Kobzarenko spreads his wings
An interesting article with the director of the Kobzarenko Plant appeared in ZERNO magazine! Don’t miss it, read it on our website.
The Kobzarenko plant turned 30 this year. And this year, on the last day of summer, the second stage of the plant in Poland was solemnly opened – a spacious modern production facility with an area of 4,000 sq. m. Many guests from dozens of countries gathered and Dmytro Anatolyovich Kobzarenko solemnly cut the symbolic red ribbon attached to the hooks of the crane beams. Spectacularly in clouds of decorative smoke, the tractor took out a new product – PBN-50, a trailer-loader on tracks. The equipment is painted in a military motif, where the metal of the tracks is proudly embossed – MADE IN UKRAINE.
Dmytro is the same age as the factory, he is also thirty. He is a new type of leader, intellectual, open, sincere and energetic, he has a Mozartian physique, he moves like a jogger. And to smile, he doesn’t need to make an effort, he just shakes hands and smiles.
However, he was destined to continue the construction of the Polish plant, which his father had begun in 2016, and he coped with this task brilliantly. Kobzarenko’s Polish plant is impressive – in scale and space, potential and prospects. Unlike most European plants, densely packed with structures, large-sized equipment moves freely here and people feel at ease.
The Polish project is a continuation of the Ukrainian one
It’s a big deal – everything is different in Poland: legislation, conditions, economy, prices. However, we managed to develop two Ukrainian factories.
It’s a good thing we were lucky enough to talk the day before, as dozens of people and hundreds of guests wouldn’t have allowed us to sit down as a family and reflect on what we’ve done and the future.
– I see a lot of your equipment in Ukrainian farms today. Even though there is a war, I see that the demand for it is growing.
– Yes, the Kobzarenko plant has always actively responded to the needs of farmers. We are currently developing a demining device – this is relevant for many farmers, the queue is long. With partners, we are also developing humanitarian deminers based on remote-controlled tractors. We have scoured this topic – none of the private demining operators currently provide farmers with the appropriate certificates. Only the State Emergency Service issues a certificate, but it does not guarantee anything. If the tractor blows up – well, sorry. We bought a T-156 tractor, equipped it with a chain rotor, cut off the cabin, covered the wheels from debris and are sending it to a testing ground, for testing. I hope that in a month such equipment will go to help farms in response to requests…
– Let me ask you this: how much resource did the Polish company take from you – of course, financial, energy, but also – internal, managerial? How much blood, nerves, finances does it consume?
– The construction of the first workshop cost 5 million euros, the second – 4 million euros. All this was carried out with the participation of subsidies from the European Union. The first workshop was subsidized in the amount of 20% for the building and 50% for the equipment without VAT, the second – 50%, the building and equipment. All this is implemented very competently in Europe. A separate account is created in the bank – I don’t even see this money. I take out a loan, I don’t even have my own money. That is, the first and second buildings were built with loan funds. And the European Union, through the Polish Agency for the Development of Entrepreneurship (PARP), deposits money into the account, reducing my credit load.
– They probably require a lot of documents from the borrower?
– Of course, we must have patents, a detailed description of the project, conditions for workplaces, how many people should be hired. Patents, by the way, are not cheap. We started writing the project for the second stage in 2020, and received a positive result already during Covid, somewhere in November of the same year. We spent the entire 2021 coordinating the building project. We started laying the foundation in 2022.
– Was the workshop already standing? Was the first line already operational?
– Yes. In the first shop, we started welding work on April 9, 2020, and five days later Poland closed its borders due to Covid. And for the second one, there are still no permits. I’m waiting for a month. It’s not like in Ukraine. Here you can enter the shop, as long as the roof is up, they turn a blind eye to everything. Here, they are very strict with compliance with the requirements.
– And how was the energy, communications, and water supply taken care of?
