Year: 2019

Blest’s history began over 20 years ago. It is currently one of the largest Ukrainian manufacturers of upholstered furniture that is popular not only in Ukraine but also abroad – in Slovakia and recently in Canada. High quality, a solid reputation and ambitious plans for the future – this is all that Blest is about.

“The very beginning of furniture production was back in the 90’s when it was a modest production in a small garage. The first sofas were sold at the open marketplace; there are even photos of our sofas standing in the snow. The company has not been operating under the same brand over the entire 20 years. We had a few names, the name Blest appeared in 2005”, – says Serhiy Savchenko, owner and director of the company.

 

In the early 2000s, the Ukrainian furniture market wasn’t highly competitive, but the business was steadily developing. Production began and continues at a factory in Cherkasy (Central Ukraine). Production volumes have doubled over the last 12 years.

New trends

The company is currently working in several areas, the main being the production of upholstered furniture in the mid-price segment. The premium segment called Individual by Blest is also under development. At the experimental production site near Kyiv, more expensive sofas and beds are made, the design of which is developed individually at the client’s request. Children’s furniture is manufactured under the Blest Kids trademark.

 

“Trends in the furniture market are changing in Ukraine. Some 5 or 6 years ago, the mid-price segment was core at the market, whereas now more and more manufacturers move towards low-cost lines. Why so? We are moving towards Europe where consumers are not used to spending too much on furniture. The Soviet approach to buying expensive furniture that would serve for 30 years is getting obsolete. Consumers, especially young people, are ready to buy inexpensive practical furniture, which they will replace in 2-3 years with something new and trendy”, Mr Savchenko says.

The company is also actively developing a network of its own showrooms where customers can see the products, choose a convenient model, size, fabric, colors and more.

The company buys almost all materials except for the fabrics in Ukraine. From 2010 the company started to collaborate with the Italian studio Lauriero Design. Besides, Blest company has created a design and innovation service headed by the Italian designer Domenico Lorato.

Export horizons

The next step for the company’s development was entering foreign markets. Like most Ukrainian companies, Blest decided to try its hand at CIS markets – Russia, Kazakhstan and Moldova. The company tried to build a dealer network in Russia and Kazakhstan, but after 2013 decided to abandon development in those regions. Both economic (devaluation of national currencies) and political factors contributed to that.

After 2013, the company decided to refocus on Western markets, although there was no clear understanding what specific market to target.

Through collaboration with a project by the European Bank for Reconstruction and Development (EBRD), a consultant was involved to help Blest identify ten priority export markets including Germany, the United States and Canada.

Way to Canada

In 2017, the company learned about the U CAN Export, CUTIS project export support program for SMEs, and decided to join it and fill a booth at the Canadian Furniture Show.

The participation was preceded by a careful selection by Ukrainian and Canadian experts, which resulted in the selection of 10 Ukrainian furniture companies that represented Ukrainian furniture industry at the largest Canadian exhibition in May 2018.

The assistance of Jacques Nadeau, a Canadian expert of TFO Canada, was specifically valuable to the company.

“Jacques provided us with detailed information about the specifics of the Canadian furniture market and helped us to choose the models that would be worth exhibiting. Otherwise, the company would need to conduct its own research. The CUTIS project did it for us and we are grateful for that”, Viktoria Semenets, Blest Exports Manager says.

Thanks to Jacques’ advice, Viktoria says, the company presented small convertible sofas at the exhibition that could be used both as a sofa and as a bed.

“We did not know the needs of the market and, thanks to Jacques, chose the best option. Furniture trends in Canada are changing. More and more Canadians, especially young people, live in small apartments in condominiums. That is why our convertible sofas fit them ideally”, Viktoria continues.

During the exhibition, Blest products received many positive reviews regarding quality and design. “People lined up at the booth to see us turn a small convertible sofa into a normal double bed”, Viktoria recalls.

The high class of Ukrainian products was appreciated not only by the visitors at the exhibition, but also by the organizers. The Ukrainian furniture booth designed by Sergey Makhno Architects was awarded with the Best New Exhibitor award at Canadian Furniture Show in 2018.

As Ms. Semenets states, thanks to the CUTIS project, not only was the company able to present its products at the largest Canadian furniture exhibition, but it also contacted local Canadian retailers and learned about their product mix.

