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INTERVIEW
New player on the market
ORE ST VOVK, OW N E R AN D CEO OF E N Z YM TALKE D W ITH H I LDEG AR D M. KE I L, E DITO R-I NCH I E F OF BAK I NG+B I SCU IT I NTE R N AT ION AL ABOUT H I S CO M PANY AN D TH E YE A ST MARKE T I N
THE UKRAINE
bbi: Mr. Vovk, your company Enzym, in Lviv, is unknown to many of our readers.
Please introduce your yeast company to us.
+ Vovk: Yeast production has existed for more than 150 years. In
1994, it was passed into private
hands and the ENZYM Corporation was founded. Today, Enzym
is the largest yeast producing
business in the Ukraine and the
former Soviet Union.
However, our business activities
are not just limited to the yeast
business. We also produce bakery
ingredients and improvers and
sell them via our special information center “Bread House” which
also offers consultation services
to bakers.
Added to that, we are also active in the environmental field
and in waste water treatment. We have a project on waste
water treatment using anaerobic and aerobic methods. In
this plant, biogas is produced and biomass is transferred
into mineral fertilizer for agricultural use. Our latest investment is a plant for the production of pet food. With our subsidiary KORMOTECH, we are the only national producer of
dry pet food in the Ukraine.
+
+ bbi: When you became CEO in 1989, the company was
run down and – please excuse my direct language – shabby.
You now claim that your company is state-of-the-art and has
compatible standards with Western and Eastern Europe.
How did you manage to turn things around so quickly after
the privatization in 1994? What milestones did you set for
this development?
+ Vovk: We knew, right from the beginning, that the market
significance we had at that time could only be maintained
based on sound competition. This was not easy. Imported
products had a higher quality and the product range was
much broader. At that time our output was also low.
Therefore, we compiled a modernization program for the
yeast production. We traveled to Western Europe on several
occasions on company business. We wanted to become acquainted with the International Association of Yeast Producers and the Research Institute of the Yeast Industry in
Berlin, Germany, and joining them at a later date was very
important to us.
BAKING+BISCUIT ISSUE 06 2008
We have met many interesting
people from the yeast business;
we have asked many questions;
we have participated in many discussions and received much information. Finally, we decided to
select a consultant for the modernization of the yeast line. Planners, engineers and companies
from Western-Europe and the
Ukraine began the work.
The milestones included: improving the quality, increasing
the output and expanding the
product range. The set-up of a
modern distribution center was
also very important.
+ bbi: Yeast producers, in Western Europe, often complain about
the demanding environmental
conditions which have to be fulfilled and which in turn create high costs. How is this situation in Lviv? How do you
treat your waste water for example?
+ Vovk: We have collected experiences and know-how from
yeast producers from all over the world and quickly discovered that there is no ideal solution. Our goal to increase the
output and the activity of the product inevitably results in
chemically very aggressive waste water.
At the end of the 90s, we recognized that our company
would not be able to succeed without a waste water treatment plant.
So we added waste water treatment to our list of goals to be
achieved. The plant was planned independently from our
output goals. Several companies, consultants and scientific
institutes were involved in this project. The major part of
the technology was finally provided by the Dutch companies Paques and Biothane Systems. The waste water treatment plant will be state-of-the-art with fully automatic operation.
Currently, the product is being put into practice, financed
with our own money. Implementing such a project is long
term as the funds must be taken from the company’s development investment budget. However, it makes sense because,
along with the waste water treatment, we produce biogas
(methane) which will later be used in the production. The
production of biogas is scheduled to reach on average 300
m 3/hour. With this, the company will be able to save about
200 m3 natural gas/hour.
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INTERVIEW
Added to that, we will be able to offer the mineral fertilizer
obtained from the biomass to the agricultural market.
+ bbi: Your yeast production capacity is approximately
90,000 tons annually. How much of this is block yeast, dry
yeast and cream yeast?
+ Vovk: Fresh pressed yeast makes up about 90% of the production; the remaining 10% is either dried or sold as cream
yeast.
+ bbi: Enzym is at home in Lviv, Ukraine. You are market
leader in your country and also deliver your products to
Russia. How important is the Russian market to you? What
position do you hold on the Russian market and what are
your prospects for cooperation in the future under consideration of the political relationship between the Ukraine
and Russia?
+ Vovk: Today, we supply only small quantities to Russia due
to the enormous costs of transportation. However, we have
identified sound opportunities for our company on the Russian market. This was the reason for our first steps towards
production and sale in Russia. Our business is not affected
politically. For centuries, the Ukraine has cohabitated and
cooperated with Russia. Our company has only had positive
experiences in cooperation with Russian companies and we
hope that this will continue in the future.
