Boris Shestopalov is a foodtech evangelist. He represents the generation of business people who create new meanings in seemingly conservative industries. Even now, despite the war, he continues to drive this stream. Currently, the entrepreneur is behind the ideology and the creation of the VOLIA FoodTech Cluster — an industrial park for food manufacturers.
“Being a ‘breadbasket’ is an outdated vision for Ukraine. Yet, Borys has rediscovered it. For him, Ukraine is a breadbasket of new meanings. It is a space where nature’s gifts combined with technology and responsibility can open up a new opportunity for the world to get rid of hunger forever,” says Andriy Dlihach, founder of Advanter Group and the Board business community.
We asked the foodtech visionary how this industrial park will help Ukrainian producers conquer world markets and Ukraine will position itself as the Mecca of cutting-edge food technologies.
The issue of global food security has become urgent with the outbreak of the Russo-Ukrainian war. Was it the reason for launching such a project?
The idea wasn’t absolutely new to me. I started working with like-minded people to develop a specialized industrial park long before the full-scale invasion of Russia. We were close to launching such an industrial park in the Kyiv suburbia, near Boryspil.
We wanted it to specialize in new technologies for processing agricultural products and creating ready-made solutions in food production. It seemed that the beginning of the war completely undermined our plans. Yet, after looking for a new place to potentially relocate part of my business and talking to many business people who were busy doing the same, it became clear that this idea hasn’t lost its relevance. As it turned out, practically no areas are suitable for relocating the company. First of all, it goes about premises for food industry enterprises. They require special conditions, such as “clean zones,” space for refrigerating chambers, and convenient logistics, both internal and external.
What issues can the resident companies of this park tackle on Ukrainian and global levels?
Here’s what we need to understand first. Within the EU’s open economic area, not only will our goods enter the European Union, but also the goods of European manufacturers will enter Ukraine. It will lead to competition in operational efficiency. The correct organization of production will play a significant role. What does it mean? How energy-efficient we are, whether we comply with the rules for reducing carbon emissions, switch to “green” energy, and so on.
In this case, we’re talking about not merely relocating the business physically. We’re talking about relocating the company to an entirely new space. There, the business receives a whole set of elements to increase its operational efficiency. In the future, this will not only reduce the cost of production but also facilitate obtaining several necessary European certificates. Competing with enterprises built over the last 20 years, mainly in Eastern Europe, we will have a chance to take a decent place on the shelves of European retail chains only if we build enterprises with an eye on the following decades.
In this case, we’re talking about not merely relocating the business physically. We’re talking about relocating the company to an entirely new space. There, the business receives a whole set of elements to increase its operational efficiency.
Ukrainian manufacturers should remember the logistical problems we are facing today, having lost part of the maritime routes. Today, major cargo exports are landlocked, significantly narrowing the possibilities of Ukrainian trade. We are restricted in production and moving timely and affordably to Europe and beyond.
Therefore, the main task Ukrainian agricultural businesses face today is to increase the value of each kilogram exported. In other words, to increase the value and marginality of products, they need to transport through the corridors that have significantly shrunk. Simply put, flour is better than grain, but a flour snack is better than flour. What’s even better — frozen bread or products of deep grain processing, such as essential amino acids: lysine, lecithin, and so on. It applies to basically every product.
Synergy is one of the benefits such industrial clusters have. How do you see it emerge in VOLIA FoodTech Cluster?
It is essential to mention that Ukrainian food producers will be able to obtain European certification. Cluster park organization implies locating producers and processors on the same territory or within convenient logistical reach. Thus, they complement each other. As a result, raw material processors, ready-made food manufacturers, packaging manufacturers, logistics companies, and others can work within the same park. That is, creating such an ecosystem allows each participant to get added value using the competencies of other residents. And it will be possible without additional infrastructure, at an acceptable market price and arm’s length.
Creating such an ecosystem allows each participant to get added value using the competencies of other residents
That’s a win-win philosophy. Besides, having and using “green” technologies pave the way to getting additional certification, for instance, Green Label, Zero Carbon, or even Organic, should organic materials be used. These give Ukrainian manufacturers an opportunity to offer their goods with added value to European customers.
It seems that this project aligns with the economic recovery of Ukraine. Could it become a kind of a Marshall Plan for the food industry?
I have no doubts that industrial parks are to become the economic driver that will allow us to go through the tough post-war recovery. Though, I’d call it “post-war modernization” instead since we need to build a totally new type of economy. And the project we aim to make true is to become the foundation of our long-term success.
