Large companies are the subject of public and government attention. There is no point in discussing whether Ukraine is the territory of holding holdings or the environment of five hectares of farmers. Both the first and the second are successfully operating and cooperating in our state. All large companies form and develop their own partner programs, designed to create synergies between different business scales and different business approaches.
With the new partnership program, Astarta, known in Ukraine and abroad, is the company, and it is a loud event for the market. Although the market is in a state of disrepair under the pressure of many factors. Uncertainty and impossibility of reliable forecasting are features of the present, and at this moment “Astarta” is placing a powerful shoulder on agricultural producers. Farmers suffer from climate shocks and market shocks, low purchase prices, and rising prices for inputs for production.
The idea belongs to the head of the company, who inspired the team to form an ecosystem approach in working with partners, – tells Natalia Golovan, head of the center of partnership interaction “Astarta”. “Astarta has been working closely with agricultural producers and business structures that supply seeds, fertilizers, plant protection, machinery, services, etc. for many years. All of them interact in the work. “Astarta” actually has a lot of business directions connected with agro-partners: We cooperate with the shareholders, grain producers, with the luggage on our seven elevators, and buyers of commodity and material values, which “Astarta” also supplies. It is seeds, fertilizers, plant protection means, etc.; it is also logistics, and elevator services. Manufacturers come to us in the advance under the future harvest.
If we can offer agriculture the majority of the goods it needs in business, why not? “Astarta” has always been looking for ways of cooperation and partnership. This is how we reached the project, which offers partners the largest package of motors, services, and values. Our partner, if he needs to sell grain, will sell it to “Astarta”; if he needs financial resources – will take them to “Astarta”; if there is a need for seed, fertilizers, or means of plant protection, the partner knows that in “Astarta” he will find cheaper; it is necessary to ensure the future harvest – “Astarta” will offer the most advantageous conditions. All this complex is offered to partners. We combine our internal business opportunities by attracting suppliers of goods for the agro-sector and agricultural producers.
How do you assess this idea: It has a more commercial or social responsibility for the business?
“Astarta” as a socially responsible company understands that now is not a time of competition, but a partnership. Therefore, large and small agro-producers, having United, can strengthen each other. This is a flexible system of spiv¬labor, which can be realized not only between agricultural producer and “Astarta”, it can take part several other companies, each of which makes in the program of its zest, in the general form an interesting and effective new format of cooperation. We are at the stage of negotiations, new participants join each day. Our center is only three months old, so we have a unique offer and expand our partner pool.
Did you monitor the market? How do agricultural producers in general treat package offers?
Do they not perceive it as a set of useful and unnecessary things to load?
It is very interesting for agricultural producers, we see the high activity of our partners during negotiations and presentations. Our proposals are perceived as constructive, sometimes agricultural producers make adjustments, adap¬tuating them to their realities. They work with us profitably, because we do not offer one package and a very wide choice of possibilities and the other¬mentov. They are interested to choose from the offers the maximum necessary points, buying everything in one company, immediately solving the issue of implementation, and finally getting the benefit of the partnership.
That is, the partner is offered a designer, a model which he should make himself?
Partner gets access to the widest choice of resources and services, in one package it offers both fertilizers, protection, seed material, logistics, and insurance services, And it-solutions for an increase of efficiency of AgriChain agribusiness. We will offer forward programs, the advance of the future harvest, possibilities of use of our equipment, and services of our elevators. Partners will choose the package positions they need.
How many agricultural partners do you have?
According to various programs “Astarta” cooperates with 1600 manufacturers. These are agro-companies that work with us to grow sugar beets, the basic culture of “Astarta”, and those who are users of services of our elevators. These are those who supply soybeans to our global processing plant, these are those who advance for the future harvest, who supply us grain on the spot. In total, over a thousand partners, and we create a model in which they will work with us, not on separate programs, but will interact with Astarta as a single system and have access to all its capabilities.
So, does your program work in certain features for a long time in the market?
Not the program itself, but its elements. We are going by combining the elements into a system. We have many concrete examples of cooperation with agricultural producers in the forward-looking program when we provide money or mineral fertilizers and separate money for the future harvest.
There are objects when we provide only on¬сinnate and means of plant protection, commodity financing. Long-term cooperation with AgriChain, insurance companies offering their products. There is a project of you¬obrochennya of our own seed. We conduct negotiations with external business structures, service providers, and resources, involving them in our ECO-system. We are working with commercial banks.
What is the greatest difficulty in singing and working with partners? It is known that agricultural producers are a very conservative audience, they are people who will not come, for example, for seeds, until they see that the neighbor it went well and was born.
