Read inspirational stories of the Dnipro cardboard manufacturer, which found partners from six EU countries at the exhibition in Italy, the owner of the largest plantation of organic blueberries in Kyiv region, which after the trip to Chile under the EU4Business initiative is going to conquer the markets of Asia and the UAE; manufacturer of stylish lunch-bags Pack & Go, which are sold in Poland, the Czech Republic, Austria and Australia.
In 2013, the Dnieper businessman George Ardoteli bought a vacuum cleaner. When he brought the package home, his daughter was very happy with the new toy – a cardboard box from a vacuum cleaner. She began to make a fairy castle from the packaging. “I decided: why not make a chair out of this box and tell my daughter that this is a throne,” recalls Ardoteli. The joke was a success. Like the throne. Both the daughter and the entrepreneur himself sat on it. The stool surprisingly withstood the weight of an adult man. Then the entrepreneur conceived the idea – to make furniture from cardboard.
George Ardoteli began to act. To begin with, he conducted a monitoring of the market: he phoned furniture factories and asked if they were making cardboard furniture. And everywhere he received a puzzled rejection. “At that time, no one was engaged in similar business, and I decided to try,” recalls George.
The startup capital of the company at the end of 2013 was about 15 thousand UAH. With this money, a businessman bought a cardboard and hired a designer. He invented the form, and the designer decided how to fold the product from cardboard in practice. The first year the company spent on experiments. Employees tested how the cardboard will behave in various conditions and how to ensure that the furniture does not fall apart under the weight of a person and does not soak from the rain. The solution found was extremely simple: the cardboard was laminated or coated with a special water-based paint. Thanks to this, cardboard tabletops withstand loads of up to 300 kg and can be washed like ordinary furniture.
It is indeed really to increase business performance when working with the European market. The European market – that is 500 million new consumers
The first order of a Futufu (future furniture) – the furniture of the future – is due to the occasion. A friend of an entrepreneur came to the office of the company and told us that in his city they plan to open a small call center and need furniture there – 25 sets of tables and chairs. “We calculated everything, made a test sample, and the customer liked it,” says director of the Futufu. It would seem what 25 sets of office furniture are? For furniture production, it is nothing at all. But at that moment there were neither equipment nor employees in Ardoteli’s company. I had to call all friends for help. Together they manually cut out the necessary parts from the cardboard. The order was fulfilled on time, but I didn’t want to repeat this “feat” anymore. “I realized that it’s impossible to work without equipment,” says the businessman. The technique was needed. And then a cold shower was waiting for Ardoteli. The cost of machines for cutting cardboard was more than $150 thousand. There was no such money.
But the businessman did not plan to stop. Together with a partner they decided to make the equipment on their own. “I watched a bunch of videos and read all the forums on this topic,” says the entrepreneur. As a result, in a month we managed to create a machine for cutting cardboard, spending for this only $12 thousand.
The appearance of the equipment was a turning point in the company’s history. “We realized that now we have a serious production. Immediately we hired new workers – there appeared a machine operator and a painting department where we paint the furniture.“
The number of orders began to increase. The sales growth was influenced by a creative advertising move: the Futufu offered the company’s products for conferences. Often free. Thus, Ardoteli got acquainted with potential customers who were convinced: the cardboard furniture is real.
The company completed the first year of operation with a turnover of about 150 thousand UAH. In 2017, the Futufu rented a workshop, increased the number of employees, and built another machine for cutting cardboard on its own.
In 2017, they created a department that deals with children’s furniture. More precisely – the houses (lodges) made of cardboard. This product immediately hit the shelves of the “Epicenter”. As an advertisement, George simply recorded a video on the phone, where he and his son were making a cardboard castle. “It was in the high season, before the New Year holidays, and people began to be actively interested in and buy our products,” says the businessman.
In 2018, a Ukrainian company with a turnover of 80 thousand euros per year began to expand horizons and look for new sales markets. Representatives of the Futufu went to the profile exhibition in Italy. The result exceeded all expectations. Children’s products of the Ukrainian furniture makers are of interest in Europe. The businessman says that he has already passed successful negotiations with partners from six EU countries and the Ukrainian company is engaged in adapting its product to each of these markets. “Many entrepreneurs are afraid to enter a new market,” George notes, “but I assure you: you shouldn’t have. We did not feel any problems during negotiations with partners from other countries. It’s important to just make a high-quality product.” According to Ardoteli, in 2019, he expects the company will gin up both in Ukraine and in the markets of the European Union.
It is indeed really to increase business performance when working with the European market. The European market – that is 500 million new consumers. In addition, the result of the work of Ukraine – EU free trade zone was the abolition of customs duties. Thus, the Ukrainian goods have become cheaper and, accordingly, more competitive in the European market.
Ivan Grechkovsky, director of Family Garden, a company specializing in the cultivation of blueberries, also plans to use the benefits of working with the EU markets. He started his business in 2016. Then Grechkovsky just graduated from the MBA (Master of Business Administration) program at the IE Business School in Madrid and was looking for an opportunity to change the profile of his activity – before that, the businessman worked as a lawyer.