– In general, the procedures are similar to the Ukrainian ones. We waited a long time for a decision from the monopolist. We have to wait a year for permits for electricity, for emission quotas. Paperwork is a good word that describes it all. So, in 2020, the workshop was put into operation, they started working in it. And immediately we sat down to write the next project. We expanded another credit line. I came to Warsaw to defend my diploma – the commission decides whether to give you money or not. The first loan is for 10 years at 2.8%. The second is on the same terms.It is clear that a plant in Europe is an expansion of the capabilities of the company and its plants in Lipova Dolyna and Romny, but – why Poland? I formed my opinion precisely when visiting the Kobzarenko plant in Kleszczów. Already in Radomsk, at the nearest railway station, I saw the grandiose JYSK logistics center, an enterprise that occupied square kilometers. This is the gateway of a huge Swedish company far from Poland – to all of Europe. Industrial zones have been created around any town, where enterprises and logistics warehouses of world-famous companies are deployed. The pulse of these routes to Europe through Poland means that the country is powerfully increasing GDP against the backdrop of a recession in Europe. The figures are impressive: in 2021 – 6.8%, next year – 4.9%, and this year experts predict a double-digit figure. Developing in rapidly growing markets is extremely promising.
“I don’t break, I build”
– Have you already mastered Polish, do you speak it, do you write it?
– I speak well, but I don’t understand dialects very well yet. The notary used to require an interpreter to work with me, but now, when I sign documents, he has lifted the requirements – he sees that I understand everything. I speak to all authorities without an interpreter, no one travels with me anymore.
– However, how much mental health and energy does bureaucracy consume here? Because in Ukraine, a person who starts production must have colossal reserves.
– At first it was difficult. People have an unusual mentality, you had to get used to it. In Europe, employees have many rights. For example, a person worked for me for a week, then he can go on sick leave for a month, and I pay for it. It made me terribly nervous, in Ukraine it is somehow easier. At first I talked to many businessmen about it: how do you deal with this? It turned out that bonus funds level it out. Energy costs increased wildly after the tragic events, the loss of my father, the workload increased a lot. Because the Polish plant could be pulled, there was enough time for personal life. Adding Ukrainian production greatly changed the distribution of forces. I began to rebuild the parental system. Because I wanted to do things differently. Perhaps every manager who comes after me will change everything to suit himself. I did not want to break the system during the reform, so I supported it very carefully at first. Now the format of small changes has already been chosen. Changing personnel policy, more real evidence that I am not breaking, but building. And less than a year has passed since the war began. There is very little rest. You don’t have time to recover during the weekends. Your physical health is declining, but your mental health is still lacking.
– An entrepreneur differs from an employee in that he has no days off, no lunches, no vacations. I once had such times when I worked 16 hours a day. And when things are well-established, the system works, then you get a few years of freedom. At what stage are you now? Today you are a European manufacturer. Can you be compared, for example, with Fliegl?– Fliegl is six factories in Europe, a powerful production on the path of progress. The same Pronar produces 6,000 units of trailed equipment, and I produce 2,200 at the Ukrainian and Polish factories together. Only the Polish one produces 200 units per year. I have an ambitious goal: by 2028, two enterprises will produce 4,000 units of equipment. Doubling in a year is unrealistic, but by 2028, strategically, without losing quality, I will be able to do just that.
From idea to product – three months
– Your father’s main approach: to do what people need. And people’s needs are constantly changing. A vivid example is your firefighting complexes.
– There was a niche, we entered it, we produce this important equipment for farms, yet a tank with a water cannon, a pump is six times cheaper than a fire engine. This year we have two global directions – grain logistics and livestock. We see the situation and adapt to it. We made a container for liquid manure of 100 cubic meters for one holding. At the same time, we created a European version with a smaller cubic capacity. Before that, we released a small flail manure spreader – this was a request from Bulgaria. As experts know, there is not much of such equipment in Ukraine. The second direction is grain logistics. On December 20, I spoke with engineers, and on March 24, we were already shooting a video of us testing a container tipper. The idea was that the grain corridor was closed, it had to be transported abroad. Hopper wagons have been waiting in queues for two months. And I loaded the sea containers, reloaded them from wide to narrow gauge – and it went. Last year there was a terrible boom in reloading machines. The Italians let us down with the gearboxes, they were late in fulfilling the contract. However, there was active demand for the equipment. The video was posted on Monday, and on Thursday the first machine was already sold. Now two more have been sold and two more are being manufactured. I think our product will create a new grain corridor. It just takes time for farmers to see for themselves the logistical economy of this solution. A container is a very universal thing, you can even seal it, and the container infrastructure in Europe is developed dozens of times better than the elevator infrastructure.
