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.
According to the pessimistic forecasts, the market for pet food may fall to 20% by the end of 2020, CEO of Kormotech Rostyslav Vovk said. “The experience of previous crises shows that according to the pessimistic scenario, the market for finished food in Ukraine can go down to 20%,” he told Interfax-Ukraine.
According to Vovk, in the field of animal care, the crisis becomes considerable in one and a half or two years after its beginning. He said that over the past five years, the food market for cats and dogs has grown by 15% annually. The market volume amounted to 122,000 tonnes in 2019.
“This year it will not grow in full size, but it will not go down significantly either, as feed is a product that is difficult to quickly replace (with another feed or food from the table). At the same time, we are predicting, based on the results of previous crises, that demand for keeping expensive pedigreed dogs and cats will decrease slightly. This means that kennels will become less involved in breeding and this will certainly lead to a decrease in feed consumption,” the CEO of Kormotech said.
According to him, the population will have significantly less money by the autumn, and if product prices begin to rise, pet owners can not only buy less, but also look for a cheaper alternative.
“Customers who generally preferred products of the economy segment are more likely to start buying less, adding water to dry and cereal to a wet diet,” Vovk said.
The CEO of Kormotech said that the demand for the company’s products grew by 30% in the second half of March, and as of the second week of April began to return to normal range.
“We assume that the owners of the animals made feed stocks in the same way as other products. In small retail outlets, usually located near residential buildings, sales grew by 30% (the share of this sales channel for our products was 15%), online stores by 45% (the share of this channel is 5%). Pet stores are key point of sale, showed an increase of 32% (the share of this channel is 55%),” Vovk said.
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.
