Ukrainian cat and dog food manufacturer Kormotech is investing EUR14 million to expand its production in Ukraine and Lithuania during 2022-2023, the company’s press service told Interfax-Ukraine.
Reportedly, some of the projects are already being implemented and some are planned to be implemented by the end of 2023. Investments in the Lithuanian plant in 2022-2023 will total EUR 5.4 million, and in Ukrainian plants for wet and dry feed by the end of this year will be about EUR 8.5 million.
The wet fodder production capacity at the Kedainiai Kormotech plant in Lithuania is expected to increase by 25%, and at the Ukrainian plant by 65%. At the Lithuanian plant, the company has integrated new technology for the production of wet feed in the premium and super-premium segments.
In Ukraine, the company is expanding the capacity of its wet feed factory, modernizing 50% of its existing equipment and automating manual processes, the company said. In addition, it plans to modernize its dry feed plant in 2023.
According to the press release, Kormotech continues to improve the efficiency of existing production and business processes.
According to the press release, last year it began working on a “zero losses” program to reduce all irreversible losses at the plant to zero or to recycle them. A complete energy audit of the production in the areas of heat recovery, thermal insulation and the system of monitoring of energy consumers in the processes was carried out. Kormotech began implementing the SAP ERP system in the cloud, which will help focus on innovation, reduce operating costs and improve process efficiency.
Kormotech’s 2022 results show a 12 percent increase in turnover to $124 million from $110 million in 2021. The goal in 2023 is to reach a turnover figure of $150 million and increase the export/Ukraine ratio to 30%/70% from 24%/76% previously through synchronous growth of markets, the report said.
LLC “Kormotech” is the leading Ukrainian manufacturer of food for cats and dogs, occupies the 51st position in the world ranking of petfood producers and the seventh in the ranking of the most dynamic petfood brands. Kormotech sells its own brands and partner brands in 40 countries.
The company has two dry and wet food plants in the Lviv region and a plant in Lithuania. The company produces products for cats and dogs under its own brands Optimeal, CLUB 4 PAWS (TM “Meow!” and “Woof!”) and in private label direction. The assortment has more than 650 items.
The ultimate beneficiaries of Kormotech are Elena and Rostislav Vovk.
A large Ukrainian manufacturer of feed for cats and dogs, Kormotech LLC (Prylbychi village, Lviv region), has accumulated stocks of finished products in Poland for four weeks of work, and also signed contracts for feed production in the EU in case its factories stop in Ukraine.
Such measures allow the company to guarantee the continuity of product supplies to European partners in the context of the war in Ukraine, its CEO Rostyslav Vovk said at the Forbes online conference Building Together on Friday.
According to the head, Kormotech opened a logistics center in Poland, where it keeps a stock of products corresponding to four weeks of operation of the company’s two factories located in the western regions of Ukraine – the production time and delivery to a European buyer under normal conditions. This allows “covering” orders from the EU with finished products for a month, while the company solves possible problems with production or logistics.
Vovk also emphasized that his company can guarantee the supply of dry pet food to Europeans from its factories in Ukraine even if production in the country stops due to factors caused by the Russian invasion. To do this, at the beginning of the war, Kormotech signed an agreement with its European partners for production of feed under the Kormotech brand at third-party enterprises in the EU.
“We gave our partners two options: we will work in Ukraine until the very end. As long as we can produce feed in Ukraine, we will produce it. If we have any difficulties or problems, you will receive a similar product from our European partners next month” Vovk said.
He clarified that doing business in Europe usually does not bring super profits, but it also allows for stable development over a long period.
“If you are planning to develop your business in Europe, you need to be clear that this is a long-term business – it can take months or years to sign a contract, and there are no super profits if you do not have a unique or monopoly product. On the other hand, you have a guarantee for many years that you will gradually grow and be able to plan your business processes,” the CEO of Kormotech said.
Kormotech LLC is a leading Ukrainian manufacturer of feed for cats and dogs. The company exports products to 32 countries, including the USA, UK, Germany, France, Finland, Sweden, the Netherlands, Spain, Italy, Poland, Turkey, Iran and Chile.
A large Ukrainian producer of pet food for cats and dogs Kormotech LLC (Prylbychi village, Yavoriv district, Lviv region) will build in Ukraine another plant for the production of the company’s main products, which will increase its capacity several times and ensure the growth of exports, Rostyslav Vovk, the CEO and co-owner of the company, has told Interfax-Ukraine.
“We plan to build a plant four times more powerful than the one that is now in Ukraine. The expansion will last for three years,” he said on the sidelines of the International Summit of Mayors in Kyiv.