– Do you still have barge loaders?
– Yes, this is the second direction on which we focused. We are closing the railway with a container turner, the road direction with grain carriers, so we had to respond to changes in water logistics. We had a belt loader for 180 t / h, but after a dialogue with large holdings we received a request for “7000 t / day from the shore”, because the terminals were bombed, you can’t restore the elevator in a day. Therefore, while in Romania, at the port, I saw what we needed to develop.
– Is all this done in Lypova Dolyna?– Yes. In Poland, only mass products for Europe are produced. Work here is more expensive, taxes are much higher. For just one building and my own land of 5 thousand sq. m, I pay a monthly tax of 10 thousand zlotys. So all subsidies here are very intensively reflected in taxes. The Poles have calculated it all, it’s a long game. And it gives results. We see that two years ago Poland adopted the Estonian option: you don’t pay income tax while you invest. Taxation begins when you pay dividends, withdraw profit from capital. We invest in expansion, it’s only a plus for us. And they don’t receive taxes now, because I invest money in production, buy machines, create jobs. Everyone wins: me, the community – everything is very positive, very transparent. Poland also didn’t come to this right away.
A paradise for designers
– What is the factory like today?
– 5 thousand sq. m of production space, 52 employees. Another 4 thousand sq. m will be added in a month. This is a full localized production cycle of tractor trailers. We also produce four models of bunker loaders, bale trucks and grain packaging equipment here.
Dmitry showed me around the new factory, and I just opened my eyes wide: a 12-meter ceiling with crane beams, the space and scope were impressive. I have been to many European factories and everywhere the area was used to the maximum, there is practically no free space or field for free design thought there, for the creative process or new ideas the designer has to go into the real field, and here you can think and act practically in the shop. Although there was no shortage of equipment: a truly unique sheet bending machine for 7-meter parts, a laser metal cutting machine capable of simultaneously performing operations on two 6-meter sheets of metal. A rather expensive machine for removing burrs – Dmitry showed sealing for sound absorption, because many kilograms of metal parts rotate in the machine.
There was enough air – it really made an impression, and large-sized equipment (such as the 12-meter Atlant sliding semi-trailer) looked quite compact in the new workshop.
However, we started with the office, and there Dmitry proudly showed a unique computer complex of the designer with a complex manipulator. A young team of designers, people with great imagination and a penchant for unexpected solutions – a special treasure of the company, and Dmitry pays them as much attention and care as possible. In general, he said that, when hiring people for the Polish enterprise, he initially tried to find cheaper labor, but this concept had to be abandoned in favor of professionals. Today, only a true professional with the right motivation and great loyalty to the company can come to the enterprise.
It became clear how difficult it is to build a factory in Europe. The plot of land that the commune sold to Kobzarenko was crossed by a power line. Two poles had to be removed and the line laid underground. In addition, a sewage treatment pond was built at the factory, the filters and pump of which need to be regularly maintained. The workshop itself has air conditioners and a heated floor, and a gas boiler. As Dmytro said, gas is cheap here, and the heated floor is good for assemblers, who mostly assemble components on the floor. Here I felt that a real father was being born in the factory. A real master.
The project is at the start, but profitable
– Is this the final project or can there be further development?
– The new workshop will add eight more jobs. I have the opportunity to launch a second shift, but there is no such need now. The market in Europe has really slumped. That is, the Ukrainian market is booming during the war, we have an order for 100 trailers from just one holding. And Europe is sitting quietly now, very quietly, because of low grain prices.