The main conclusion was that Ukrainian products in the Canadian market are competitive pricewise and attractive due to their quality.

“Chinese companies are among the main competitors for Ukrainian products in the Canadian market. The store owners said that they were not always satisfied with the cooperation with Chinese manufacturers because the quality of products was not very high. Also, not all suppliers were reliable partners”, Viktoria shares her observations.

That is why Ukrainian manufacturers have every chance to occupy a niche of good-quality furniture of the mid-price segment.

“We continue to study and adapt to the needs of the Canadian market. For example, the standard size of mattresses in Canada is one and a half times larger than in Ukraine. It is important to take this into account if you want to develop your presence in the market”, Serhiy Savchenko points out.

What is next?

Through collaboration with the CUTIS project, Blest has found a dealer in Toronto, IVI Furniture, with whom it has successfully partnered for over a year. IVI Furniture has its own showroom in Toronto where products from several Ukrainian furniture manufacturers are presented.

In October 2018, representatives of the Mega Group that brings together about 400 furniture retailers across Canada visited Ukraine and met with Blest representatives. Canadians highly appreciated the range and quality of Ukrainian furniture.

According to Viktoria, the partner company IVI Furniture recently signed a contract with the Canadian online furniture store wayfair.ca. “We are starting our cooperation with this platform, which will be an important milestone for the company to enter the Canadian market”, she said.

Currently, the company ships to Canada a container of furniture per month on average and does not intend to stop there.

 

“Demand for Ukrainian furniture in the Canadian market has increased by 25% over the first 8 months of 2019. Ukrainian companies are very flexible, they are ready to satisfy demanding consumers and adapt their products at the request of Canadian partners. For many Canadian suppliers, price remains a key factor in choosing a partner. Due to the Free Trade Agreement between Ukraine and Canada, Ukrainian furniture is competitive pricewise, so I see great prospects for Ukrainian manufacturers in this market”, Iryna Kobets, CEO, IVI Furniture concludes.

Author – Tetiana Riasna

Do you know what the stylish uniform of the renewed Ukrainian police and a trendy colorful women’s coat have in common? Both of them are sewn by OLTEKS, a leading Ukrainian apparel manufacturer that has more than 20 years of successful experience both on Ukrainian and foreign markets.

OLTEKS specializes in the production of outerwear. Such as coats, jackets, raincoats and more. Production of the so-called costume group – pants, blazers, skirts, and dresses is also actively developing.

The company consists of two garment factories – one in Skvyra, Kyiv Region, and in Pryluky, Chernihiv Region. The company’s production capacity allows to sew up to 15 thousand coats or 10 thousand jackets per month.

Like in most Ukrainian light industry companies, the team’s core (over 90%) are women. The company is headed by a woman, Anna Oharenko, who has managed to assemble a unique team of specialists with years of experience in the industry.

Export development

The company does not have its own brand known to Ukrainian consumers. It used to have a chain of retail stores, but in 2008 it decided to abandon this direction due to the crisis in the country and non-profitability of this line of business, and focus instead on the production of clothing by the customers’ orders.

For the last several years, OLTEKS has been actively engaged in export development. The company’s products are being sold in France, Germany, Poland, Sweden, the Netherlands and more.

The company cooperates with foreign clients both under the give-and-take scheme and sews clothes under private label.

According to her, the volume of private label orders to the European market is still small, but there is a positive trend. “We have reliable partners that we have been working with for several years”, Ms. Ter-Minasyan continues.

Canada. First contact

OLTEKS products are not currently available in North America, but the company is very interested in this region. That is why the company has decided to join the U CAN Export program implemented by the CUTIS project to support exports to Canada.

The company enters the Canadian market with outerwear, primarily, coats, because, as it was mentioned, its factories have been specializing in this group of garments for many years.

“We believe that our products have every chance of attracting potential partners from Canada. Many years of experience, good quality plus reasonable prices due to the absence of import duties on Ukrainian products are our strengths in the Canadian market”, says Ms. Larysa Ter-Minasyan.

On August 1 – 7, 2019, OLTEKS, along with six other Ukrainian clothing manufacturers, visited Canada as part of the Apparel Mission organized by the CUTIS project. The mission took place in two cities – Toronto and Montreal.

