Kormotech, a leading Ukrainian manufacturer of cat and dog food, will expand its production in Kėdainiai, Lithuania, investing more than EUR60 million in four production stages to be commissioned in 2025-2028, the company’s press service told Interfax-Ukraine.
“Lithuania is now our window to the world. Our plant in Kėdainiai has become a reliable support for us – it always operates at 100% capacity, while in Ukraine we have to take into account the risks of shutdowns due to the war. We aim to further expand our capacity in Lithuania by building four additional production lines by 2028,” said Rostyslav Vovk, CEO and co-owner of Kormotech.
Kormotech launched its first foreign plant in Kėdainiai, Lithuania, in 2020. Currently, more than 170 specialists from Ukraine and Lithuania work at the wet feed production facility with a capacity of more than 20 thousand tons per year.
“Our successful experience of building and operating in Lithuania, favorable conditions in the free economic zone, support from Invest Lithuania and our well-established network of partners and suppliers led us to the decision to expand the enterprise,” emphasized Vovk.
Kormotech plans to launch the first new production line by 2025, adding a line each year until the four production lines are fully operational in 2028. As the expansion project progresses, the company will be interested in finding qualified engineers, technologists, and other highly specialized professionals in both Ukraine and Lithuania. With the new expansion project, Kormotech will double its current workforce in Lithuania, adding 200 new jobs in five years.
According to Elius Civilis, Director General of Invest Lithuania, the Lithuanian state agency, Kormotech’s expansion shows that Lithuania is open to foreign investors and creates truly favorable conditions for them.
“In Kėdainiai, Kormotech has built a modern, highly automated plant employing local specialists of various competencies. The company’s decision to expand its facilities and double the team size demonstrates the quality of both the local business infrastructure and talent,” emphasized Chivilis.
In Ukraine, Kormotech is constantly expanding its production capacity. During 2022-2023, the company invested about $14 million to modernize dry feed production and expand wet feed production by almost 70%.
“We plan to build new production facilities in Ukraine immediately after the war ends,” said Vovk.
Kormotech is a global family-owned company with Ukrainian roots that has been producing high-quality cat and dog food under the Optimeal, CLUB 4 PAWS, Woof, Meow! The company has production facilities in Ukraine and the EU. The product range includes more than 650 items.
The company is among the TOP-60 global pet food manufacturers and TOP-20 most dynamic pet food brands. Kormotech sells products of its own brands and those of its partners in 40 countries.
Currently, the company employs about 1300 people in five countries – Ukraine, Lithuania, Poland, Romania, and the United States.
Invest Lithuania is a non-profit agency under the Ministry of Economy of the Republic of Lithuania. Its mission is to attract foreign investment. It serves as a point of contact for foreign companies and accompanies international business at every stage of the process of starting a business in Lithuania, providing information on recruitment, tax benefits and financing options.
Kormotech, Ukraine’s largest manufacturer of cat and dog food, will implement a number of investment projects in Ukraine and Lithuania, where it has production facilities, as part of the development of its production capacities in 2023-2024, said the company’s beneficiary Rostyslav Vovk during a Business Breakfast with Forbes Ukraine on Wednesday.
According to him, Kormotech completed a 25% expansion of the company’s factory in Lithuania in the second quarter of 2023. In addition, in the third quarter, it will put into operation a new line at a factory in Lviv region for the production of wet fodder.
“EUR8m was invested in it (the new line at the factory in Lviv region), which allowed us to expand the plant’s production capacity by 65%. If earlier its capacity was 17,000 tons (of fodder – IF-U) per year, now it will be 27,000 tons,” he said.
In addition, according to the information of the company owner, at the end of 2023 Kormotech will start construction of a new factory in Lithuania, in which it will invest more than EUR60 mln.
“This factory will have the same capacity as our two factories in Ukraine. It will be plus 40 thousand tons. We should reach the launch of the first line in the middle of 2025,” Vovk emphasized.
Kormotech, Ukraine’s largest producer of cat and dog food, is setting up a venture capital fund that will invest in the development of petcare and petfood startups, the company’s press service told Interfax-Ukraine.
The UK-based Kormotech Ventures division will search for relevant startups and invest in innovative areas of the company’s development in international markets.
“We were once innovators when we were the first to produce cat and dog food in Ukraine. It is important for us to maintain these fundamental things – flexibility and openness to new knowledge. We want to preserve and multiply the bold entrepreneurial spirit with which we created Kormotech 20 years ago, and with which we became leaders in Ukraine and became one of the top suppliers in strategic export markets,” said Rostyslav Vovk, CEO and co-owner of Kormotech.
Kormotech Ventures will focus on finding innovative startups that are looking for seed investments in the pet care industry in Europe and the US. The company will also fully manage investment projects as a majority shareholder.
It is specified that the core of Kormotech’s business will remain unchanged – the development of high-quality pet food production and expansion of its presence in the pet food markets in Central and Eastern Europe.
The first investment of Kormotech Ventures was the acquisition of a controlling stake in Rocketo, a Lithuanian startup producing organic dog food by gentle drying at low temperatures.
Rocketo is scaling up its presence in the UK market by developing a multi-channel distribution system. In particular, in addition to direct sales through its own online store, Rocketo has been included in the Future Brands program of the Sainsbury’s retail chain and will present its organic dog treats.
“As a family business, we strive to increase the value of our partners’ products and share our experience in organizing business processes, as well as the potential of our best specialists, which will be involved in the structure of Kormotech Ventures,” added Vovk.
Kormotech LLC is a leading Ukrainian manufacturer of pet food for cats and dogs, ranked 51st in the global pet food ranking and 7th in the ranking of the fastest growing pet food brands. Kormotech sells products of its own and partner brands in 40 countries.
The company’s facilities include two dry and wet food production plants in 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 private label. The product range includes more than 650 items.
In 2022, Kormotech’s turnover increased by 12% to $124 million from $110 million in 2021. The goal for 2023 is to reach a turnover of $150 million and increase the export/Ukraine ratio to 30%/70% from 24%/76% previously due to the synchronized growth of markets, the statement said.
The ultimate beneficiaries of Kormotech are Olena and Rostyslav Vovk.
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.