Vovk said that the main goal of the expansion is to increase the supply of products for export. “We do not have enough products for our export markets. We have already taken our place in Ukraine, and now we need to deal with Europe, go out into the world,” the head of the company said.
Speaking at the summit, he said that this week his colleagues defended a project for a new factory in Ukraine with an estimated cost of EUR 93 million.
“So, perhaps, we will need an “investment nanny,” Vovk said, commenting on the possibilities of using this mechanism of state support for investments in Ukraine, recently enshrined in law and planned for practical implementation from the end of this and the beginning of next year.
At the same time, the head of the company told Interfax-Ukraine that it is still incorrect to name a specific figure for the planned investments, since it could change significantly.
At the summit, Vovk also said that the plant will be opened in Lviv region.
Kormotech, founded in 2003 with its head office in Lviv, manufactures products for cats and dogs under its own brands Optimeal, Club 4 Paws (TM Miau! and Gav!) And in the private label direction and exports products to 37 countries.
The European Bank for Reconstruction and Development (EBRD) plans to provide Kormotech LLC (Lviv region), a large Ukrainian producer of pet food, with a loan in the amount of EUR 10 million.
According to the EBRD, the loan could be issued to Kormotech for the construction of a pet food plant in Lithuania and the expansion of feed production facilities in Ukraine.
The bank said it would support the first cross-border investment of the Ukrainian company, consisting of the construction of a new production facility in Lithuania.
According to the EBRD, Kormotech is one of the three largest producers of pet food in Ukraine.
The EBRD could approve the decision on the loan on December 11, 2019.
As reported, Kormotech launched the construction of a feed plant in Lithuania in 2018 and plans to launch it in 2019. The planned capacity is 5,000 tonnes of wet feed per year.
Kormotech exports products to over 20 countries, including France, Estonia, the Netherlands, Slovenia, and Poland. The company’s facilities include two plants for the production of dry and wet feed in Lviv region. The company produces goods for cats and dogs under its own brands Optimeal, Club 4 Paws.
The ultimate beneficiaries of Kormotech are Olena and Rostyslav Vovk.
Kormotech LLC (Lviv region), a Ukrainian producer of cat and dog food, plans to expand the number of countries to export its products in South America and enter Hungary, Lebanon, Libya and the Czech Republic with own brands, the company’s press service has reported. According to the company’s press release, Kormotech is now delivering private label products to Chile in cooperation with Chilean distributor Anasac Ambiental. “Anasac Ambiental works throughout Latin America. In the future, we plan to increase the number of export countries. Therefore, we hope to cooperate with a Chilean partner in other countries of South America not only in private label, but also with Kormotech brands,” the press service reported, citing Production Director Ihor Paraniak.
As the company told Interfax-Ukraine, the company sent the first shipment to Chile in November 2018, its volume was 43 tonnes of wet food for cats. The sales in the new export countries are planned under private label, as well as Optimeal and Club 4 Paws trademarks.
In addition, the company plans to export products under its own brands to Hungary, Lebanon, Libya and the Czech Republic.
At the same time, Director and co-founder of the company Rostyslav Vovk said in an interview with Global FDI Reports that Kormotech is considering the acquisition of other pet food companies.
“We are building a new plant in Lithuania. And in the future – not next year, but soon – we are considering some acquisitions… In the near future, I think we will find companies that we can buy,” he said.
He also said that at the moment the strategic export directions for Kormotech are Poland, Romania and the Baltic countries, where the company has its own sales departments.
According to the results of 2018, Kormotech increased sales to 37,000 tonnes (a rise of 19%), exports amounted to 12.5%. By 2023, the company plans to increase the share of export sales to 50%.
In 2018, Kormotech increased the annual capacity of wet food production to 16,000 tonnes, and in 2019 plans to launch a wet feed factory in Lithuania with a capacity of 5,000 tonnes per year.
In addition, in 2020, Kormotech wants to increase the production of dry food at its production facilities in Ukraine to 46,000 tonnes (now – about 30,000 tonnes).
In 2019, the company plans the first private label shipments to the U.K. and Finland, as well as to go to U.S. retail chains (now products are sold through Amazon in this country).
Kormotech exports products to about 20 countries, including France, Estonia, the Netherlands, Slovenia, and Poland. The facilities of the company include two plants for the manufacture of dry and wet pet food. The company produces products for cats and dogs under its own brands Optimeal, Club 4 paws (Meow! and Woof! trademarks) and in private label.
The ultimate beneficiaries of Kormotech are Olena and Rostyslav Vovk.
