Dmytro Kobzarenko: People value quality, quality always wins
The conversation with Dmytro Kobzarenko differs from other conversations with founders and CEOs of companies in that Dmitry manages the company’s division in the EU. Moreover, he actually built a plant in Poland from scratch, so his vision of the process is on the European level, but taking into account the realities of Ukraine and the war.In addition, Dmytro Kobzarenko is a representative of the new generation of managers of industrial enterprises. And it is always exciting to see who is replacing the old staff who have already created certain assets. Young school versus old school. Apparently, yes. However, the young generation always outdoes and develops the achievements of their predecessors. You and I know this, because we ourselves were once the young generation that was ahead of the old directors.
When I sat down at the keyboard to record the conversation, I accidentally glanced at Facebook – Anatoly Kobzarenko would have turned 60 today… My chest tightened. When a person goes into the afterlife, then you understand what he did for the world, and only then do you understand that you loved this person. “Kobzarenko Plant” for me and for Ukraine is more than just an enterprise for the production of agricultural machinery. It is the Ukrainian soul embodied in metal and concrete.
However, I realize that most of all Kobzarenko would like us to live and work. So let’s get to work.
The company is growing best in its market
– Dmytro, tell me, do you feel the mood of farmers in Europe? How did the weather anomalies, cold April and May, frosts affect crops and farmers’ desire to buy machinery? And also the elections in Poland…
– Our workers are shocked – they don’t understand how it could have happened that a non-pro-European candidate won. Some big businessmen, factory owners, say: we need to go to China, build a factory… Poland is over for them…
The cold May, of course, did not bring joy to farmers. My dealer is very active, if not every day, then every other day he takes away some equipment. Farmers are positive because of the end of the customs visa-free regime, that Ukrainian grain will not be duty-free, so they believe that they will have a price again.
– However, the price of grain does not depend on either Poland or Ukraine…
– Indeed. We work in different countries in Europe. The problem in the Czech Republic is that after the foot-and-mouth disease, the livestock population was reduced, and we used to supply more livestock equipment there. However, there is a Slovak subdealer in the Czech Republic – everything is great there, we are breaking sales records there. The main target is still Poland. Any company grows best in its own market. This is what happened in Ukraine, and we also consider Poland as a second home.
– How does the Green Deal policy, which is putting pressure on European farmers, affect your plans?– Frankly, we don’t look at these trends. It seems that the pace of implementation of this policy is slowing down now. It’s not so much the Green Deal as decarbonization that affects manufacturers of equipment, creating new requirements. This is an increase in wheel width – less pressure on the soil, less CO2 emissions into the atmosphere. Many subsidy programs are bringing equipment up to this. Marek Ružniak, Mzuri, professor, scientist, says that we will get to this anyway, so he creates super-ecological production of equipment. The Green Deal is just one of the branches of Green Europe. The requirements apply not only to farmers. CO2 emissions in production are also limited. We need to use environmentally friendly paints, install additional filters, and use renewable energy. This works not only for farmers, it affects every sphere, IT, and manufacturing. For example, Apple reduced its boxes to save paper. This is how the requirements of the European Union work, I think there is no point in fighting here, you need to adapt your product and factory to the new requirements.
ISOBUS-connected tanker
– In Ukraine, a ton of agricultural products costs a little more than €280, and in Europe – €1,561 thanks to processing… Doesn’t the fact that people in Ukraine are more involved in livestock farming and processing reduce the demand for trailers?
– Processing does not exclude the use of transportation from the field and within the farm, and logistics to the port are removed to a certain extent. This may reduce the demand for our aluminum grain trucks. If we look at the European trend, the “TENT” program, which is designed to remove trucks from the roads and transfer cargo to the railway, the demand for reloading equipment may increase. If we talk about livestock farming, equipment is also needed there, we are simply adapting to new needs. In addition to livestock farming, biogas production is also developing. Production residues were previously simply scattered there, but now they are already being brought in through tanks, so the nearest period is the intensive development of precise pouring with a link to ISOBUS. All changes create new free niches – those who follow the market see where they can offer their product.