At exhibitions, my dealers were afraid that Polish farmers would be angry when I hung the Ukrainian flag. Farmers are indignant, but they buy the equipment. I had no choice with the flags – the flags were flying, although anti-Ukrainian sentiments still occur among farmers. They are waiting for subsidies, grain prices have fallen, the Polish Minister of Agrarian Policy was almost kicked out of the exhibition by farmers. I have now changed my focus somewhat, I am focusing on the German market. In Europe, our dump trailers were doing very poorly, we need to change this trend. However, municipal equipment did well.
– What type of municipal equipment?
– Small trailers for 4 – 6 tons, three-way dump trucks.
– What equipment is in your factory?
– As I said, this is a full cycle: metal saws, plasma, a very steep 7 m sheet bender. I want to buy the same one for Ukraine. Thanks to it, we can do without many welding seams. A full set of lathes, milling machines, grinding machines that can process large diameter pipes. Welding, painting, assembly. Unfortunately, today we need to have complete independence from parts from Ukraine – because of problems at the border. And my plant will definitely not stop.
– Aren’t labor problems pushing for robotization?
– I have been thinking about this topic in my head, reading books, analyzing information for four years now. I really like the ideology of lean production, and my team is also learning it. Robots make sense when there is a lot of demand. When you don’t have time to make equipment. If everything is going well for you, if you produce a hundred trailers and can sell a hundred trailers, why increase capacity? I want to emphasize that production planning is based on market demand – and that’s it. Okay, I’ll replace a person, install a robot, and start producing more. But why do I need more if the market won’t “eat” it? I’ll also have to increase the cost of the equipment due to the cost of robotic production units. And the client will pay for my inefficiency. Yes, the robot doesn’t get sick, but it needs to be serviced and programmed. A person is still needed for this. When the market grows, then we can talk about it. So far, I don’t see the point in this. I have an automatic powder coating line in my new shop. The question arose as to which shot blasting chamber to choose: automatic or manual. The automatic one guaranteed volumes four times larger than the coating line could handle. Why pay for it if the bottleneck is elsewhere?
– Is the Polish factory profitable at all?
– Yes. This is not only production, but also retail. We also sell Ukrainian equipment here. Therefore, there is a profit. We pay off loans.
– For me, Anatoly Dmitrievich is always somewhere nearby. What would he say about all this?
– He would say: “Mityka, the bomb!”
– What is your relationship with the local authorities?– Good ones. We went fishing once with the mayor. We caught some fish and fried them. There is no feeling, like in Ukraine, that you have to bow down to a politician. There is no sense of corruption. I wanted to bring a gift of sweets and tea to the employee of the police station who helped with the work permit for the employee. The accountant told me that I would only give her a headache, because people would have to write reports about this.
Creating a strategy
– Regarding international cooperation. At the machine-building plant, I asked if it was possible to buy something made in America in the USA at all? I was told that then I would have to buy an American tractor. However, on the huge wheel of this tractor it will still be written Made in China. Do you have a lot of Chinese at your plant?
– Very few. Except for reflectors. We even buy headlight bulbs in Poland. A lot of things are Italian. There are Indian ones, the same wheels.
– Do you like what you do?
– Yes.
– Do you see yourself as a European manager?
– We are currently working with a business trainer from a business college. He once told us that when the owner is too deep into a business, it harms the business. I currently own a Polish plant, a Ukrainian one, a production of trailers and sandwich panels, a service station, and another 300 hectares of Kobzarenko-agro. If I delve into just one plant, everything else is still there. That’s why you need to stand a little higher. It’s about delegating authority. The largest business among them is, of course, the Kobzarenko Plant, so I can’t currently entrust the management of this particular link, the risks are too great. I’m interested in managing several areas. I recently had a conversation with a client who has 4,500 hectares in Poland, his own utility company, where over three hundred people work, he builds roads, and has two cement plants. He is a person with a broad outlook, I learn from such people, because big business doesn’t focus on just one thing! And diversification. My father predicted that the demand for bunkers would fall three years ago. And it is growing. And the competition is growing. It is a very tight market. On the other hand, the equipment is always being updated, and our goal is to find those markets where the client will buy for the first time. And then he will exchange the worn-out equipment for new ones, and the wheel will turn.
– Why do you think the opening of the plant is a celebration? Why do you invite guests, in particular?
