AgroPortal.ua talked to the General Director of «Goodwelly Ukraine» Kasper Torup-Viladsen about the company's plans, new directions and further development of sustainable production.
For almost a year there has been a full-scale war in Ukraine. What were the biggest challenges for the company since February 24, 2022, and how was it possible to cope with them?
Kasper Thorup-Viladsen: For us, as Goodwelly Ukraine, the biggest challenge was to take care of our people. Since February 24th everyone woke up to a new reality. Many had to experience personal challenges, many of our colleagues went to war, as well as their husbands, brothers, relatives. It was incredibly difficult for everyone, and we had to adjust to the new life, and most importantly, we had to make sure that families were safe. Secondly, we had to make sure that we could take care of our business in the new environment.
I believe we were able to do this fairly quickly because of the commitment of our colleagues. Everyone understood that this was a new life, and we had to face the challenges before us.
Of course, we had to change the way we worked. We had people working night shifts, and we had curfews, the air-raid alarms were going off all the time, so we had to make sure people could feel safe at that time. At the same time there was a sense of loyalty, and it was more than a job. It was about taking care of Ukraine, about producing grain and protein for the Ukrainian population and the soldiers.
These were our biggest challenges in the beginning.
We saw a lot of problems in the supply chain. Many of the products we used to buy all the time became unavailable in the same places, so we had to change our supply chains. It was very difficult to get protein for a certain amount of time. It was very difficult to procure salt. So we changed our recipes for the pigs. But all of that went on for a fairly short period of time. What we bought abroad, we could already buy in Ukraine locally or vice versa.
At the same time we were reconstructing two new farms, which were to be commissioned in the spring of 2022. We still had to continue this work, but of course we had to change the original plan. So, before we had plans A and B, we may have had to apply plans C and D. And we were able to apply those, and it was very positive, and the work we essentially got done.
At the same time, it was important for us to keep as many jobs as possible. It was important that people were getting paid and doing their part. And that was high on our agenda.
Another example of adapting to the state of war was finding ways to make sure there was enough grain to make feed for the pigs. We used the technology of storing grain in polyethylene bags to expand our storage capacity. In total, we added about 17,000 tons of grain as an additional reserve using this technology.
In December 2022 the Association «Ukranian Pig Breeders» noted that the top 5 Ukrainian pork producers have changed, according to which the company "Goodwelly Ukraine" rose to second place. How did you manage to achieve these results?
Kasper Thorup-Viladsen: We are always proud to be one of the largest pig producers in Ukraine and we are proud to achieve changes. Reaching the second step does not make us very proud, because it is because of the sad history when some of our colleagues in the business had to close their farms. It was not possible to continue operations in eastern and central Ukraine. Some farms were bombed, others were occupied, and that's actually the reason. So, even though we have grown our business, the fact that we have moved into second place is not a positive story for us.
How do you assess the pork market in Ukraine, what changes or trends do you see?
Kasper Thorup-Viladsen: If we look at two sides of the equation, first on the supply side, we see that there are fewer pigs in Ukraine than before, and this is because of the occupation and invasion. Many animals died in the bombings, etc., but it also affected the fact that many farmers could not afford to continue raising pigs because of high feed prices. We see fewer pigs in Ukraine now than we did a year ago, but we also see that the herd will increase again.
If you look at the demand, of course, many Ukrainians have left the country for good reasons. And that obviously means there is less demand in the country as a whole. But we are also seeing changes in demand patterns: many internally displaced people are moving to the western part of Ukraine, which means that demand is quite high in the region where we operate.
Now, with the energy crisis, how do you get out of the situation? How does the lack of electricity affect production and the price for the end consumer in general?
Kasper Thorup-Viladsen: This essentially means that it is now more expensive to produce in Ukraine. At the beginning of the war, we made the decision to import generators in order to sustain ourselves, to keep operating under almost any conditions. We didn't use them for the first 6 months, but starting in October, it became clear that the grid was under a lot of pressure.
So we made the decision to use more generators to reduce the load on the villages near where we are located, which means that the cost of production is increasing for us every day.
We also have to make sure that our colleagues and the villages around us have as much electricity at home as possible. That's why we're working on generators right now. We are also doing this to ensure that production is stable and that the pigs don't feel the crisis and we can produce feed at any time.
We see that pork prices have gone up and this is a general trend for the whole market. The Ukrainian pork market has always been linked to the European market, and because of the difference in exchange rates there, we also see it in the increased local pork prices.
Due to the fuel and energy crisis not only in Ukraine but also in Europe, are there any plans to expand the biogas business?
Kasper Thorup-Viladsen: Obviously there has to be a revolution in the Ukrainian energy market, a general modernization of the Ukrainian infrastructure and energy market, and energy supply is a vital part of that. We expect biogas to become more important in the future and we are interested in looking at these opportunities in the market.
If we talk about grain production, did you manage to harvest on time, did you have to go into winter? What were the biggest problems? What is the yield of the main crops, if you compare across the region or the country?
