Playing the long game: how to benefit from entering the European market
Ukraine's path to the EU requires fundamental changes in business approaches. After all, this market requires not only the availability of products, but also transparency of the entire supply chain, compliance with environmental standards and high financial discipline. In order not to lose margins before entering the EU market, it is worth preparing today.
Strategy in the face of uncertainty
According to Yuriy Pokladenko, Business Development Manager at UkrAgroConsult, during the webinar "EU without illusions: rules of the game, risks, stable margin. European Integration in the Agricultural Sector", agricultural companies that prepare for EU accession in time will be successful. To do this, first of all, it is necessary to focus on sustainable development, diversification, change of business mentality, quality control.
- Sustainable development requires autonomy. To make the business less dependent, you need reserves: financial, raw materials, etc.
"Annual plans are no longer relevant. Even in Europe, they do six-monthly, three-monthly, and even zero budgeting, when the budget moves like a moving average in technical analysis, without a starting point," explains Yuriy Pokladenko.
- Diversification and focus. If suppliers need to be diversified, then the business should be focused. Vertical integration, which is so common in Ukraine, is not very consistent with the European trend towards specialization.
"In Ukraine, everything is vertically integrated: companies build a chain from field to store shelf. The world is dominated by narrow specialization. Companies narrowly focus on a segment and bring it to perfection. For example, Cargill and Louis Dreyfus do not grow corn, but only trade," the expert notes.
- Changing the mentality. In Ukraine, it is normal to avoid taxation, while in Europe there is a concept of optimization, and it is facilitated by the tax authorities themselves.
"Only the weak pay - also a specific post-Soviet mindset. In Europe, everything is built on the contrary: if a partner earns, I earn," adds the manager of UkrAgroConsult.
- Corporate culture. Ukraine still has a lot of authoritarian management system with internal competition. In Europe, horizontal structures have already been built where everyone is listened to. Teamwork is valued the most.
Another important factor of European integration is social responsibility and environmental protection - ESG (Ecology, Social Governance).
- Quality control. The transition to international accounting standards makes it possible to understand and see Ukrainian business correctly."
"We need not only quality control, but also its maintenance. Quality starts from the field," summarized Yuriy Pokladenko.