+ bbi: You know all the suppliers on the baked goods market
in the Ukraine. How do you think this market will develop
in the future? How important are the formerly state-owned
companies, the newly founded enterprises, the bread industry and the craft bakeries?
+ Vovk: The situation on the Ukrainian baked goods market is getting tighter. A consolidation of market forces and
market players will take place. Four or five companies will
survive. They will own several bread factories and pastry
shops and the classification will not follow geographical
principles.
Currently, there seems to be no demand for setting up new
bread factories. The main investments are being put into the
modernization of existing companies.
Small and medium-sized bakeries and pastry shops will remain. But their only chance for survival is to maintain tradition and use traditional recipes.
Enzym based in Lviv, Ukraine, is the first independent yeast producer
from Eastern Europe active on the market in Western Europe
Orest Vovk is General Manager and Owner of JSC
“Enzym” in Lviv. He claims that his company is
market leader in baker’s yeast in the Ukraine and the
former Soviet Union. In the past five years, Vovk (60) has
also exported his products into Turkey, the Czech Republic, Hungary and Moldavia as well as into the Baltic
States. In Western Europe, he predominately targets the
markets in Belgium, Luxemburg and the Netherlands as
well as in Germany.
The company was founded by a local brewery in 1922 as
Lysynytska Fabryka Presovanych Drozdzy I Spyrtu S.A.
(Lviv Company for the production of pressed yeast and
alcohol) in cooperation with the Austrian yeast producer,
Mautner-Markhof. In 1939, the
company was placed under state
control. Its roots date back to
1945 and it has exclusively
focused on the production
of baker’s yeast.
+
BAKING+BISCUIT ISSUE 06 2008
In 1989, Orest Vovk assumed the general management of
the company which, at that time, was managed according
to the principles of the planned economy. It was privatized in 1994 by the Ukraine, then an independent state.
The 400 staff members of the former collective received
ownership certificates which Vovk took over in the following years. Now, he is the sole owner and according to
him the largest tax payer in the region.
In 1996, Vovk started the first dried yeast production in
the Ukraine and in 1997 the yeast production facility was
completely modernized and automated. The company is
now equipped with lines and equipment from Germany,
Switzerland, the Netherlands, the UK and Sweden. It is
certified according to ISO 9001-2001. Production processes, storage and shipping are controlled by computer
systems. Today, the Lviv Company produces pressed yeast
and dried yeast of varying qualities. The annual output
in 2005 was 42,000 tons. In 2006, Vovk began setting up
a division for bakery ingredients and premixes. +++
INTERVIEW
+ bbi: The Central European markets from the Baltic States
to all the former crown lands of Austria-Hungary are right
at your doorstep. How strong is your presence on these markets, for example in Poland?
+ Vovk: The yeast markets in Poland, the Czech Republic,
Slovakia, Bulgaria, where we are present, are highly complicated. Competition is stiff and there is no room to make a
mistake. It is difficult for a supplier from the Ukraine to enter these markets. People still associate us with the old stereotype of the Soviet Union. Products from the Ukraine are
mistrusted. We are concentrating, on a daily basis, to overcome this barrier of suspiciousness.
To achieve this, quality must be high, logistics must function
properly and all accompanying documents must be impeccable. In our export department, we have a special section
equipped with young experts fluent in foreign languages
and with a certain understanding of the Western European
mentality.
Our strategy of market presence is not to focus on volume.
We are not striving for a large market share. For us, it is important to be present in several countries along with our
competitors. We are ready for competition and for displaying our standards.
al and national suppliers. You have been offering your yeast
for some time now in Germany, the Netherlands and Belgium. Why are these markets so tempting for you?
+ Vovk: These markets require top quality and first and
foremost of a uniformly high quality on a long-term basis.
Therefore, in this way, these markets are virtually feeding
our ambitions. For example, we have introduced the international standard ISO 22000 for quality and food safety because of requests from our customers.
+ bbi: What are your advantages compared to the other suppliers on these markets?
+ Vovk: First of all, the guaranteed quality and safety of our
products. Our products are produced from natural raw materials. In modern terms you could also call them “organic”.
Another advantage could also be our price-performance ratio.
+ bbi: In 2018, you will be 70. What would you like to look
back on when you consider your achievements?
+ Vovk: First of all, I would like to successfully complete the
set-up of my family business. This includes the yeast production as well as the pet food section. Then, I will pass it on
as my heritage and, of course, will prepare and familiarize a
respective successor.
+ bbi: The yeast market in Western Europe is dominated by
two large suppliers. There are also a number of small region-
T
+ bbi: Mr. Vovk, thank you for the interview. +++
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