– This is definitely a large-scale event that will determine the development of the company for years. I was in Canada near Niagara Falls, and I really wanted my wife to be there. Because an unrequited emotion does not give such joy. It is also important to show dealers that we are growing. There is production, there is a warehouse, there is growth potential.
– Is there a strategy? For the development of Polish enterprises? The world is changing rapidly now, even investment approaches. A period of very high unpredictability. Unpredictability has become normal. How can we build a strategy, a line of dynamic movement in Polish territory, in such conditions?
– Poland is my second country in terms of sales, the first is Romania. Anyone can make a product, you just try to sell it. That’s why I spend most of my time looking for sales markets. How to get a foothold in new countries? How to solve the same homologation problem? A certificate for just one type of trailer costs over 10 thousand euros, plus the work of specialists. This year, four trailers were sold to Croatia, because they made certificates. Once upon a time, we had Russia, the largest export market. More than Romania, Poland and Germany combined. 8 million euros out of 60 million in annual turnover. However, Russia no longer exists. Now I need to load these production capacities. The strategy of this plant is that I can plan here. It’s difficult to plan in Ukraine. The S-300 will arrive…
– There are a lot of small farmers in Poland, millions of them. Don’t they also need some kind of equipment?
– They don’t need the large equipment we make. That’s why we focused on grain logistics and municipal equipment.
– What about your aluminum bodies? I remember that mastering aluminum welding was a matter of pride; it was a sensation at the Ukrainian exhibition at VDNH.– Bodies are coming, but so far without rapid development. The market was very badly hit by the termination of state compensation for domestic equipment. We make 50 units per year. This is a very unprofitable direction now. My father might have closed it. However, I see the future of this product in the medium term.
Leadership style
– Do you manage as a soloist or as a team player?
– Yevhen Dudka once told me: “First the motive, then the goal, then the structure.” So I tried not to touch the structure, but I started delegating tasks to people right away. My father’s leadership style is a “red leader.” Everything was up to him and he was responsible for everything. It doesn’t drive me. People get paid, and they have to be responsible. That’s why I gradually set tasks and watched how they were carried out. However, war corrects everything. Two senior officials from my structure were taken into the ranks of the Armed Forces of Ukraine: the head of production and the head of sales. If you need a right hand to shoot, then they cut off two of my fingers. However, even with the difficulties that the employees took on, they didn’t abandon me to my fate and trained me in advance and found people to perform the duties. As long as it was possible, they came to the plant every day. As of today, 140 people have been taken from the plant, unfortunately, three have died.
Yes, this is a holiday in the middle of a great war, and Ukraine is paying a huge price for its independence and defending the whole world from the aggressor.
The celebrations began with a speech by Dmitry Kobzarenko, in which he thanked dealers and partners, builders and designers, and briefly told the story of the company and its achievements. Only for a moment, when Anatoly Kobzarenko’s face appeared on the big screen, Dmitry paused, tears welled up in his eyes, and many of those present experienced an emotional shock. However, the celebration continued, and the founder of the company and the new plant would be proud of how his descendants conduct business. Dmitry thanked the members of the Kobzarenko family – everyone lent a shoulder and everyone came to the rescue in a moment of need. There was a greeting from the mayor and a speech by the head of the Commune Development Foundation, there were speeches by dealers from Great Britain, Switzerland, Austria, Spain, Germany, Romania, Bulgaria, Lithuania, Latvia, Estonia, and there were gifts in the form of new contracts. The Kyiv band “Taruta” raised the fighting spirit of the festival participants.
And I thought about how quickly the large space of the enterprise would be filled with new equipment and new developments, how quickly Kobzarenko’s factories would reach their dream goal of 4,000 units of equipment, and how quickly they would exceed expectations and forecasts.
We say – on a good path, the Poles say – a wide road. The enterprise has built up its muscles and is ready to adequately respond to the challenges of the stormy present and energetic future. And the future is already on the doorstep, in the third decade of September – an exhibition in Bednar, in November – “Agritechnica” in Hanover, and everywhere there will be Kobzarenko, a Ukrainian, a European.