– What market share does your company have in Ukraine and Poland? The market is very competitive.– It seems to me that in Ukraine we have 80-85% of the market for bunker-loaders. In dump trailers, I think it could be 95%, since we do not allow foreign competitors, using the 25% compensation program for domestic manufacturers. The same share is in sliding trailers. I consider competition a positive phenomenon, it motivates us to develop the product further. There have also been bunker-loaders using Canadian technology, but so far, it seems to me that the product has not been brought to perfection. What is most important for bunker-loaders? The unloading speed, the volume that the bunker can transport, and the pressure on the ground. And the last factor is the price. I have been to Canada, I also saw this system when 40 tons drives on two axles. Here, 40 tons drives on four. We turned to world rubber manufacturers to calculate the pressure on the ground. Different pressure, different tire width, contact patch. And I’ll tell you that there are no advantages in Canada. If you look at the calculations, the 800th or 700th wheel on four axles distributes the pressure on the ground much better than the equivalent on two axles. Of course, these trailers will be improved, but this particular model, I think, has not hit the market. In Poland, we are not a very visible company yet. Although, perhaps, we occupy up to 40% in bunker-loaders, but the statistics are mixed by the sale of dump trailers, which are in the same category – tractor trailers. Why did Pronar develop so much? Because they sold trailers for 8-10 tons, which the Polish farmer needs everywhere – up to 2,000 of them are sold per year. And there are other manufacturers: Metal-Fah, Metal-Tech, Wazyński. And they all start with the production of small dump trailers, and we focused on a slightly more complex product. In dump trailers, we probably don’t even have 5% of the market. First, we made the PBN-50, a forty-ton bunker-loader, and only then the PBN-9, the smallest one, which was made for Norway. Our focus was on larger farms. In Ukraine, we are the largest manufacturer of bunker-loaders, although at least three bunker manufacturers have already entered the market. Competition is growing, the market volume is still there. We don’t foresee global innovations yet, we are refining and modernizing the line, adding options, growing in quality so as not to go for some Chinese substitutes.
“Titan” commissioned
– The Chinese produce trailers by the thousands per month…– We don’t have any Chinese trailers yet, Turkey is noticeable in Bulgaria, Romania… Our factory is loaded for four months, demand is stable, dealers are working well. We made the right arrangements with them since the beginning of the year. In order not to stand idle in the winter, we put the equipment in storage, and now everyone has it in stock. Any surge in demand is covered by physically available equipment. We presented the Titan beet loader. The first request was made to me by Yevhen Stepanovich Dudka at Agritechnika two years ago. He said: we need such a trailer, they don’t make it in Ukraine, and it’s expensive to transport from America, and it’s oversized. Then Astarta joined, customers started to gradually increase – and we already have a list of 40 units. We won’t make that much in a year, this is already complex high-tech equipment. Complex conveyors, complex hydraulics. Complex synchronization. A wide conveyor, there are two hydraulic motors, on each side. Sales are not about marketing, they are about relationships. And I think this is a vivid example of synergy, when the impetus for the manufacturer comes from communication with the client. We could have put on a caterpillar chassis, but three clients told us: no need. Americans make it on a caterpillar, but it sticks, it doesn’t work in wet fields. That’s why they made it on wide wheels – 800s, and on a hydraulic suspension. Hydraulics provide the highest level of stability in operation. This is truly a product that allows you to be proud of your work. We hope it will pass the tests and enter the European market.
What will the trailer revolution be like?
– War is important for all industries, the military industry has an impact on all industries… Electronic, drone technologies… New generations of technology are being created. And nothing revolutionary has happened in agricultural machinery for a long time. Do you think about new breakthroughs, new horizons? There was once an idea to equip trailed equipment with electric motors to reduce fuel consumption…
– Yes, thanks to the restructuring that we carried out at the enterprise, it became possible to think about new generations of products. We have created certain resources, gained experience, and it is time to move forward. High-tech ones survive in the market. There is the German company TRUMPF Group, the manufacturer of the most expensive laser machines in the world. All serious manufacturers buy them equally. This brand has a large R&D center, they focus on the latest developments. Previously, everyone used plasma machines, now – laser ones, and TRUMPF is constantly researching what will come to replace them. Any company must have two things for stability: a product and sales. You can produce in China or India, the main thing is the idea of a product that is in demand. Musk said: people sometimes develop and modernize ideas that should not have existed. However, an engineer came up with it – and it exists. Now you need to catch up, you need to refine it, and this solution should not have been invented. Are self-propelled hoppers-overloaders needed? I did not find an affirmative answer. The main unit in the farm is the tractor, the rest are additions. We need to closely monitor Europe, Germany and France are the generators of the most progressive technologies. Everything that is invented there gradually goes to the East. The Chinese quickly copy, and it comes to us later. Even America takes these technologies.
