Project details
Was established in 2015 for the organization of industrial production of potatoes and processed productsin Mena, Chernihiv region, Ukraine.The launch of the plant took place in 2016. The company is currently the only French fries producer in Ukraine.
Factors of investment attractiveness
Ukraine ranks fourth in the world in potato production, growing more than 22 million tons per year, after China, India and Russia.
Favorable geographical location, conducive natural and climatic conditions, high ecological cleanlinessof the area, production traditions - all this made it possible to create such a complex of French friesproduction.
The main indicator of the minimal risk of investing in this project is the absence of competitors in themanufacturing sector in Ukraine. Considering the large amount of investment required to build similar plantsand the complex technological process new plants can't appear in Ukraine earlier than 2028-2029.
Consumer market of French fries - is growing both in Ukraine and abroad. Global consumption of Frenchfries in 2017 amounted to $ 11 billion and growing more than 10% per year. The main consumers are retailchains and HoReCa (including McDonald's and KFC), and the final consumers are young and middle-aged.
The possibility of exporting all manufactured products is very favorable, as there are customers who areready to buy from 3 thousand tons every year.
Description of production facilities
The plant's capacity allows producing more than 12 thousand tons of finished products per year,warehouses allow to store more than 10 thousand tons of raw materials at the same time. Owners' investmentsin the business have already made in the amount of up to $7 million.
The company is fully equipped with a proper manufacturing base, has relevant real estate as well as land.The plant for the production of French fries meets the best European standards and has the following technological cycles:
• receiving, sorting and storing potatoes;• washing and cleaning of potatoes;• cutting;
• blanching and quality control;
• frying in oil with a temperature of 200°C;
• freezing of products at a temperature of 40°C;
• packing (in plastic wrap) and packing of finished goods (in corrugated boxes).
• storage of products in the intermediate warehouse-refrigerator.
All technological operations are properly automated and mechanized. The waste is processed into starchat additional production facilities. Production does not contain environmental threats.
Commodity positions - frozen semi-finished products from potatoes for frying (potato straws (Frenchfries), segments. Produced products of the highest class A and mass segment B.
Resource market: free, non-monopolized, supplier contracts established, needs met promptly and fully.Several agreements have been reached with large potato growers on the cultivation of raw materials forthe needs of the plant, and there are also agreements with small farmers.The main purchase of raw materials is carried out in September, which requires significant workingcapital during this period. Due to the resources involved, it is also planned to invest more in planting materialin February and March, which will ensure a stable flow of high quality raw materials at low cost.
Sales channels, structure of sales revenue
To date, the products are sold domestically (main buyers: Berry More, Rud) and abroad (export contracts:Food Master Management, Israel, IMPORT LTD, Georgia and more than 30 potential buyers from more than 15 countries in including Dominican Republic, Azerbaijan, Jordan, Israel, Uzbekistan, Bulgaria, etc.).
The full capacity of the plant (production of up to 12,000 tons of finished products per year) will make itpossible to replace a large part of imported products on the Ukrainian market (about 4000-6000 tons domesticconsumption and 5000-6000 tons export).
Due to insufficient working capital, the plant's current production capacity is currently only 15% of itscapacity utilized. As a result, there is a lack of revenue / profit.
Therefore, to provide the production program with raw materials, additional working capital is needed,which will allow to reach the maximum capacity of the plant, to increase the market share of production and aprofit.
