During the 19 years of its own success story, Kormotech managed to survive at least four large-scale upheavals: the currency crisis of 2008, the deployment of russian armed aggression, the pandemic, and the beginning of a full-scale war. At the same time, the company continues to develop rapidly. Other pet food industry players from different countries noted that with delight.
During the Nordic Petfood Conference in Spain Ulyana Fitsa, Chief Supply Chain and Logistics Officer of Kormotech, told what helps Ukrainian family businesses to overcome challenges and emerge from crises stronger.
Start point — February 24
For the world, 2022 is about food and energy crises and missile attacks in the center of Europe.
The pet food market players are experiencing a shortage and blockage of raw materials, logistical difficulties, and an increase in the cost of products.
Kormotech had an action plan for every business challenge. The company has developed the ability to find solutions quickly, adapt, and work in conditions of uncertainty.
As a result of russian aggression, the Ukrainian cat and dog pet food market was particularly affected. Food for pets is one of the essential products. Kormotech has factories in Ukraine and Lithuania. The company's production facilities in the Lviv region did not work in the first week after the start of the full-scale invasion of the russians. We did it for the safety and operational development of a new approach to work. Replanning made it possible to save jobs, pay taxes and provide products to stakeholders.
Destruction of infrastructure, closed shops, and mass evacuation — about 60% of the pet food market was paralyzed in the first days of the war. The impossibility of delivering goods by sea greatly complicated the work. Logistics across the country worked with interruptions. To produce enough products and deliver them on time, it was necessary to accumulate stocks of raw materials. At the same time, Kormotech refused to cooperate with belarus, even though it was the largest export market. Just as in 2014, the company lost 30% of the domestic market and left Russia forever.
To accelerate and be effective in the conditions of a great war and global challenges, Kormotech formed three strategic teams. The first is responsible for providing the domestic market with a product. The second is to strengthen its presence in export markets. A third launched a global chain to help pets suffering from war. This is an initiative of Save Pets of Ukraine. The team identifies the problems of pet owners, volunteers and shelters, and attracts funding from the EU, and fully converts it into humanitarian aid. Even delivered humanitarian goods to cities under fire. Today, about 150,000 dogs and cats are on the verge of survival in Ukraine.
Uncertainty as a lifestyle
War is total uncertainty, but Kormotech has long practiced this as a corporate mindset and works with challenges accordingly.
Global Supply Chain Team focuses on the greatest efficiency with the lowest resource costs. For the R&D department responsible for development and innovation, uncertainty is a field of research. Here, new and new raw materials are constantly being studied to obtain the best quality.
During the war, these two teams united and ran the company. R&D responds to new requests within 24 hours from the appearance of the problem to the solution. It is how recipes from alternative raw materials are born.
At the beginning of April, Kormotech went into system work and even fulfilled the sales plan. And to work without interruption, they developed their raw material base. The company manufactures the entire pre-war range of 650 items.
Attracting the best players in the industry is crucial because, in constant uncertainty, only such achieve business success. Regarding suppliers, priority is given to local producers. These are faster deliveries and, accordingly, freshness and price. The condition is that they must meet the highest standards. Kormotech is used to playing the long game: the company builds close cooperation with partners and helps them grow together.
The company simultaneously creates products under its brands in different segments: super premium (Optimeal), premium (Club 4 Paws), and standard. Food under private brands is also produced to order - for example, for supermarket chains in different countries.
Constantly researching consumer needs and improving products, Kormotech is transforming into a marketing and manufacturing company. Brand managers work on new products with our research & development department (R&D), full-time nutritionists and veterinarians.
The goal is healthy, happy pets in 33 countries around the world.
The pet care industry is a highly competitive market. The dynamics of Kormotech's development are confirmed by the willingness of foreign distributors, even despite the war, to expand the line of representation of the Ukrainian product.
These opportunities cannot be neglected. Kormotech works for Ukraine's global brand, and the country's image strengthens the company. Previously, it took years to gain trust in Ukrainian businesses. Now the world is ready to cooperate.
The goal for next year is to increase production capacity. The challenge is inflation in Europe and the USA. However, the team continues to present new products of its brands at global industry events to strengthen its credibility on the global stage.
Together with other pet care exporting companies, Kormotech joined the Ukrainian Pet Alliance to strengthen its presence worldwide.