Successful development of agro-industrial complex of any country in a large extent depends on the government. As well agricultural branch consists of the enterprises of different scale, the authorities are to consider the interests of both - large holdings and small farms. In this context, Sergiy Kasianov, Chairman of the Board of Directors at KSG Agro group, who has been the direct participant of development of the agrarian and industrial complex of Ukraine, told about the matching of real facts to the required ones in his interview to APK-Inform Agency.
- Sergiy Pavlovich, You started Your business activity with household chemicals (firstly imports, and then production). How and when did You come to the agrarian sphere? Why did You choose agriculture?
My decision to be engaged in agriculture has been connected with the fact that in 2002 I have been elected as the deputy on the 37th majority district where, generally prevailed the rural areas, and, respectively, - rural voters. It was necessary to understand how do people live, work and earn there. Thus, I also decided "to enter the river" – I have bought one farm, and so my agricultural activity has begun. It was crop husbandry with land bank of 5 thsd ha in Apostolovsky raion.
In the sphere of household chemicals a certain result has also been achieved: it has been created such a business that was highly estimated and took the leader positions in the market. It was sold.
- For the years of Your activity the agro-industrial complex of Ukraine was changing and developing. Can You please, remember the main positive and negative moments? How did these changes influence the policy and work of KSG Agro?
The agro-industrial complex has always been one of the key branches for each government. Everyone understands that a great number of voters live in rural areas. On the other hand, it was always clear that it is an export-oriented branch which can bring currency to the country. Of course, it wasn’t on the first place ceding it to metallurgy, chemistry, however the attitude towards was always serious. In particular, it was expressed in another taxation to be applied to agricultural producers, there were always some privileges for landowners. Also, there was a system of state support, and the government annually put means in budgets by which supported agrarians. First of all, there were various programs both in livestock and crop production concerning the construction and reconstruction, work with a breeding livestock, seeding material, irrigation systems. There were certain programs practically for all sectors helping the agricultural companies and farmers to develop more effectively. Recently the situation has changed, the landowners were transferred to the general form of the taxation, and there are actually no privileges for them now. The grants in some volume have remained and, it seems, even became more transparent. We were surprised when in July 2017 we have received grants from the VAT which has been paid by our livestock enterprise in June. This sum was approximately equal to the previous VAT payment.
It was very unexpected for us as earlier we had to sign huge amount of papers, to nurse, elicit to get some grants. And for the last time it was in an European way: we have only registered and nothing actually to do, everything has worked automatically. There is no great number of officials who influence, distribute who were necessarily to agree with, spend your time, forces for some thanks.
- Would You tell us about the structure of Your company?
Today the structure of KSG Agro includes nearly 30 enterprises, engaging in crop production, processing, and the meat-production plants and livestock enterprises producing pork and milk. At the initial stage the holding was engaged only in crop production. Increasing production of grain, we have begun to carry out the deliveries into foreign markets, as the global market - is the market of currency. When have decided to develop also in the direction of livestock production, there was a need to provide livestock complexes with feed. Today a considerable part of the received crops goes for processing. The livestock of live pigs is realised generally on domestic market. Thus, in 2016 we sold 6.4 thsd heads per month. This year we are planning to increase this indicator to 9-10 thsd heads of pigs per month.
- Share us please, the results of crop harvesting. How did the weather patterns affect a harvest?
The summer of this year did really was unstable due to the weather conditions. Nevertheless, the results of grain harvest have pleased us. In the section of agricultural crops, we have received more than 23 thsd tonnes of the winter wheat which were planted throughout 7.7 thsd ha. The barley has been harvested at the volume of 7.4 thsd tonnes from the area of 2.6 thsd ha. The planted areas under rye totaled 140 ha, with the harvest at 360 tonnes. The total volume of rapeseed crop consisted 460 tonnes from the areas of 350 ha. The harvesting campaign of sunflower seed has also begun in many farmlands and shortly will start the corn harvesting campaign. Despite weather conditions, we managed to achieve good results, first of all, thanks to the staff professionalism of holdings and also due to use of modern agricultural machinery.
– What areas in the current year are provided for corn?
The corn planted areas totaled 1.05 thsd ha in farmlands. The harvest still hasn’t begun because of high humidity of the crop – 18.7% in some places compared with norm of 14.5%. Therefore, we are waiting when the humidity decrease to begin the field works. The average yield is projected to be at the level of 4 t/ha.
– Rather big share in the structure of crop planted areas is taken away under sunflower seed. What can You tell about quality of the crop in farms of KSG Agro?