Being an agricultural producer in Ukraine is very difficult now. We understand that during their work there could be a different experience with partners – other companies, structures, that is why the agro-producer is now very irrational and cautious, weighing every step. But it is not difficult for Astarta to establish cooperation because for 27 years the company has had a reputation as a good partner, it is known as a reliable company, and we keep this perception. Many producers know: If they work with Astarta, they will have everything well – both with growth, on the elevator, and with calculations. It is a good business with an indispensable fulfillment of its obligations. Hundreds of intermediaries, and agents, and yet the agro-producer chooses a company with guaranteed efficiency.
Is this your initiative related to the future land market?
You know, we are not part of the corporate rights of our partners, so the connection with the future land market is only because we can support our partners financially in times of financial turmoil.
How did you name, your partner program?
We call it the “Astarta” ECO-system, where the main goal is for businesses and producers to find a common platform on which they can cooperate with each other.
Do not lose, losing moisture
A lot of people gathered at the oval table in the conference room “Astarta”. All of them are heads of different businesses, which unite “Astarta” or created within this group. It is these wide-scale businesses that have become the basis of the future partnership program, and it is these unique opportunities that farmers will be able to use. In particular, agrousra¬chichchiem.
But why do we have such undeveloped agricultural insurance in Ukraine in principle? – I asked Mykhailo Zhvanova, Head of Sales Department of the Ukrainian Agrarian and Insurance Company.
In Ukraine, 2% of agricultural land is insured, and this is primarily a result of the low business culture in the country. We do not have a culture of insurance.
We meet farmers and ask what they know about agricultural insurance. They have no trust in agro-insurance, and we have to develop this culture. But the events of this year showed that interest in insurance is that the need for these services is very high.
Do you mean the drought in Odesa?
No, farmers from the Chernihiv region and Zhytomyr region apply. The year is indicative, rich in climatic and market cataclysms. Of course, the farmer tries to save money by covering the natural losses of the crop. Here, large companies are easier – they have several cultures, and diversify risks. Small producers are much more difficult. They do not have volumes, and the risk of drought, for example, can cause the bankruptcy of the manufacturer. We help significantly reduce these risks and give the client confidence, now and within the limits of the program “Astarta”.
What are the main risks you propose to the insurance board?
Agricultural risk insurance can be divided into two groups. This is insurance in the winter time, reinsurance – here the main costs of the manufacturer, sowing material, fuel, means of plant protection, labor, and personnel payment are insured. The next period is spring-summer, here we ensure the future harvest, in particular, is not received. This is classic insurance. A new type of service – index insurance – is gradually appearing on the market in Ukraine. You mentioned the conservatism of farmers, but their interest in the new direction is much higher than in classical insurance.
Last year we launched a pilot project of index insurance and tested it in Astarta`s fields. This direction has proved its right to exist, last year we paid more than 5,5 million UAH. It is a soil moisture index program developed in conjunction with Swiss Re, a Swiss reinsurance company, and with VanderSat, a Netherlands company that analyzes various satellite data and determines soil moisture deficit. The advantage of this product is that compared to the classic insurance of the future harvest there is no deductible (part of losses that are not compensated). The administration of this program is somewhat simplified, i.e. the survey of crops is not carried out, as the presence and condition of crops are monitored by satellite images. Another advantage is a rather long term of coverage – up to 3 months, since most insurance programs, which are based on weather indices, on¬give protection only for 1 month.
Once I had to work with all insurers of Ukraine, and I noted that in the majority of the CK there are no specialists in agricultural business…
I understand what you are talking about. Companies that operate in the agro-insurance market are barely growing beyond the limits of dozens.
I suppose that in six or seven companies there are specialists with agrarian education. We are one of such companies, our chief underwriter has higher agronomic education, experience in the position of agronomist in the agricultural enterprise, and qualification certificate of emergency Commissioner for determining the reasons for the occurrence of an insurance case in agriculture in the field of crop production.
How quickly does the insurance company compensate for the losses of the manufacturer?
Everything depends on the complexity of the case and the specific insurance program. According to the classic future crop insurance programs, let us say, if this is partial damage of plants due to the action of insured risks, it takes time to fix the action of this risk (a corresponding damage act is drawn up, which indicates the percentage of damaged or destroyed plants), and then we expect to start harvesting, to determine the actual yield on the field. After all necessary documents provided in the insurance contract for a particular insurance risk are submitted, the Insurer decides on payment within 15 working days. After the decision is made – the insurance act is signed, and the payment should be made also within 15 working days.
Within the framework of the partner program is the service expensive?
From the point of view of risks, it is not a way to compare the payment and compensation.
Your cooperation in the partner program “Astarta” is an additional clone or perspective for you?
