a structure of 5-6 people who manage all the staff. There are a total of 77 people working at the enterprise," says Vyacheslav Chuhunov.

Vyacheslav Chuhunov, director of the agro-technical department of Stepova Agricultural Corporation

There used to be 112-114 mechanics on the staff. When Vyacheslav headed the agro-technical department, this number was reduced to 47. How did the reorganization come about? It was analysed who in the team could and was ready to work with various machinery. These people stayed, others were dismissed. We conducted training, and now the employees receive a much higher salary (up to UAH 50 thou. in the season), and they are working all the year round. As Vyacheslav explains, if a person is properly motivated, he gives a tremendous return.

There is a separate facility on the premises where the body parts of vehicles are repaired. Vyacheslav says that the company has 9 KAMAZ grain trucks on the books. This year, two more trucks and two trailers were purchased.

Vyacheslav Chuhunov shows one of the company's repair workshops

"At first glance, you wouldn't even notice that these machines are quite old. It's all through the efforts of the workers in the bodywork department. There is a German sandblaster there, it helps to remove the old paint and bring the body to a fresh state: welding, priming, puttying and painting are done where necessary. Last year we repaired 5 grain trucks like this," says Vyacheslav Chuhunov.

Another premise is the spare parts warehouse, which contains up to 1 mln items at a time. It was completed three years ago. That was when they came up with the know-how: each enterprise of the corporation should have its own shelving unit with the necessary spare parts. Each spare part was barcoded and entered into 1C software. By the way, only Artur Rysin supported the idea of such a warehouse, despite the fact that the investment was up to UAH 5 mln. Many colleagues and employees were against it. But this project has proven to be effective and it delivers significant savings.

There are barrels for liquid complex fertilizers (LCF) with the capacity of up to 5,000 t. Part of it — 2,300 t — is used to cover the corporation's needs and the remaining is sold. They also provide storage and shipment services for their customers. For this purpose, there are 5 vehicles for transportation of liquid fertilizers on the balance sheet.

The pulse is strong

The company is expanding its network of distributors in Ukraine and neighbouring countries. This year Stepova is releasing a new hybrid.

Preparation is underway to expand the corporation's infrastructure. The biggest project now is the construction of a grain elevator. This service is in demand in the region, so the company's management hopes to be able to turn this ambitious plan into reality fairly soon.

A corn grain soon to become a corn seed at Stepova seed plant

That's Stepova Agricultural Corporation we are presented: resilient, open to experiments, sustainable and spacious.

P.S. In 10 years, this is the first time Latifundist sees such massive and modern agrarian warehouses. We suggest you ask to visit the company's facilities and buy seeds while you're there.

Natalia Rodak, Latifundist.com
Photo by Oleksandr Stasyuk