“Ukraine is an agrarian country,” Ivan says about why he chose such an unusual line of business. “I spent a lot of discussions with European colleagues, analyzed the market and decided to engage in the cultivation of blueberries, to focus on organic production.”
Business started from the small: 5 hectares of raspberries, 2 hectares of honeysuckle and 10 hectares of blueberries were planted. Start-up capital accounted to their own savings.
From the outset, the Family Garden has positioned itself as a company that is 100% export oriented. After the first year of work in the company, they decided to expand the team and seek external funding. In autumn 2017, another 30 hectares of blueberries were planted, in 2018 – another 100 hectares. “Today we have the largest organic blueberry plantation in Ukraine and one of the largest plantations in Europe,” says Grechkovsky. Up to 30 people worked at the first bedding in spring 2017. In 2018 – more than 150 employees.
The staff will expand further. According to the businessman, next year the company plans to build its own refrigerators with a sorting and packaging line, so new workmen should be employed. The entrepreneur does not disclose the income, explaining that the cultivation of blueberries is a long and laborious process, so it will be possible to talk about any serious financial results only after a few years. “With proper care, blueberries bear fruit for more than 50 years. We have the most modern automated irrigation systems. We are the first in Ukraine to receive the Global GAP certificate for our organic products,” the businessman notes.
Within the framework of the “Eastern Partnership: Trade Readiness – Initiative of EU4Business” project, which is implemented by the International Trade Center and financed by the EU, the “Yagodovodstvo of Ukraine” Association organized a trip to Chile for Ukrainian berries-exporters to help companies learn from the experience of a more successful country. The purpose of the trip is to strengthen the competitiveness of Ukrainian companies that cultivate and export berries. During the week of the trip to Chile, the Ukrainian entrepreneurs visited more than 10 farms and enterprises engaged in blueberries.
“In Chile, they adhere to the “cold supply chain,” says Ivan Grechkovsky. “Before the trip to Chile, I did not understand how they were transporting the berry to China for more than 40 days, only then they pack it, deliver it to stores and sell it. After what we saw and heard, we will consider in our company the possibility of exporting to more distant countries, such as Asia and the United Arab Emirates.“
Now, the Family Garden company is aware of the direction in which world leaders are developing technologies for growing, harvesting and storing berries, and is planning to use this knowledge to increase exports to the EU and other countries.
Food without problems
Yana Gavrilitsa, the co-founder of Pack & Go company, in distant 2014 drew attention to the fact that in Ukraine it is impossible to find stylish and at the same time comfortable lunch bags (bags for transporting food). “Most people take their lunch with them to work. We decided to make comfortable and beautiful lunch bags,” says the entrepreneur.
Yana Gavrilitsa invested in the business more than $20 thousand of start-up capital. For this money she bought equipment for printing on the fabric and bought the fabrics themselves. The largest order in the first year of the Pack & Go operation came from the Ukrainian IT-company. Then, in a short time, Gavrilitsa and her team had to create 700 lunch bags. Still, at first there were few orders and the equipment was idle. I had to sell the equipment cheaper than bought, and completely switch to outsourcing.
The main advantage of the Pack & Go lunch bags is the ability to retain both heat and cold. The bag consists of three parts – durable fabric, thermal interlayer and rubberized fabric. Because of this, it does not leak and does not let in smells.
In 2015, the businesswoman dispersed with her business partner with whom she created the company and bought out her share. Gavrilitsa calls this moment a turning point in the company’s history – it was then that she decided to focus on the foreign markets development. “We started looking for partners in other countries,” says the owner of the Pack & Go.
Yana Gavrilitsa explains that when scaling up a business to new markets, it is more accurate to share profits with external partners, but at the same time shift the work on promoting products and settling formalities to them. In fact, the Pack & Go simply sews off products for foreign markets, while distributors do marketing and logistics. Thanks to this scheme of work, Gavrilitsa managed to enter the markets of Poland, the Czech Republic, Estonia, Austria and distant Australia. For these countries, the products made in Ukraine are very interesting for the price – they are several times cheaper than their counterparts. In addition, according to the entrepreneur, made in Ukraine – this is fashionable. In fact, the number of inspiring cases, when Ukrainian entrepreneurs managed to enter the EU markets, without having significant turnover and marketing budgets, are much more than described in the Focus magazine material. As we wrote above, the main advantage of the European countries market is a large volume of the common market, which has uniform requirements. Therefore, bringing the product to conformity with, say, the requirements of Polish regulatory authorities and obtaining the necessary certificates of conformity, then it can be sold without any regulatory restrictions in all countries of the European Economic Area.
Naturally, everything is not as rosy as it may seem at first glance. The flip side of the clarity and simplicity of regulatory requirements is high competition in European markets. However, in this case, everything is decided by a successful business idea and a deep understanding of the business specifics – ways to reduce costs and ways to quickly scale up production. And here the strongest wins.