The planted areas under sunflower seed in 2017 totaled 16.5 thsd ha and agrarians in some fields have already started harvesting. At this moment, the average yield totals nearly 1.7-2 t/ha which corresponds with the expected 1.8 t/ha. Of course, the problems with sunflower seed this year do exist in face of difficult weather conditions: some plants "have burned slightly" on the fields where the lack of moisture was observed.
– Do You plan to change the structure of crop planted areas of the 2018-eve harvest? Have Your farmers started planting winter crops?
Yes, the winter crops planting works of the new harvest has already begun. As of early September, the planted areas under winter rapeseed reached nearly 4 thsd ha, with the planned areas at 4.6 thsd ha. After September 10 the start of winter wheat planting is planned with cultivated area at nearly 6.2 thsd ha. Concerning structure of planting areas I may add that next year we intend to change it a little. We will enlarge the planted areas under rapeseed at the expanse of sunflower seed areas. Besides, we are planning to enter into a crop rotation of a new crop – grain sorghum.
- Recently KSG Agro has actively begun investing in development of alternative power engineering. How have You come to this sphere?
Four years ago we rejected the Russian gas. While modernizing and reconstructing pig factory farm, "were cut off" from gas and have put pelletny coppers. They have been working for four years already that allowed us to lower significantly expenses and not depend on any services. Further, cooperating with local bulks and knowing about their needs (as they used inefficient old boiler rooms), we have met requirements of them. Last year it was organized a new enterprise which, making use of our experience, established a pelletny boiler room in New Pokrovsk raion. This year we are planning to finish the installation of five boiler rooms in five schools and to start up qualitative heat at lower price. We are working in this direction only in Dnipropetrovsk oblast where have our business activity. Thus, at the moment we don't plan to go beyond it’s framework as there is still a large number of objects where it is possible to apply alternative fuel.
– At what stage of the work did You decide to open KSG Bank? What is the main reason of Your unsuccessful business activity? Do You have some ideas to repeat an attempt?
At a certain phase of the work it was taken a decision to cooperate with bank which was in a troubled position. KSG Bank has stopped it’s functioning in view of the illegal decision of National bank of August 31 of last year. I consider the policy of National Bank on small banks destruction to be wrong. The place in the market is for everyone.
- KSG Agro is the company which is located on the Dnieper river. Do You plan to develop the river logistics?
River logistics – is a good deal. I hold with a high regard and esteem to the Nibulon company which develops this direction. I consider it to be very correct and favorable decision. If necessary, we will use the services of river logisticians, especially if it is more convenient, profitable and cheaper. But just - for services.
- How does the situation with African swine fever influence the deliveries of Your products on foreign markets?
Of course, it exerts negative impact. Today we carry out shipments of pork only to Georgia which also threatens to close the entry into it’s market. The government shouldn’t be so passive in the question of biosafety. Such a rampage of the virus as in the current season has never been earlier. The number of the recorded flashes in 20 oblasts of Ukraine demonstrates total absence of the veterinary control system in the country. The costs of biosafety ensuring in our company grow in a geometrical progression. We do and we will do everything that depends on us to ensure top-level safety.
- In July the government adopted the resolution that small farmers with net income from the products selling to 10 mln UAH and also farmers who carry out livestock farming of cattle, will be able to receive compensation of loans at discount rate of the National Bank. In Your opinion, how effectively will it work?
Let us see how it will be implemented. Such resolutions were accepted very often, but there were no funds for their implementation. People did their work, fixed, drew up statements, and received nothing as a result. Therefore, we will hope that the adopted resolution will work as effectively as the export grant on return of the VAT.
- How can You comment on urgent acceptance of the land reform in Ukraine?
Generally speaking, the land reform is a good and necessary deal but only not in the short term and with good preparation. If it will be in a hurry – than the next time we will step on a rake and will be hit on a forehead. We aren't ready to acceptance of this reform now at all. And in general, if it is normally to be prepared, to allocate accurately a position of the state, the national bank and all market participants, then of course it needs to be done. But no way with a period of yesterday.
- And in conclusion of our conversation tell us please about the plans of the company for the nearest future.
The plans are transparent and clear: to finish harvesting successfully, to increase the number of pigs sales to 10 thsd heads monthly and in the fall – to bring to the end all our projects on boiler rooms construction in Dnipropetrovsk oblast, and further – the winter crops planting campaign, and so by the way side…
Interviewed by Julia Shevchenko, APK-Inform Agency