What do we understand today? That there will be a problem with the workforce, we will not bring as many Indians to Ukraine as are needed for production. They are needed in India too. And every company certainly makes a calculation and calculates the cost. The product of the future should reduce the need for highly qualified employees and reduce the cost. I liked the idea that I saw in France – an autonomous system of feed mixing and delivery of feed to livestock complexes. You can think about it. However, you need to calculate the cost. If two employees cost X, and the technology will replace them, but will pay for itself in ten years, it is not worth doing.I believe that any technology should pay off in five years, or better yet, in three.Here we run into Ukraine’s engineering problem – we have very weak R&D centers, and there is a lack of technology.
In Soviet and post-Soviet times, Ukraine was an advanced country in mechanical engineering, we had an automobile industry. Just 15 years ago, we were producing 600,000 cars a year, and now we have zero. There is no investment, so the engineering school is dying out, no matter how hard Kyiv Polytechnic tries. All technologies are in Europe. That is why I set myself the goal of creating a modern R&D center.Invest not in a laser machine, but in a good engineer.With experience, knowledge, or raising such a person. You can’t make an engineer in a week. In our conditions, at our plant, we take an engineer from a university – and in about two years you can expect a high result from him.
Engineer search system
– We need a system that would find and motivate people. Here is one of the owners of car dealerships who invented an anti-aircraft turret based on artificial intelligence with an efficiency of 67%… This is an invention that can in some way change the course of the war. That’s where you need to look for engineers – in car dealerships, service stations… Do you have any revolutionary cars, revolutionary technologies in your field of vision?– Our tanks with precise pouring, precise application are already progressive technology. In addition, we see that farms are growing and striving to create added value, not to sell raw materials, but the final product – dairy farms, powdered milk, they are investing there. Every farm will need an autonomous feed mixer. I would pay attention to this need, but I have not yet assembled a team that could master such a thing. Therefore, I am at the stage of reflection. People are needed for each project. In automation, artificial intelligence and unmanned movement, there are already many solutions on the market – you need to either buy a company, or sign a partnership agreement and connect brains with mechanics so that it does not run over anyone on the farm. I believe that the principle of “one for another” is correct, we need to look for it in Ukraine. Companies that develop military self-propelled equipment are also capable of this. I have some contacts, and I believe that we need to move in this direction.
From operational to strategic management
– Tell us about the structural changes. You are not in operations management now, are you?– A year ago, I didn’t really distinguish between operational and managerial management – it was all about the plant. However, now we have appointed Serhiy Slyusarenko as director. This person came to us as a design engineer. Then he headed the design bureau, worked as a production manager. Everything is clear in his head, everything is laid out on the shelves, there is no chaos. Then I felt that it was time for me to step down from management, because I am starting to slow down some projects, because I am engaged in more important matters… Now, working on the supervisory board, I can control these processes. There is already a responsible person, and this speeds up the work. It was restless, because for the first time in history, the company is not managed by Kobzarenko. However, I feel that I have switched to a high-speed train. If before they were riding on a cart, now they are flying with the wind. The speed of decision-making has increased, communication with departments, with production, with sales has improved. There are no delays because of me. When you are in operations, it is extremely difficult to delegate authority… Of course, there are some disadvantages, bureaucracy is increasing a bit, but overall the changes in the structure are positive. I have retained the right to influence the sales department and product development, I actively participate in the work of the company. I focus my work, working externally.
Looking to the future
– Do you look at the future with optimism or with gloomy realism? There are no pessimists in business…
– You know, recently I had visits from representatives of Ukrainian associations, they talked about the state of affairs in the industry… All machine builders have the same problems – pressure from various structures from above. The reasons are different, the problem is the same.
– I think it’s because everyone was shipping equipment to the landfill.
– Before the start of the large-scale operation, everyone was shipping, and we had four trucks going in that direction on February 18, 2022… The money came later, the inspectors mistakenly identified it as an advance payment – and it started. The truth can now only be proven through the courts… Although enterprises have worse problems. Here in Sumy region there is a manufacturer of disposable tableware – a very large enterprise, people built it for 30 years. Five workshops, millions of products per hour. In 45 minutes, 20 drones laid the entire enterprise – all the machines burned down. Therefore, you can lose your job of 30 years in less than an hour…
– I agree, we live knowing that we may not wake up tomorrow. However, as I see it, people live like this: you can’t influence what might fly into your house tomorrow, but you can influence what new machines will go out into the field tomorrow. That’s why they do what they have to.– So, we still look to the future as optimists. 2024 was the worst year for machine builders in terms of sales. Analytics provide possible scenarios. Who could have assumed that the Russian Federation would start hitting ports and stop logistics? Who could have predicted that the harvest in Romania would burn? All European manufacturers made mistakes in their calculations – they had to manufacture a lot of equipment for storage. There are no official data, but both Polish and German competitors had problems – they even laid off workers. Some companies had a drawdown of 70%. That is why there is a very large price dumping now. Social networks are waving super offers. Just to start cash flow, to put money back into circulation. However, if we take 2024 as a starting point, today we have growth. We have at least 30% growth. We planned to sell 600 units for export, but we see that we can realistically make 430. This is not a very large indicator, but it is still an indicator of the workload of Ukrainian and Polish enterprises, in particular exports. Now the main task of management is the stability of the enterprise, its ability to survive in difficult conditions, and secondarily – the issue of planning. Today, the task of the seller is to get to the client in a day and not get into curfew, the task of the HR specialist is to draw up all the documents so that people are not taken away from production… Today, stories are about how to preserve what you have, not develop it. Factors limiting activity have been added. In western Ukraine, we looked at sites for half a year, and then very quickly bought the enterprise. In terms of people management, constant stress has been taken into account – you can’t get four years of war out of your head. Supporting people has become a mandatory program. 2021 was an energetic year: we are moving forward, developing, developing new markets, and now – completely different. It’s a sin to complain about such conditions, you need to be able to work in such conditions.
