Green Team is the biggest horticultural company in the Ukraine. The enterprise has had 40 million dollars of investment by a group of London based investors who have seen the huge potential in the country. Green Team based in Kakhovka, Kherson region in southern Ukraine has the biggest cold storage facility under one roof in Europe. This state of the art facility can store 50,000 tonnes of produce.
Ukraine, although not in the EU, has been granted free borders, meaning there are no duties for imports/exports of goods. The country has 33 million ha of irrigable land. The Green Team owns 1000 ha to produce crops such as carrots, onions and cabbage and beetroot.
Colin Galbraith spoke to FreshPlaza about the history of the region and his new advisory role with Green Team. "Historically Ukraine was known as the bread basket of Eastern Europe. When it was part of USSR they built an amazing irrigation and dam system in the Kherson region using water from the Dnjepr river. There are more than 400km waterways which supply water to the area and are free to use, the system is extremely well built and solid. The Ukraine also has a great climate for growing as it is warm and quite dry and only has a two week winter when temperatures can drop rapidly. The Kherson region lies at the same latitude as the south of France."
40,000 ha with trickle irrigation
Colin explains that if Ukraine can further develop their agriculture, they could come in at such a volume where they would dominate Europe. Ukraine has learned, just like other Eastern European countries that they cannot rely on single markets, for example Russia, and need to seek new ones, but the potential in Ukraine means that if relations with Russia do recover then they have easily the capacity to supply both markets.
Green Team are looking mainly at the export market, they do supply the domestic market which is around 45 million people, but that market is not fully developed as far as retail is concerned and the local markets are still the best place to buy fresh produce.
"Green Team intends to grow field crops to supply the quality end of the market, the cost of production is very low, at the moment is will be mainly onions and carrots but there are all sorts of possibilities, no one quite knows what can be grown successfully yet, different types of fruit as well as vegetables are a strong possibility, we will have work out what is viable here."
What makes the production costs so low? To compare with the UK, where it costs £40 per acre to irrigate, water is very inexpensive in the Ukraine. Labour costs £10 per hour in the UK while it is just £1 in Ukraine.
Importation of seed is one big cost as it on level with the rest of EU and priced in hard currency.
"The scale of the land available in the region is huge and the soil is incredibly fertile," according to Colin. "Yields are good, weed control is easy due to the light soil."
"Peeled onions is a product which going to launched, this is feasible due to the low labour costs and they can easily be shipped out to mainland Europe. Green Team is not only looking west but also to markets such as Dubai and UAE, as well as Jordan, Georgia.
"It will be a case of easing into different markets to see what works, we won't be trying to compete with Dutch growers who mass produce products such as tomatoes and onions, we can't compete with them, it is a question of distance from the market, we are just too far away. We will be looking more at the niche market with high quality products."
"The EU is encouraging Ukraine into Europe by taking down the borders, costs are increasing everywhere in Europe and countries like Poland and Bulgaria are getting more expensive and suddenly there is this country with only £1 an hour labour."
Green Team was up and running before the present political situation came about and although some changes have had to be made to their strategy, the plans will go a head and any future changes in the political situation will have to be managed, but it is not seen as a major factor in the overall project.
A partnership has been set up between Green Team and Moorhouse and Mohan who have offices in both the UK and The Netherlands, to look at the marketing side in Europe. Moorhouse & Mohan have many years experience in marketing produce on the European market.
Colin is Sales and Marketing Director at the company and said that the two roles will work very well together. "Moorhouse & Mohan will help with finding the right markets within Europe, our advantage is the connections which we already have here. We are working on the accreditations at the moment, some growers still need to be GlobalGap certified and of course you need the BRC accreditation for the retailers, especially in the UK. The customers will be in retail, food service and fresh processing. This is a very exiting time for Green Team, myself and Moorhouse and Mohan."
For more information:
C
olin GalbraithMoorehouse & Mohan
Tel: +44 1354 602860
Email: colin@moorhousemohan.co.uk
www.moorhouseandmohan.com