Kateryna Rybachenko: Tractor operators text me on Twitter to get a job
Good companies can’t be built with bad people
The Swedish investment company EastCapital bought the “Agro Region” company from the former two-time Minister of Agrarian Policy of Ukraine. At the time, in 2007, Ukraine was on the rise. An agrarian asset in a multimillion state, complete with a wonderful location near Boryspil airport, seemed a sound investment.
As EastCapital shareholders were not closely familiar with the intricacies of agribusiness, they decided to leave the previous management in charge of the company. That decision turned out to be a mistake. In as little as a year, the company ran out of working capital, it accumulated huge bank debts. This is when we realized: good companies can’t be built with bad people.
In 2009, I was invited to manage the company, being the only Ukrainian in EastCapital. A financial officer from Lithuania took over the accounting. We fired nearly all staff who were specialists in agriculture. Instead, we invited mathematicians, cybernetics, financiers, economists – young people who had no clue about agronomics, but knew very well how to set up processes and control them (the average age of “Agro Region” employees is 33 years). It became a kind of a start-up. The motivation was extremely high, as the company's survival was at stake. This is how we succeeded.
We reduced the amount of land the company owned by 30% – to 38.000 hectares, cut the number of workers fivefold, stressed high-tech innovations and unique know-how in all processes, we provided decent working conditions and focused on the corporate culture. Over the next eight years, we have not lost a single person we did not want to lose. “Agro Region” has firmly established itself as one of the three most crop-yielding companies. 75% of the produce is exported. We have placed our bet on corn, soy, and sunflower.
Is agriculture not prestigious?
Ukraine has got a problem with agrarian education. Graduates of agrarian programs usually know little of what is actually needed to work in a modern agricultural company. Therefore, starting from 2014, an agrischool has been functioning at “Agro Region”: while receiving their university education, students attend the company's training course, covering a variety of subjects – from sowing to harvesting. They have assigned mentors, experts from leading foreign companies deliver lectures on seeds, fertilizers, soil analysis, modern agricultural technology. At the end of the course we arrange an exam, and the best students are offered jobs at “Agro Region”.
There are also problems in terms of the perception of the agrarian profession – people believe it is not particularly prestigious. In 2013, we had a prominent case in our company. Our young Development Director decided to take part in a TV show. The idea of the show was simple: the participant mentions a few facts about himself to 20 girls, sitting with their backs turned to him; at any moment, each girl can press the red button to stop the conversation. When my colleague began with the fact that he was from Donetsk, half of the girls pressed the red button. That is, Donetsk was already unpopular back in 2013. But when he continued: “I work in an agricultural company”, the remaining ten girls simultaneously declined further acquaintance. It was kind of reality check for all of us: the agriculture was not sexy.
I cannot agree with this at all. Modern equipment, such as a sprayer worth half a million dollars, with a wingspan as wide as a Boeing's, needs a person in the cabin managing five computers at the same time. He or she must speak English and have degree in engineering. This is prestigious enough, isn’t it?
The world does not stop. Now, tractor operators text me on Twitter to get a job.
Technology in the first place
We started introducing technological developments and innovations by attaching GPS-navigators and detectors to everything that moves: we had sensors, "friend or foe" recognition systems, QR-codes everywhere. We also created a round-the-clock dispatch centre, with software developed by our programmers. We launched it in the summer of 2012, before harvesting. It became fully operational in autumn. That fall one in two tractor operators, combine and truck drivers quit. Despite all the financial and non-financial motivation offered by “Agro Region”, people kept quitting and looking for jobs with other companies, hoping to line their pockets dabbling with grain and fuel. Eventually, we completed the harvesting campaign successfully: the tech paid off before it was over. As a bonus, it resolved not only the issues of fuel economy and grain theft, but it also tossed out the people who cannot work honestly.
35 hectares of “Agro Region's” land are some 5 kilometres away from the take-off runway of Boryspil airport. As a foreign investor, we frequently communicate with embassies, banks, chambers of commerce and industry, foreign businesses. Official delegations often request to have a look at Ukraine's renowned agrarian potential. We have hosted foreign delegations weekly over the last ten years. It has become common practice. But then, around year and a half ago, the World Bank delegation wanted to get a glance at Ukraine's agricultural sector. During the organizers' negotiations, I had a shadow of doubt as to whether we could represent the whole country. This is a great responsibility. We can speak freely on everything concerning “Agro Region”, but we cannot speak for the whole country. That is when we had the idea of bringing several companies to a single location – the “Terminal Z” agricultural technology park. Its concept includes a coworking space, a zone for exhibitions and conferences and a hotel.
The French farmer cooperative Maisadour became our first partner, and they already have a 50-person office at “Terminal Z” as well as first in Ukraine R&D centre. They are a leading seed producer, a leader in the foie gras market with an annual turnover of €1.200 billion.
The idea of the park is to bring together companies that share the common view of transparent, socially-oriented, responsible business as well as to promote the brand of Ukraine. This is our way of communicating Ukraine's agrarian potential to an international audience. We know that some potential investors associate the Ukrainian agricultural sector with best soil in the world, decent earnings and success stories, while others fear the unscrupulous companies that ruin Ukraine’s reputation.
The country needs success stories. Those who have earned money in Ukraine are going to be the best ambassadors and advocates of doing business here.
For us, the “Terminal Z” project is highly personal, since we are also investors who entered the market in 2007 and nearly lost everything. However, we managed to rebuild the company, and now we want to show other investors that it is possible. “Terminal Z” can become an entrance point to Ukraine for new investors. Once they are in, the sky is the limit.