Focus and do what you do best.
– How do you think in these conditions? There are a lot of factors, there is the enterprise, there is the product, there is farming, customers in extremely difficult conditions, there is scientific and technological progress – these are technologies and innovations, there is the socio-political situation – Green order, carbon-free agriculture, there is climate change, which affects everything. There are political risks, which act differently in each country…
– All of the above acts simultaneously. All factors make adjustments. You have to do what you know how to do, as best as possible. Focus. I am a mechanical engineer. I need to know market trends. They can adjust a product, but if I have a goal of 4,000 units in 2028, it cannot stop me. All benefits, team motivation, key KPIs are created for this goal. You should not be scattered. I am an engineer by education and by vocation, so I try to do what I know how to do with the highest quality. Political risks are for everyone… Diversification of markets is an indicator that shows whether the company will survive and develop. Export opportunities are an argument in times of globalization.
– So you are spreading your wings?–You also can’t spread the wings too much – they will burn in the sun.At this stage of my life experience, it is also quite dangerous to grow into some kind of megacorporation. Corporations have a hard time surviving temporary cataclysms. The same Wielton SA, one of the largest Polish automotive groups, has huge problems. When 20 thousand trailers are produced per year and the market drops by 70%, the manufacturer finds itself in a terrible situation. It is impossible to find a new market, even Africa – there are no trucks there that can pull such trailers.
Loans or own working capital?
– Of course. Such corporations have huge loans, which can lead to bankruptcy… Loans are an opportunity for rapid development, but they also carry huge risks…
– The Polish company “Zavodu Kobzarenko” is built on European loans, the Ukrainian one exists on its own working capital. We – as Ukrainian engineering – are lagging behind the European one, we need to catch up, they are far ahead in terms of machine tools, technologies. We will cover this distance with our own funds for a very long time. Laser cutting of metal is high quality, appearance at exhibitions, etc. You may be surprised, but the price is not in the first place, the price is somewhere in the third or fourth place. People look and buy with their eyes. People appreciate quality. Quality always wins. If the quality meets the price level, the manufacturer will always be successful. Recently, I saw a harrow manufactured by “Agromash-Kalina” in Romania – I was pleasantly surprised, there was nothing to complain about. The structural tongue-and-groove connection is made with high quality, high-quality painting. I am proud of it! The parts are not made with a gas cutter, you need a laser, they are not bent with a hammer, you need a sheet metal bending machine. Yes, you can develop at a comfortable pace, but you have to watch out so as not to be left in the last car.
There are Ukrainian machines. Not many, but there are.
– Now the trend towards deindustrialization has had a detrimental effect on all industries… There is no machine tool manufacturing left in Ukraine…– Yes, you are mistaken. In the center of Ukraine there is the Aramis enterprise, they produce laser equipment. The company is developing. There is also a company that produces crane beams in Kyiv, KZPTO. I don’t know of any Ukrainian lathes. State policy in the last 15 years has been aimed at destroying mechanical engineering for incomprehensible reasons. Now it’s too difficult… There is the HAAS lathe manufacturer, an American one. There, the technologies within the production are so developed that they make an inexpensive machine tool flawless. Polishing of guides, drives – everything is high-quality. The Federation of Employers of Ukraine appealed to the Japanese government: instead of helping with grants, order machine tools from your machine tool builders and bring them to Ukraine. The formula for powerful integration may one day be like that. We are trying, for our part, to do everything for the economy and development of the state, we look at European requirements and trends. If the Kobzarenko Plant becomes a European “starter”, a leader in bunker-loaders, and we can install a robotic line that will weld them cost-effectively, everyone will win.
