The Ukrainian Farmer
During 30 years of existence, FEERUM, from a small producer of grain storage devices, has grown into a powerful world-class player. Working with Ukrainian clients who, unlike Polish farmers, needed greater efficiency and faster construction and assembly works, gave a significant impulse to development. We talked about the development of the company with its founder and president of the board, Daniel Janusz.
FARMER: Please tell us how it all started and how was it possible to achieve the current state of the company?
I started my business 20 years ago, in 4 years I managed to buy a production plant and since then I have specialized in the production of grain storage equipment. In the same year, we started selling equipment to Ukraine – we installed a dryer for Pan Kurczak in Lutsk. Then we continued selling the dryer, and in the next 2 years we signed the first contract for the supply of equipment for the facility for 50,000 tons of simultaneous storage with Agroprodservice. The company is still operating successfully and its owner is fully satisfied with our cooperation. It was from this facility that the sale of equipment to large Ukrainian enterprises began.
I quickly realized that our capabilities were not enough to fulfill large orders. That is why we entered the Warsaw Stock Exchange, and until now 30% of the company’s shares belong to various financial institutions. We invested the money in the construction of a new plant and warehouse, production automation and computer control systems. The company’s capacity grew to a level where we were able to process 25-30 thousand. tons of metal per year. All this made it possible to start the construction of the most powerful facilities in the world.
The plant covers 12 ha, of which 3.5 ha are production plants. The company also has its own 25,000 ton elevator in which all technological solutions are tested before being put into serial production. In addition to drying rooms and silos, we produce transport equipment, provide a computer control system for the facility and service. This means that we are fully responsible for the operation of the elevators we produce.
What can FEERUM be of interest to Ukrainian farmers?
Currently, supply chains have been interrupted in the world, which significantly complicates the work. In Poland, there is an export support program, and we, as a producer, can receive money from a Polish bank and at the same time insure transactions with KUKE (Export Credit Insurance Corporation). Thanks to this, we can provide our clients with financing up to 5 years in the amount of 10-12% for the entire period. At the same time, we get a guarantee from the insurance company that we will not run out of money, even if suddenly the client is not able to pay. This service appeared very early, at the time of concluding contracts with Epicentr K, thanks to which we were able to offer favorable terms of cooperation for the construction of large facilities.
What are the main challenges for companies like you today?
We are witnessing a violent climate crisis – many countries suffer from droughts, excessive rainfall and hurricane winds, which have a significant impact on food prices in world markets. The economic war between China and the United States also adds instability, it worsens the situation. As a result, cereal prices increased and led to an increase in the prices of other raw materials. The price of metal doubled, which must have influenced the cost of equipping the elevators. On the other hand, farmers’ incomes have also increased, and if the price of maize remains at $ 200 / tonne, they will be able to earn money quickly for their own facility, create their own processing businesses, and thus take a leading position in the ranking of global food suppliers.
Where is it more difficult to build objects: in Ukraine or in Europe?
It is better for us to build in Ukraine. Local customers count on the fastest return on investment. Therefore, here construction and assembly are carried out both day and night and even on weekends. Nowhere in Europe is work done this way. We have a large investment in Tanzania for 200,000 tons of simultaneous storage, which has been under construction for the sixth year. And with Epicentrum we have a completely different example. In 2018, we met with Aleksander Gerega, a month later we signed a contract and during the year we built facilities with a capacity of 750 thousand. tons. There are few places in the world where construction is going this fast.
Please list the advantages of FEERUM equipment
The main advantage is that we make all the elements of the facility. We even make our own chains for conveyors. The full production cycle allows us to be more efficient than our competitors. In today’s environment, other manufacturers face a shortage of raw materials or certain components, which disrupts lead times. The commissioning of the facilities is postponed to the next season and this is an avoidable loss. We design, manufacture, and have the ability to fully equip facilities with everything that is needed – from metal structures, through media and automation. Testing your equipment on your own elevator also adds value to our products. To this you can add financing and relative geographic proximity – all this makes cooperation with us convenient and profitable. Our service specialists and installers work in Ukraine, so there is no need to wait for someone to leave Poland to solve a technical problem.
What prospects do you see in the construction of new facilities in Ukraine in the coming years?
Currently, the total production of cereals in Ukraine is around 75 million tons per year. However, it is possible to double this number in the future. It cannot be done without infrastructure. And there are railway lines and ports in Ukraine, all that remains is to increase the capacity of the elevators to such a level that trucks will not stand in queues. This will be the main task of the agricultural sector for the next 5-10 years. It should also be remembered that the share of maize will gradually increase, and this cultivation requires more processing and storage capacity.
What objects are desired – large or small?
When the first hypermarkets were opened in Poland, it was expected that they would capture the entire market. However, over time, medium and small ones appeared – they also found their niche. And it’s not about size, but how quickly you make money. It is the same with farmers. Small agricultural enterprises need more time to collect the necessary funds for the construction of the facility, so later they buy modern storage devices. There are many small farms in Ukraine that are in no hurry to build their own facilities for 10-20 thousand tons. Currently, the process of land redistribution is underway and depending on which enterprises become larger – large or small, the priorities in the construction of warehouses will change.
What are you building in Ukraine now?
We are continuing work on the construction of an elevator in Antoniny with a capacity of over 100,000 cubic meters. tons for Epicentr Agro. We are also preparing to launch several new facilities for 50-100 thousand sq m. tone. We expect smaller facilities to be launched in a year or two when farmers take advantage of high world food prices and earn enough money for their own infrastructure projects.
Are FEERUM dryers popular in Ukraine?
Many of our dryers have been purchased by Epicentr – their total capacity is 450 MW, which allows us to dry up to 50,000 tons of corn per day. For example, at the Winnica Epicentr Agro facility, 4 dryers with a capacity of 50 MW were installed. If we are talking about other facilities, including promising ones, customers are interested in our dryers due to their high efficiency and energy efficiency. An additional advantage for Ukrainian farmers is the possibility of purchasing a dryer with low financing costs. Thanks to the use of a letter of credit, the payment for the dryer can be extended by up to 2 years.