MEDA in the News

New F&V platform for Ukrainian greenhouse veg growers

As published on Fresh Plaza, by Andrii Chornyi

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It took just over 4 months to reconstruct an old Soviet-era motor transport enterprise into the first stage of a logistics center, capable of receiving and processing up to 80 tons of vegetables a day. The facility makes it possible for small and medium greenhouse producers to bring their vegetables to be sorted, packaged, palletized and, most importantly, quickly cooled to a temperature of 5˚С in order to preserve the proper quality required by the market (exports in particular), extend shelf life and transport fresh F&V without losses.

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This first F&V platform for the Zaporizhia region in Ukraine, was launched last Friday, 22 September, 2017. The new facility, was built and equipped by private entrepreneur, Andrii Chornyi, with the financial support of the Ukraine Horticulture Business-Development Project (UHBDP). UHBDP has been implemented in Ukraine since 2014, funded by Global Affairs Canada, co-financed and implemented by Mennonite Economic Development Associates (MEDA).

According to official data, the plastic greenhouses in the Zaporizhia region are estimated to produce  around 500,000 tons of vegetables (mostly tomatoes and cucumbers) on 2,000 ha.

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"Our Project UHBDP is designed to support precisely such enterprises and their access to markets with high added value. The success story of enterprises that are similar to ours creates a big direct impact on the huge number of SHF&SME`s in the South of Ukraine."  shared Sergii Potapov, Value Chain Manager for the project.

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Simpler days when trading with Russia
Prior to the Russian embargo in 2014, the Russian market was the main destination for the supply of greenhouse vegetables from the Zaporizhia region in Ukraine. Approximately 33-36% of total production (all of which were class A) went to the Russian market in the simplest packaging, sometimes even in ordinary banana boxes. The Russian purchasers were 'welcomed guests', but this practice only allowed an increase in the area of film greenhouses in the region every year, and production volumes increased without changing the infrastructure.

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The remaining goods, around 60%, were sold on the domestic market, mainly in Donetsk and Lugansk regions and Autonomous Republic of Crimea. The war in Donetsk and Lugansk regions (in the recent past the most densely populated regions of Ukraine) created a new challenge for small and medium-sized farmers not only in Kamenka-Dnieper region, but for all regions of South of Ukraine.

"Today, Belarus, which is seen as the gateway to Russia (despite the ban) remains the largest export market for Ukrainian tomatoes and cucumbers. It's hard to say how much fresh tomato, cucumber and pepper left the country this season, but local experts estimate the volume to be 50-60 thousand tons," said Sergii.

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Traders had tried to start more exports to the Baltic States, Poland, Romania and Moldova, but were passed over for 'regular' European suppliers after there were problems with quality, (including a glued cardboard box). However, some deliveries were sent to Poland last spring during Easter for the Orthodox Church.

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Sergii continued, "The rest of production volume will be sold on the domestic market, however, we don't have the statistics of the total amounts for this season. Where we ended up selling our vegetables this year was largely dependent on the weather situations around the country, as many regions were affected by late frosts in April and extremely hot weather in July and August."

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"Andrey's project is an opportunity to turn the current situation where our export destinations are changing from Russia, and other former USSR countries, to entering new European markets. He has a passion for what he does and doesn't get into 'price wars' at the raw material level because he believes that it is important to look at the bigger pictures and take a long term profit in the future instead of a quick turnover." concludes Sergii.