Serhiy Slyusarenko, Director of the LLC “Zavod Kobzarenko”
Previous directors set the bar high
– What is the current demand for bunkers? Is production busy?
– The bunker market is becoming saturated quite quickly, but so far the demand for our bunkers remains stable, albeit without much growth.
– Is it competition that is slowing down the growth of demand or a combination of factors: war, reduced yields?
– The war, of course, affects everything… The area of agricultural land has decreased. However, the paradox is that we make high-quality, reliable equipment that lasts for many years, so market saturation also has a significant impact. If you make reliable equipment, people will buy it less often while they are using an old product. However, if you make poor-quality equipment, it is much more harmful to the manufacturer’s reputation.
– Do large holdings take your bunkers?
– They take, about half goes to dealers, half to direct customers. The Ukrainian plant specializes in all items that the company manufactures. Today we are working on precise fertilizer application, precise pouring systems. We have two areas of engineering and design services: modernization of the existing one and development of a new product.
– How focused is the direction of creating new products? Now, in difficult wartime times, does it exist formally or does it really create new prototypes?
– Without creating a new product, production will stagnate. It is necessary to develop new directions. My personal opinion: the future belongs to large agricultural companies, and this is where we are looking.
– Is it hot in Sumy region? Is it difficult for the company?
– It’s been hot in Sumy Oblast since the first day of the war. It’s been flying here, and it’s flying, it’s good that it’s flying by. However, people, of course, feel anxious… Today, we have about 700 people working in four territories. We have the status of a critical enterprise in terms of economy, the reservation is 50%…
– How are you personally feeling?
– If I’m in a bad mood, how will I be able to manage people? The mood of a manager directly affects the mood of the team.
– Is it difficult for you to be the director after your predecessors, father and son? Is there any discomfort?– The directors who worked before me raised the bar very high, so it is very difficult to meet these standards. However, the challenge is always interesting. The problems with personnel are very acute – with its lack, with qualifications… A lot of highly qualified employees have been mobilized. We are looking for someone to replace people during the absence of mobilized people.
– What are you proud of, what products from your portfolio?
– Our bestsellers, hopper-loaders, give us reason to be proud, the 30-cubic meter is the most sold, but this year the demand for 40-cubic meter has increased. I explain this by the fact that there are layoffs everywhere, large companies are buying. Tractors are becoming more powerful. Farmers are trying to compensate for the lack of workers by increasing the productivity of equipment. I hope that if everything is more or less the same in Sumy region, there will be sales and production this year. I think our enemies will not go any further than now.
Yevheniy Khrystenko, Head of Sales Department of LLC “Zavod Kobzarenko” in Ukraine
We are waiting for a boom after the war
– They say sales is not about marketing, it’s about relationships…
– Exactly. I am just leaving from a visit to a large biogas company. They showed us the processes, shared their experience, and this will help us to qualitatively improve the design of a tank with an accurate spout. And, of course, build relationships. Our hydraulic engineers got acquainted with the features of the technical process. Differentiated application, application according to standards. The need for these tanks is enormous, this company alone needs 30-40 tanks per year. People are meeting the needs, showing technologies. This is a synergy of two Ukrainian companies. However, tanks are needed both for transporting water to the fields and for mixing chemicals.
– What sells best today, what is in active demand?
– The direction of organic spreaders is developing well, also with precise application. But in logistics, the direction of container tippers is interesting. They work on grain logistics, transporting containers to ports. Last year, we developed the TOR-20. The tipper places the container vertically, which makes it possible to fill half a ton more with grain than with horizontal filling. The efficiency increases by 500 kg per container. We sold 2-3 units, eliminated the shortcomings, and now we see a prospect in the fact that farms can place this tipper near platforms and ship to the port.The container is sealed, so this could solve the transit problem due to farmer protests, because grain can be dumped from the hopper and sold, and the sealed container is guaranteed to go to the port and out of the country.The bunkers are sold stably, without surges, since there are already many users of our bunkers in Ukraine, and they have a long service life – up to 12 years. However, there is an active demand for dump tractor trailers, those who used to transport grain with KamAZs – now they take a tractor, a 20-ton dump trailer and transport it. And motor transport protects our land… The situation on the market has improved, it is raining, we are waiting for the harvest. The market is alive. People are interested, they plan to replenish the fleet of equipment. For several years of war, people did not invest in equipment, the fleet became obsolete.We hope the war will end and there will be such a boom that we will have to open two more factories!