Kasper Thorup-Viladsen: First of all we were very dependent on diesel fuel. We need to drive in the fields, so fuel is necessary. The supply chain was broken, so we had to make sure we had enough diesel for the whole season. And it was possible and we managed to do it. At the same time, as always, we kept an eye on the weather and got out into the field on time. It was this year we tried to harvest as early as possible. We didn't want to bet on waiting a little longer, so we harvested the grain a little wetter than usual instead of just waiting until everything was perfect.
We had record yields in 2023, and in many crops our numbers exceed the national level: winter barley 6.64 tons/ha, winter wheat 7.4 tons/ha, canola 4.48 tons/ha, soybeans 3.6 tons/ha, corn over 10 tons/ha.
Have winter crops been sown, and if so, what percentage of the total area do they occupy?
Kasper Thorup-Wiladsen: A rather large volume of winter crops is planned for the 2023 season. A total of 59.5% of the crops planted this season are winter crops: wheat, rape and barley. We had a good sowing season, a really good start. There was quite a lot of rain in September and early October, so the second part of the sowing season was quite late. But fortunately, we had pretty mild weather, so the crops developed well over the winter. If we're talking about today, we'd like cold weather and snow. And we are hoping for that in February.
Is the crop rotation changing this spring? If so, give us the reasons. Which crops will you emphasize and why?
Kasper Thorup-Viladsen: We will still focus on our usual crop rotation. We haven't changed anything compared to the surrounding producers. We will continue to stick with the crop rotation that we did before, focusing on five crops as we have done for a long time. All for forage.
In recent years we have planned to increase our presence in growing soybeans, and instead of selling them, we will press our own oil. We will have oil and pulp, and all of that will be used for pig feed.
Have you already calculated how the cost of the planting campaign will change?
Kasper Thorup-Viladsen: Both gullies and winter crops will be more expensive to grow. We see that the price of all inputs, primarily fertilizers and chemicals, has gone up, so overall production will be more expensive, at least in the short term.
Do you feel a shortage of logistical resources: SVRs, fertilizers and the like?
Kasper Thorup-Viladsen: We decided to make purchases as early as possible, so as not to wait until the last minute. Our partners, who had chemicals and fertilizers in stock, provided us with the necessary quantities over the winter, and we are already ready for the spring. Our strategy is to make the necessary preparations on time.
Last year, on the eve of the war, AgroPortal.ua held a conference on sustainable development of enterprises in Ukraine. At that time Goodwill said that the main goal of the company is to become completely CO2-neutral and to be a safe producer. In November Goodwelly was the first in Ukraine to receive an ISCC certificate for soybeans and rapeseed. How urgent is the issue of sustainability for the company in the current environment?
Kasper Thorup-Viladsen: Sustainable production is key for us. We have to make sure we have a product with the smallest possible footprint in all conditions. Whether we grow pigs or soybeans, we want to have the smallest possible footprint. That's why we invest heavily in reducing the electricity, gas and heat that go through our value chains. It's always important to us.
Why soybeans and rapeseed were certified specifically?
Kasper Thorup-Viladsen: We certified it for export possibilities. When the war started, it affected all of Ukraine, and we didn't know if we could sell our crops locally. We prepared for the possibility of exporting. The requirements and regulations for exporting required that certification. In the end, we sold everything locally, but we got the certification done.
Share your experience, how difficult is it to get certification, and what does it require?
Kasper Thorup-Viladsen: It took a little time. It's always harder to get started. It wasn't very difficult, it just took some time. We had GLOBALG.A.P. for many years, so we were a little bit prepared for this certification. We had the paperwork and understanding of what we needed to do, and the whole process took about two months.
Do you continue to implement permanent initiatives in the communities where you lease land? If so, which ones?
Kasper Thorup-Viladsen: The area where we lease land, we see it as a partnership with local villages and people with land, so permanent initiatives are key for us. We will always have a sustainable profile in every village or territorial community that we attract. We will continue to do this and develop it to make people feel more confident.
Among the projects of the past years, we had Zero Waste, where we organize waste collection in our factories and in the villages around us. Last year we sent 1.6 tons of plastic, 10.8 tons of polyethylene/film, 8.9 tons of glass, 5.7 tons of big bags, 5.7 tons of paper, and 2.6 tons of PVC pipes for recycling.
Another of our projects is Recreation Zones, where we make tables and benches from euro-pallets and put them around the villages. In 2022 we had 6 such rest areas made.
In general, in your opinion, what steps does the company need to take to achieve permanence, and what of these have already been implemented by Goodvalley?
Kasper Thorup-Viladsen: Pay attention to your footprint. Try to understand how much energy, how much electricity you consume, how much waste you produce today. Set ambitious goals and be committed to those goals.
Our team has already started the "Save Energy for Ukraine" project. With the proper dedication of the entire team, results can be achieved fairly quickly.
Are you planning investments for 2023? If yes, how much are we talking about and what projects?
Kasper Thorup-Viladsen: We have been working in Ukraine for 19 years and plan to be a part of it for many more years, so we keep investing We have two farms that we have earned, we plan to renovate them in 2023. We have a feed mill that we've taken into operation to continue to invest. These are the main points we want to focus on in the near future.
In addition, further investments are planned, and we have a good investment program ahead of us. We want to invest in agricultural infrastructure (farms, soybean press, feed mill, granaries) and possibly biogas in the future.
PigUA.info by agroportal.ua