Today, we are talking with Nataliia Kulakovska, Marketing Director of KMZ Industries and alumni of Export Academy in Ukraine 2022-2023 (Visionest Institute) to understand more about the export way of this company and the role of Export Academy.
KMZ Industries, one of the largest manufacturers of grain elevator equipment in Ukraine, has been a key player in the agricultural industry for over 160 years. Their modern approach sets them apart, especially in a country where many old concrete grain silos still exist. KMZ Industries specializes in producing state-of-the-art metal silos, grain dryers, separators, and other essential equipment. They also handle installation and automation, providing a complete “turnkey” solution for elevators.
In 2012, KMZ Industries acquired the assets of a renowned British elevator equipment manufacturer, Brice-Baker, and brought their expertise to Ukraine. Then, in 2021, they joined forces with colleagues from Variant Agro Build in Kharkiv, further solidifying their position as the most powerful Ukrainian manufacturer in this field.
Located in Karlivka, Poltava Oblast, their production facilities have the capacity to manufacture equipment for storing 2 million tons of grain annually. To put this volume into perspective for those unfamiliar with agriculture, Ukraine had a total grain storage capacity of 50 million tons just before the war.
Over the past seven years (from 2014 to 2021), KMZ Industries has significantly increased its market share in Ukraine. Their contributions have been instrumental in shaping the domestic elevator equipment industry. Without exaggeration, it’s safe to say that all Ukrainian farmers are well aware of KMZ Industries’ reputation and capabilities.
– Natalia, thank you for taking time for the interview with us. We are really proud that you are our alumni and are so happy to share your export experiance with others. So, lets start fisrtly with your company’s export experience.
– Since its inception, KMZ Industries has been at the forefront of exporting grain elevator equipment. The company’s legal and historical name, Karlivka Machine-Building Plant, traces back to 1981 when it embarked on its first international shipments. Notably, that year saw exports of 11 grain dryers, 16 flour silos, 2 bucket elevators, and other essential elevator machinery.
Following the dissolution of the Soviet Union, KMZ Industries expanded its export geography to include all former republics. During the 2000s, the plant primarily collaborated with Poland and Lithuania. However, since 2012, there has been no cooperation with Russia.
A significant milestone occurred in 2019 when KMZ Industries became the first Ukrainian manufacturer of elevator equipment to execute a comprehensive delivery to the European Union. In general, among the foreign countries to which KMZ Industries equipment has been supplied recently are: Germany, Romania, Moldova, Bulgaria, Belarus (until 2022) and Kazakhstan, the Baltic States (in particular, Latvia and Estonia) and South Africa.
In recent years, Romania has been the undisputed leader in our exports. In the years before the war, KMZ Industries supplied equipment for four different facilities, including a new fish feed plant and a large poultry farm.
Of course, we have seen a big decline in exports since 2022, just like all manufacturers of agricultural machinery and equipment. Foreign customers are afraid of military risks and refrain from ordering Ukrainian equipment. However, I would like to mention Romania, which resumed orders at the beginning of last summer and has not lost momentum since then. Perhaps everything in our lives depends on people and their attitude to circumstances and affairs.
– Which countries were the most difficult to enter and why? What difficulties can you encounter abroad when building an elevator?
– Based on our estimates and experience, the most difficult areas are African countries. They are promising customers, as they have a significant market capacity that is very interesting to us. However, the working conditions, I would say, the specifics of finding reliable partners and risk assessment currently make this region “limitedly attractive”. You know, like a dream that may or may not come true 🙂 When we talk about building an elevator, we need to keep in mind that usually one company/one manufacturer does not cover all the needs of a client for services and products. And when we talk about export contracts, the specifics of working in each local market come to the fore. For example, the first thing you need to build an elevator is permits. Each country has its own requirements for obtaining a building permit, and it takes a lot of time and the help of local consultants to work out all the nuances. In this regard, we are looking for local partners who know the market, clients, local requirements, and have the relevant permits and licences. This is a mutually beneficial cooperation for both parties: everyone is responsible for their part of the deal.
The second factor to take into account is who will install your equipment if it is not exported as a complete set. The lack of qualified installers, who need at least 40-50 people to build an elevator, can significantly affect the feasibility of the project. And everyone needs to obtain a work permit, pay for a flight, accommodation, etc. If Ukrainian installers are involved, the cost of installation can reach 50% of the cost of the equipment. That is why, even before the full-scale invasion, we preferred to consider cooperation with a local contractor in our export proposals (this will allow the customer to save a lot of money and we will avoid a lot of additional tasks). And now it’s even more so: part of our team is in the Armed Forces, and the other works on local projects. And these are just two of the factors. We hope that right now, manufacturers of agricultural equipment and machinery will unite and create the preconditions for joint entry into “distant” but attractive markets.