All members of the mission were selected by Canadian Apparel TFO expert, Maria Guzman. First of all, preference was given to women-owned businesses that are working to implement environmental certification. All selected companies have undergone training and coaching to understand the intricacies of exports of Ukrainian-made garments to Canada.

 

“The program in Canada was very intensive. Already on the first day, we had meetings with two buyers and explored the market. In total, we met with representatives of seven Canadian companies throughout the mission. For us, this is was the first experience of this kind, and it was a pleasure to feel the full support of the CUTIS project”, says Larysa.

Participants of the mission had a different number of meetings depending on the specifics of their products. The companies not only presented samples but also discussed specifics of the business, production facilities, team, certification, etc.

Myths busters

In addition to business meetings, an important part of the trade mission was to become more familiar with the specifics of the Canadian clothing and textile market.

“In Canada, we immediately felt the difference not only with Ukrainian but also with European markets. It was important to walk through the malls and see what products are being sold in the stores, what clothes Canadians wear, what they prefer. All this new knowledge helps to negotiate with buyers because you can understand much better what samples should be presented in the first place and what may be more preferable”, Larysa reflects.

The main conclusion is that Ukrainian companies need to adapt their products to the demands of Canadian consumers. Moreover, success in Europe does not mean that your clothes will be bought in Canada “like hot cakes”.

What should be the focus?

First, it is the model range and color scheme. In Ukraine, for example, women prefer brighter and more individual models, plus natural materials. In Canada, softer colors are chosen, and the issue of natural fabric is not that important. Convenience, lightness, and practicality of the product are on the first place. Heavy natural coats and outerwear are not much preferred by Canadians.

 

The second “destroyed myth” is a focus on warmer clothes. “We thought that because of the climate in Canada, warmer insulated coats should have an increased demand. But they do not. When it is cold Canadians prefer down jackets, while a coat is more of a warm autumn cape”, says Larysa.

And of course, the importance of the regional factor. Consumer preferences in Toronto and Montreal, that is, in anglophone and francophone parts of Canada, are significantly different.

“We felt that the requirements of Montreal buyers are different from those of Toronto companies. They are much closer to those of our French partners. Given the successful experience of working with France, this is a definite advantage for us. Buyers from Montreal opted for more elegant models and brighter colors”, Larysa continues.

What next?

OLTEKS is pleased with the results of its trade mission to Canada. “We want to develop a private label business, so we are interested in new partners from different countries including Canada. We see great potential in this market. At this stage, it’s important for us to do an excellent “homework” by adapting our products to the specific needs of Canadian customers”, says Larysa.

Communication with Canadian buyers goes on. “We continue our dialogue with potential Canadian partners. For some, we are now calculating the price and shipping cost for the models they are interested in, while for others, we are sewing test samples. We understand that Canada is not an easy market and many contracts cannot be concluded at once”, continues Ms. Ter-Minasyan.

According to her, the company is extremely interested in concluding its first contract, successfully executing it and positioning itself well on the Canadian market. Even if the volume of this contract is not that large.

“We are not set up for a one-time contract, we want to find a client, or even better a few ones, with whom we can work long and fruitfully”, she sums up.

The Skvyra Grain Processing Factory in Kyiv Oblast is one of the most famous cereal producers in Ukraine. Buckwheat, oats, corn, rye, barley, wheat, and millet here become cereals, flakes, flour and raw materials for baby food.

The company traces its history from 1931 to a small grain purveyance point – Zahotzerno. The combination of market demand, efficient management, and constant modernization has transformed it into an international player. At the moment, the Skvyra Grain Processing Factory boasts four-grain processing lines (three specialized ones and one multiline). With significant grain elevator capacity, the company also provides grain storage services to other businesses.

Until recently, the factory focused mainly on the production of non-branded products only. Currently, preference is given to the promotion of Skvyryanka – its own trademark, retail production and cooperation with retail networks.

The company is actively developing its export destinations – up to 40% of products are shipped abroad.

Previously, the company sold large volumes to Russia. Since 2014, the factory has diversified its sales markets. Therefore, products under the Skvira brand are currently sold in Europe, Asia, and Africa. Among the customers of the plant, there are such well-known food manufacturers as Nutricia, Nestle, and Bebi.

“Quality at an affordable price is the formula of specificity of our products in the global markets”, – comments Ihor Kotsel, the company’s commercial director.

