On 15-17 October Kharkiv International Airport will play host to the second annual AGROPORT 2015 International Agrarian Forum. The event, which is expected to attract over 10,000 visitors and involve more than participating companies, is part of mounting efforts to promote Ukraine’s status as an global agricultural superpower and build additional bridges with international partners. Focuses of this year’s forum will include dedicated sessions on agricultural cooperation with Germany and Poland – highlighting the growing levels of international interest in the Ukrainian agricultural sector, which continues to register impressive growth despite the broader malaise currently gripping the Ukrainian economy. As Kharkiv prepares to welcome agriculture sector executives from across the region, Business Ukraine magazine spoke to the Director General of the city’s flagship Kharkiv Tractor Plant, Vladislav Gubin, about his vision for the continued growth and modernization of Ukraine’s potentially world-beating agriculture sector. Mr. Gubin argues that the development of Ukraine’s vast Soviet-era agro-industrial inheritance hinges on the appointment of a new generation of professionally qualified managers, and says that the future of Kharkiv Tractor Plant depends on strategic transition away from reliance on traditional CIS clients and towards greater penetration of global markets.
Much of Ukraine’s industrial potential remains hampered by mismanagement and a lack of post-Soviet investment. As the Director General of one of Kharkiv’s flagship industrial plants, what do you see as the priorities for improving the performance of Ukraine’s biggest industrial enterprises?
At present, everyone is engaged in the fight against corruption. My opinion is that the highest priority should be combating nepotism in order to allow for a new generation of professional managers to emerge. The government and private sector both need to introduce regulations and procedures to make sure appointees are qualified to perform in their positions. Inappropriate appointments should be classified as a threat to Ukraine’s national interests, and the government should be prepared to intervene if necessary. If we continue to invite international experts to aid the reform process while having amateurs working in senior positions, the results will be disastrous. Unofficial estimates suggest that up to 80% of senior positions in Ukrainian industry are currently occupied by unqualified people without the necessary education or professional experience.
You became head of Kharkiv Tractor Plant two years ago at the relatively tender age of 39. How difficult has it been to adapt to a role which has traditionally been held by significantly older professionals?
Young managers of major industrial enterprises are the exception rather than the rule in Ukraine. In general, I support the idea of the top positions in major companies of this nature being occupied by experienced professionals. I was able to take on a leadership role at a relatively young age due to lots of hard work and thanks to the experience I was able to gain in a range of similar enterprises. In global terms, people tend to reach their professional peak at around the age of 45, but for some it comes a little earlier. I continue to work with my departmental directors on a daily basis, and try to learn as much as possible from my team.
What are the current strategic objectives for Kharkiv Tractor Plant?
Kharkiv Tractor Plant is undoubtedly a global brand, but for the past two decades, our presence has largely been limited to CIS markets. Our goal is to develop the brand’s popularity throughout the world. Our current priorities are to expand our geographical reach and boost plant output. The medium-term strategic objective is achieve a majority of sales outside of the CIS by 2020. This would allow us to continue expanding, because growth is only possible via increased exports to new markets. The global potential of our products is extremely high – we have entirely renewed our production line over the past two years and have brought the plant to a new level in terms of quality.
What impact do global market trends have on your planning for the development of Kharkiv Tractor Plant?
Global food security will soon replace energy security as the key issue driving geopolitics. The world population is already around 7.5 billion people, and this figure will rise to 10 billion within a decade or so. At the same time, quality of life is improving and people require higher quality food. Everything indicates that global financial resources will increasingly focus on this sector. As a result, demand for agricultural machinery around the world is set to increase. This means more global expansion opportunities for Kharkiv Tractor Plant.
The conflict in east Ukraine has had a negative impact on the national economy and on major industrial enterprises in particular. How have you managed to adapt to the challenges presented by the ongoing conflict?
Everyone has suffered, but it is my job to minimize the risks our company faces and to make the right decisions in a timely fashion. We have focused on diversification of both suppliers and distributors, while also building a new sales and service network and developing direct sales. Our previous experience of risk management has proved useful in dealing with the current challenges. Working in the CIS region has taught us to explore unorthodox solutions in order to make sure we meet our production and delivery schedules. The risks which have always been inherent in doing business with Russia and the CIS are further evidence that we are moving in the right direction by looking to expand to world markets. Today our priorities are Asia and Africa. There has recently been a drop on demand for agricultural equipment on global markets, but Africa and Asia offer both stability and growth.
International Agrarian Forum
Kharkiv International Airport