Ukraine has recently announced the creation of a real incubator for innovative projects in the food industry – the VOLIA foodtech cluster, which will include an industrial park in Vinnytsia, a corn cluster in Ivano-Frankivsk, and a logistics centre in the border town of Hrushev.
How powerful can such synergy be, what will each facility specialize in, and how is the selection of residents carried out? – said Valeriy Kyrylko, CEO of the management company U PARKS.
How does an industrial park realise the synergy of its participants? To what extent is this a significant factor in influencing the operational efficiency of each?
V.K.: The main idea is that any industrial synergy ensures production optimization. This has a very positive effect on the cost of the final product.
PRODUCT COST IS A KEY FACTOR IN THE OPPORTUNITY TO COMPETE WITH ANYONE. IN UKRAINE, EUROPE AND THE WORLD
I would highlight several types of synergies that can be realized within the industrial park:
- Infrastructural or technical synergy. This is when several park participants use infrastructure or technological facilities located near the park. For example, to use a warehouse, you don’t need to build it. There is a company that manages the warehouse, and the rest of the industrial park’s companies use it. As a result, everyone saves money.
Another example is the use of a car fleet for the delivery of products, which not everyone can afford or wants to save on. The industrial park will be able to provide logistics services for park operators. - Cluster synergy or production synergy. This is when companies complement each other in the technological cycle. For example, a chipboard manufacturer interacts with a nearby furniture manufacturer, which in turn interacts with a hardware manufacturer. The same is true in other areas of activity. For example, someone owns a cold storage facility that is used by another operator. And the latter, in turn, cooperates with a packaging manufacturer standing next to it. Then a logistics company that is a member of the park delivers the goods to retail outlets or wholesale buyers. Together, this shortens production chains and reduces production costs. All of this happens through synergy.
- «An industrial symbiosis» is formed when companies not only work together but also provide each other with raw materials. For example, one company receives a by-product in the production process – plastic scraps, while another recycles these parts and manufactures its own products. Or a biogas plant receives gas from the waste produced by food companies operating in the park. Everyone gets savings – on disposal, procurement, recycling, and so on.
«INDUSTRIAL SYMBIOSIS» IS FORMED WHEN ENTERPRISES NOT ONLY WORK TOGETHER BUT ALSO PROVIDE EACH OTHER WITH RAW MATERIALS
Synergy is also evident in the fact that the park is centrally managed. This means that security, cleaning, maintenance and common communications are already organised there. So everyone does not have to build it «from scratch».
Valery Kirilko, CEO of the management company U PARKS.
Thus, each company gains many advantages in organising production and logistics with the help of a fleet. What about exports? How does participation in an industrial park help you enter foreign markets? What is the sustainable advantage?
В.К.: In fact, this happens as a result of cooperation between the park’s enterprises, when a single centre or marketing or export hub is created to serve all participants. As a result, distribution companies receive not just one product line, but a range of goods produced by the enterprises.
Branding of the park plays an important role as a confirmation of the quality of the products manufactured there. Many companies cannot afford this because of their small marketing budgets. However, when everything is done centrally (branding, promotion, merchandising, etc.), the economic effect will be much higher with relatively small marketing investments.
THE INDUSTRIAL PARK ACTS AS A MARKETPLACE WITH A WIDE RANGE OF PRODUCTS AND COMMON PROMOTION CHANNELS
Individually, each small enterprise cannot afford a commodity agent who will go to offer goods in Europe or beyond, and for an industrial park, such an option will cost less for each of its participants.
Synergy is formed as a result of cooperation between enterprises of the park, when a single center or marketing or export hub is created that serves all participants
How, in fact, a production community can cause the appearance of new, fundamentally new products? Can industrial parks become platforms for the development of not only large enterprises, but also small food startups?
V.K.: Industrial parks in the world are no longer just industrial sites where products are manufactured.
IT IS NOT THE PRODUCTS THAT ARE COMPETING NOW, BUT THE TECHNOLOGIES IMPLEMENTED IN THESE PRODUCTS
In any industrial park in the world, its developers lay a technological component – in the form of R&D laboratories, business accelerators and other systems that stimulate the development of innovations.