Since 2012, the Skvyra Grain Processing Factory has been working with organic raw materials.

From the very beginning, foreign demand has become the driver of expanding the range of organic products. The main suppliers of organic raw materials for the enterprise are agricultural enterprises from Lviv, Rivne, Chernihiv and Zhytomyr regions.

Skvyra Grain Processing Factory LLC successfully cooperates with Canadian companies that buy Ukrainian products and sell them in many markets, especially in Asia. It was the Canadian partners’ interest in good-quality organic products that prompted the company to get certified in accordance with Canada’s organic standards – COR.

In 2019, the CUTIS project co-financed the company’s receipt of a Canadian organic certification. In this way, the project supports Ukrainian small and medium-sized enterprises in conducting sustainable business practices.

Moreover, Canada’s organic market analytics provided by the CUTIS project forced the company to look more closely at this country. At the moment, Skvyra Grain Processing Factory LLC is establishing direct deliveries to the “maple leaf country”.

The example of the Skvyra Factory once again proves the prospects of deliveries of Ukrainian organic products to Canada.

You can find more about the company’s experience and the history of its entry into the Canadian market in the video.

Agroecology, an agricultural company based in Poltava region, is one of the largest organic producers in Ukraine. Agroecology is a vivid example of how millions can be earned on organic production and environmental protection. Moreover, not somewhere abroad but in our country, in the Ukrainian countryside!

The company represents a complete cycle of agricultural production: from the cultivation of grain crops and oilseeds to the sales of dairy and meat products.

The company’s food products can be enjoyed both in Ukraine and abroad. Agroecology is actively developing its exports via fruitful cooperation with Canadian companies, among others.

Quality mark for decades

The company has more than 40 years of experience in the organic sector. Hardly any other Ukrainian company could boast of this.

Everything began in 1975 when Semen Antonets, a Ukrainian agrarian, innovator and scholar, became chairman of the Ordzhonikidze Collective Farm. At the farm, Mr. Antonets traced the connection between intensive use of plant protection products, poor health of people and harmful environmental impacts. Observing those negative trends, the manager initiated an experiment to refuse from the use of agrochemicals. As a result, the Ordzhonikidze Collective Farm completely switched to organic production in 1988. That was in the times when this sector of agrarian activity, as well as the organic market itself, were only emerging in Europe.

After Ukraine gained independence, the Ordzhonikidze Collective Farm was reorganized into a closed joint-stock company and then into a private enterprise in 2000. The change of the ownership form caused qualitative changes. Semen’s business was continued by his daughter, and later – by his grandson, Hlib Lukyanenko, who now heads the company. The “ideologist and founder” himself today is a consultant and strategic manager of the organic farming enterprise.

Access to international markets

For more than 15 years, Agroecology’s products have been presented in foreign markets. Exports include raw materials – about 80% of the harvested grain is shipped abroad. These are mainly cereals.

The geography of exports is very wide and is constantly expanding. This includes Switzerland, Germany, the Netherlands, Slovakia, etc.

Since 2015, the company has been selling grain to the Canadian market through the trader company – Field Farms Marketing Ltd.

In 2019, the CUTIS project co-funded the certification according to the Canadian organic standard COR.

You can find out more about this experience and the conclusions on how to work in the Canadian organic market in the video.

More than profit

Organic production technology positively affects not only the condition of the environment and business indicators but also the enterprise’s relationships with its own employees. There are no problems with vacancies – there are always a lot of people willing to work for the company. Refusal from agrochemicals in the technological process makes the work conditions safer compared to traditional enterprises.

In addition, Agroecology promotes the development of rural areas. The company annually holds the Field Days in late June where it publicly demonstrates its achievements in practice. Based on the company’s training center, training is continuously conducted both for Ukrainian and foreign farmers. In particular, the company’s research center was visited by representatives of Bulgaria and Japan in the fall of 2018.

As part of cooperation with the Poltava State Agrarian Academy (PSAA), students get practical training in such areas as zootechnics, veterinary and agronomy. The company has even built its own hostels for the youth.

Ambitious plans

The company is not going to rest on its laurels. “There are plans to visit Canada, to arrange meetings with processors, large flour mills and large bakeries. We hope to find a common language with them and deliver processed products to Canada directly”, – concludes Pavlo Zakharchenko, the company’s commercial director.