Definitely – perspective. This is a very interesting project, we are a part of it and within this framework, we can bring to a wide public the effectiveness of agro-insurance.
Everything starts with seeds
The following agronomic specialist of Astarta Alexander Pilipenko, the head of Astarta Service and the combination of the main agronomist from the technology, joined the conversation:
In the framework of the partnership program, as mentioned above, we will provide seeds of our production. “Astarta-Service” was formerly called “Astarta-Selectsia” and was renamed with the emergence of new directions. We have three in general: Seed production, research, and testing centers for agricultural production and agro-laboratory. We have two plants in Ukraine: In Shyshak Poltava region and Volochysk Khmelnytsky region. The seed is fully provided by Astarta-holding on winter wheat, soy, and small volumes of winter barley. For the second season we sell seeds to external clients outside the holding, we have a full cycle of growing seeds and paths, and we work with both domestic and foreign selection. It is the Institute of Physiology, the Selection and Genetic Institute, RAGT, Saatbau, Oseva, KWS, and others. The wheat of these companies is not only produced as a seed but also growing in “Astarta-holding” on tens of thousands of hectares of land.
Do you have some favorite variety?
If we talk about the holding area, it is wrong to choose one favorite class. In the Eastern region, the best is shown by the national selection, in the Western Ukraine good indicators can give Ukrainian selection, but the most intensive are the varieties of European selection. I have a lot of my favorite people, in Poltava region – these are two sorts of domestic, Astarta and Bogdan. In Western Ukraine, Kubus KWS and reform RAGT are very much liked. All of them can provide high yield and fully meet the requirements of agronomists. All this is available to partners of the new program “Astarta”, but if we offer seed material, fertilizers, and means of protection, we will promote the technology. Since we are represented in many regions, we can select varieties based on our growing practice in these regions, providing certain guarantees.
Buy effective management? This is real.
Nataliya Bohacheva, director of AgriChain, positions her company as a new generation of IT-solutions for agribusiness, and the question to her was: What can AgriChain give a farmer who, within the framework of the partnership program, offers money, insurance, seeds, fertilizers, plant protection means… What else is the human being in need?
AgriChain Company was founded in 2017 on the initiative of Astarta Management to develop solutions that would cover the needs of Astarta to automate all processes and increase the effectiveness of agro-production. Solutions that were presented on the market, either not designed for certain processes or are hard to adapt, connected with external providers, so it was decided to create its software product. The idea appeared, financing of the International Investment Bank appeared, and a company was created. Our team had a certain experience of similar activity in another large holding company. For 12 months, we have developed the first two modules – land bank management and operational processes management in plants – and started their implementation. We set ourselves the task not only to develop software for Astarta but to create a universal flexible system capable of covering the business processes of any agro-company. The system is focused on large and medium-sized businesses.
We also have modules for small businesses. Today we have seven projects, which we realize in Astarta. We meet with the management of other companies to exchange experience and receive constructive feedback. And this exchange of experience has led to the commercialization of the system – we have received proposals to sell our solutions, and today we have the first successful cases of implementation of our solutions in third-party companies. In my deep conviction, this system can become the industry standard. This is a multi-module ERP-class system in the form OF WEB and mobile applications – there is no such development in Ukraine. The system allows increasing the efficiency of everyone who uses it, the industry as a whole, and the country. We are providing the system, which is now a commercial product and is also available within the Astarta partnership program. From the point of view of the evaluation of the efficiency of the implementation of the modules, according to the analysis (only reduction of direct costs as the main marker), the system in Astarta has already paid off several times. However, our main goal is not commercial – we strive to unite business structures around innovative systems that allow us to build processes, automate them, systematize them, to start using qualitative instruments and technologies of management and decision making.
We constantly improve our existing solutions and develop new modules to ensure that our platform closes all the needs of the agro-company. Successful cases are important for us. We are very careful in the process of implementation of our solutions – we conduct consultations, communicate with specialists, conduct training, and accompany all stages to ensure that the client receives real results from the system implementation. When a client has managed his processes, when he has bought the system several times in half a year, it is a real result for us. We offer our solutions both in the form of subscriptions for cloud service and in the form of box solutions. All our modules are fully integrated into 1C, the most common accounting system in Ukraine. What for an agronomist, what for an engineer, what for a specialist of the land department, what for an operational manager or top manager, the main function of the system is management: land bank, monitoring of crops, production, logistics, composition, based on clear business processes and risk management. This is what the partners and participants of the program “EKO-system “Astarta” will get.
Yes, just a beautiful sky over the field of wheat. Just a dream.
Dream, but quite affordable. Available for Astarta partners, for all of Ukraine.