– How do you assess the impact of the Export Academy programme on your business and its international activities?
– We are not new to exporting, but we are not an export-oriented company yet. Therefore, participation in the Export Academy was, first of all, an opportunity to abstract our experience and try to imagine exporting from scratch: analysing the product, promising markets, answering honestly to the questions of SWOT analysis and doing a PESTLE analysis for the chosen market; reviewing alternative export strategies, etc. Of course, all this is done in the current work, but when we all have to go beyond the “bubble”, look for new tools and listen to colleagues or those who have extensive export experience. It is this kind of work, built on experience and new knowledge, that, in my opinion, gives the desired results. Sometimes it is important to see what can be improved. Sometimes you need to praise yourself for being right. With the programme in mind, we have already started to adjust our export activities. This is a long term work due to the specifics of the product (long sales leverage), but we hope to see the first optimistic results in nearest future.
– What specific skills and knowledge were most useful for you and your company during the programme?
– I am delighted with the tools provided to analyse possible markets. In my opinion, this was the most useful thing. I can honestly say that I have never seen such a powerful pool of analytical information in any of my previous training courses in any area, and it is also up-to-date.
– Does the Export Academy alumni network play a role in your business?How do you use these connections and the community to develop your business?
– Usually networking – people – is one of the main objectives when we choose to study for ourselves. At least in our adult life. Because those will be the people with whom you will move forward together, whose development will be yours as well.The best thing in our case is that the Export Academy alumni community includes not only graduates of our stream. There are several cohorts. Moreover, there are our consultants among us, who have extensive practical experience in advising on the export activities of Ukrainian companies. To be honest, it was the Visionest Networking Community that was a discovery for me. So far, it is the only one where I can see the activity of its members. It is not dead. Here, people really point their pains, and most importantly, they get quick answers based on the experience of the participants. No one here is waiting for an action plan. You come here with something that hurts and get a prescription. Here, people share sincerely and generously if a colleague needs it. This is worth a lot.
– How did the Export Academy programme help you understand the peculiarities of international markets and interact effectively with partners from other countries?
It so happened that simultaneously with the Export Academy, I was learning about cross-cultural communication from three other different areas. I could see practical confirmation of what I had read, listened to, or studied on my own. And that made it even more interesting. At some point, I had the feeling that I was digging up a treasure that gets richer the deeper you dig.
And when at the end of the programme I received two books on this very topic as a gift: The Compass of Values by Mandeep Rai and The Cultural Map by Erin Meyer, it became even more interesting. According to the first book, the most important value of Ukrainians is freedom, but you must admit that this is definitely not news to us. But the second one did not show Ukraine’s location on 8 scales, so I had to draw it myself. I came up with the result that we are closest to the Americans and the British. But I have to make a reservation that this was my own feeling, not supported by any research. And of course, I could be wrong, because my bubble is my bubble, not a representative sample. Because on several value scales, my position and that of Ukrainian society as a whole were somewhat different, and I understood that.
As the saying goes, the further the merrier. When you realise how different you are, you become more and more convinced that exporting to one market will be different from another. Even if the countries are geographically close. It’s not about numbers, it’s about people. And you have to accept that.
– Which educational module of the programme was the biggest discovery for you and why (if any)
I can’t choose between the two: Finding a market for export and Choosing an entry strategy. How difficult it is to find up-to-date and diverse statistics for our local market – and how extensive the open information on foreign markets is. I was delighted with this volume of figures that can be used to draw conclusions. Of course, local partners will be involved at the preparatory level, but it is extremely important to come to them already prepared, having done your homework. You know, it even seemed to me that if we had had the opportunity to work with all these resources 25 years ago, the direction I would have been working in would have been different.
– What recommendations and advice could you give to current Export Academy participants to make the most of this experience for the successful development of their business?
There are probably several such tips. First, don’t miss anything. Do your homework, take part in all the workshops. Secondly, work on the real tasks of your company. You won’t reveal any trade secrets to the outside world, and only you know the disadvantages of your company – so be honest with yourself when you’re working on a project. Because in the end, you will not have an imaginary project of an imaginary company, but one that will help yours right away. Third, remember about networking. Use all the tools offered by the programme. Be active: it will benefit you, your company, and your colleagues.
Be generous in sharing your experience, thoughts, and best practices. Believe me, it will be repaid a hundredfold.