For example, in the VOLIA industrial park in Vinnytsia, a large block is planned to be used as an “innovation kitchen”. It is literally and figuratively an innovation kitchen, where new products will be prepared, developed and tested, taking into account the interest of potential users. These users will be known almost immediately — from the beginning of marketing research. First of all, we will find out what the consumer needs right now? With what characteristics and properties?
THE BRANDING OF THE PARK PLAYS AN IMPORTANT ROLE — AS A CONFIRMATION OF THE QUALITY OF THE PRODUCTS MANUFACTURED THERE
Then the relevant request is placed in the innovation community. This community creates work teams that design new products in the test mode, then test them in small series, and then start production on an industrial scale on the territory of the industrial park with further implementation.
I was invited to join the team of the U PARKS company, which will manage the park, by its co-founders, successful industry businessmen such as:
1. Boris Shestopalov, shareholder of HD Group and GFS companies
Borys Shestopalov, HD Group, GFS Shareholder
Strategist and futurist, CEO of Advanter Group Andrii Dligach will help residents navigate global trends.
Your company U PARKS will manage three industrial park locations. Will each of them have their advantages? For example, how will the work of border Hrushev be organized in bringing new products to foreign markets? How much easier will it make logistics?
V.K.: As with any business, industrial parks are tied to their location, and should get maximum benefit from their location and one or another technical competence.
For each of the three industrial parks that are currently in our portfolio (we plan to expand this portfolio in the future), we have really singled out a certain specialization.
IN ANY INDUSTRIAL PARK IN THE WORLD, ITS DEVELOPERS ESTABLISH A TECHNOLOGY WAREHOUSE – IN THE FORM OF R&D LABORATORIES, BUSINESS ACCELERATORS AND OTHER SYSTEMS THAT STIMULATE THE DEVELOPMENT OF INNOVATIONS
For example, the Yavoriv industrial park is located 5 kilometers from the Hrushiv border crossing. It would be logical to install a dry port there (and we are currently working on it), which will become a transshipment base for ready-made food products or raw materials for food products exported abroad and vice versa. Raw materials from abroad will be similarly distributed in our logistics hub.
But this does not mean that there will be only logistics. Now we have several applications, for example, for packaging. One of the applications is for oil: raw materials are brought here, then the oil is bottled and sent to Europe.
With partners from UNIDO (United Nations Industrial Development Organization)
Packing or finalizing products before sending them abroad can work according to approximately the same scheme. But this does not exclude the presence of processing industry enterprises, which are also planned to be located in this industrial park. On 40 hectares of territory, there is enough space and opportunity for processing companies to work here.
Of course, preference will be given to those who are export-oriented – due to the location of the plot. All conditions will be created for them to send their goods to Europe faster.
But the flagship will be the industrial park in Vinnytsia, right? What will you offer for participating companies? But at what stage is the creation of the park?
V.K.: Yes, we plan to make Vinnytsia Industrial Park the flagship of the Agri Food Tech cluster. Since Vinnytsia is practically the center of Ukraine, the park is very advantageously located both in terms of proximity to raw materials, various technological and physical bases, and cross-border transportation.
In this park, we will focus on the processing industry. Moreover, the processing industry is quite high-class, which aims to create high technological production and innovations in food production. It is not a fact that all of these will go for export, but the fact that most of the enterprises that will be located there will also be export-oriented — this can already be said for sure.
NOW WE CAREFULLY SELECT THE FUTURE RESIDENTS OF THE PARK. THERE ARE ENOUGH WILLING PEOPLE
It is in this park that we plan to implement a large technological innovation block, R&D laboratories, and an innovation kitchen for the creation and testing of new food and further production. We plan to make exhibition showrooms, training centers, and a large service component for enterprises there.
We are now carefully selecting future residents of the park. There are enough willing. We are negotiating with quite a number of businesses that we want to locate there. There is no clear narrow specialization, apart from the fact that these will be enterprises mainly of the food processing industry, service and warehouses of finished products.
