A company in Drohobych became the first in Ukraine to launch production of mushrooms compliant with European requirements.
Tvoye Misto continues a series of stories about development opportunities for small and medium-sized businesses in the Lviv region. After the stories about the farm producing elite cheese varieties and the factory producing shoes for European markets, the third story is about Borovyk, an enterprise supplying fresh mushrooms to the largest supermarket chains in Ukraine and planning to conquer the EU market. The enterprise’s cofounder Myron Turchyn speaks about how a magazine article and Dutch experts helped them launch the business, how product requirements are different in Ukraine and the EU, and why Ukrainian mushrooms are more competitive than those grown in Europe.
“Everything has begun back when I was working as a bank director in Drohobych. I read an article in some business magazine in my favorite column “Turnkey Business“ about mushroom growing, and this article has inspired me. I love to gather mushrooms since I was a child, so I decided to turn my hobby into an enterprise,” Myron Turchyn says.
He shared this idea with his brother, and in 2002 they established a family business, the company called “Borovyk”. They bought the first production site in Boryslav, setting up a three-chamber mushroom growing facility there. Later on, Myron Turchyn met an honorary Dutch consul at a trade fair, who offered him the services of Dutch experts in setting up production processes.
“Joga Malensinga came to our production facility. According to a special exchange program, the Dutch party pays consultation fees and we pick up accommodation and meal costs. Having analyzed our performance over the course of two weeks, he concluded that our company requires modernization of production processes. That was true, because before that, we never saw how they grow mushrooms abroad and how this business operates there in general,” Myron Turchyn says.
The Dutch expert invited the Ukrainian entrepreneurs to the Netherlands, where he arranged visits to mushroom growing enterprises. That prompted the Ukrainians to buy another facility and the necessary equipment.
Today, Borovyk produces approximately 100 tons of fresh table mushrooms per month plus dried, packaged and canned mushrooms. The enterprise also produces canned porcinis, chanterelles, honey fungi and milk-caps. For that purpose, they have 16 production facilities with 5 thousand square meters of growing space, a canning shop and a drying shop. Borovyk’s fresh mushrooms are ordered by the largest Ukrainian retail chains: METRO, Silpo, Auchan, Fourchet, Arsen, Rukavychka, Lvivkholod. Among the enterprise’s customers is also Nestlé, which adds dried mushrooms from the Lviv region to its sauces and foods marketed under the Mivina brand. Mushrooms from the Lviv region are also present in Rolton pasta and Komo processed cheese. In addition, the company has small buyers in Odesa, Kharkiv and Dnipro specializing in production of spices.
“We were the first “mushroom” enterprise in Ukraine to receive and implement an international system of hazard analysis and critical control points, or НАССР. All our products come with an international ISO 22000 certificate. Presently, there is only one other company besides us in the mushroom market of Western Ukraine that has European conformity certificates – РІО,” Myron Turchyn says.
НАССР helps identify, assess and control food safety risks along the entire food production chain. The French firm Veritas helped Borovyk implement this system before entering the European market. Studying documents, preparing personnel, lectures and trainings took almost two years. Myron Turchyn says that one of the main requirements in Europe is transparency of production, which allows to monitor and prevent risks that could affect food quality and harm the consumer.
“It is important to make sure that no foreign objects get into food. There are also requirements to the employee’s appearance: they are strictly prohibited from wearing any decorations, and every one of them is required to undergo a medical examination. The enterprise must also have changing rooms, shower cabins and a separate kitchen facility. We do have all that and continue to improve ourselves, for our main goal is to protect consumers for whom we work,” he says.
The entrepreneur said that one day, when mushrooms were dried on metal grills, a piece of grill got into a finished product. Customers from Kharkiv found that piece by a metal detector and returned the entire batch. After that incident, Borovyk has a special device to detect metal in its foods.
Borovyk plans to export dried mushrooms, because they have a long shelf life. They are eyeing, first of all, Germany where there are many companies producing various dressings, spices and also instant soups and porridges.
“The task of every business is to derive profit. In the EU market, profitability is higher. In Ukraine, we sell our products for hryvnias, while in the European market we’ll be earning hard currency,” Myron Turchyn explains.
Borovyk plans to enter the European market as soon as the next year. Nestlé’s Ukrainian production plant may help them with that.
“We made a deal with them: if we on our part fulfill all obligations, implement all European production and product standards, comply with safety requirements and observe delivery terms, they will be recommending us to Nestlé’s other production plants, but this time in Europe,” Myron Turchyn says.
According to Mr. Turchyn, all they have to do in this respect is to improve food safety, while the requirements to food quality and delivery terms have long been complied with.
Myron Turchyn says that Ukraine has a substantial potential for development of the mushroom business.
“In our country, the culture of eating mushrooms grown in greenhouses is only developing. Ukrainians are only beginning to get used to them, as this product has been marketed for only 15 years or so. One European, American or Australian eats much more greenhouse-grown mushrooms than one Ukrainian,” he explains.
The businessman is confident that Ukraine’s mushroom market has a huge potential and can easily compete with European enterprises.
The access of Ukrainian producers to the markets of 28 EU member states with more than 500 million consumers became possible thanks to provisions of the Ukraine-EU Association Agreement concerning the Deep and Comprehensive Free Trade Area. The Agreement came into full force in September 2017, and before that, it was partially applicable starting from January 2016.
Free trade increases business opportunities for the private sector in Ukraine and the EU, obliges Ukraine to harmonize its rules and standards in various sectors of economy with rules and standards of the EU, and promotes the inflow of foreign direct investments into the Ukrainian economy. For Ukrainians, it means higher food safety standards instead of obsolete norms applicable not only to exports but also in the domestic market, wider choice of goods and services thanks to higher competition, new jobs, worldwide recognition of Ukrainian producers and economic growth in Ukraine.
By Mariana Tsymbaliuk
Source: Tvoye Misto