Ievgenii Kharlan: Our principal idea is to build as a transparent and clear business as possible. Businessman Ievgenii Kharlan strongly believes that a modern berry business is
impossible without new technologies and innovations. He builds his own berry farm “Nikdaria” (TM “iBerry”) so that the process could be managed with (the use of) a mobile phone or a laptop. He told about his ambitious plans and the business of his dreams in the interview to the EastFruit.
“Smart” technologies and innovations in the berry business
– Ievgenii, could you tell us how you got engaged in the berry business and what you did before?
– I would call my way to the berry business a thorny path. I am a specialist in international economics, a diplomat and a French interpreter by profession. After my studies I ran publishing business and had been working in the banking sector for more than 10 years. I defended my PhD thesis in food security and now I am doing a degree in MBA.
In 2015 I decided to roll up my sleeves and start my own business. There were several options, but mostly I wanted the business to be productive and to possess export potential.
Like all enthusiasts I began with investing my own money and later on like-minders joined me. Now I am rather the ideologist of the project, strategy and development chief than the investor or director. Our company runs the berry project of approximately 100 ha in Radomyshl district in Zhytomyr region and the sky is the limit for us.
-Why did you choose such crop as blueberry? What sorts do you use?
-It’s simple – first of all, it is a healthy crop and then tasty, fine and smart one. This year we harvested not large, so-called preliminary amount of berry. We are planning to reach full fruiting in a few years. We use planting material of the world-beaters Fall Creek and Kusibab-Wyka as well as of our leading nurseries “FruiTech” and “Dolyna-Agro”. The sorts being used are standard – the Duke, Chendler, Bluegold, Bluecrop, Spartan, Elliot.
-You named your trade mark as iBerry. Why?
-In our understanding the prefix «i» emphasizes the aspiration for innovations. That does not mean investing in new technologies at breakneck speed with no regard for recoupment – just the other way round: we stand for common sense and reasonable decisions.
-You claim that a present-day farmer may run the farm with a mobile phone which sounds at least fantastic. Could that be true?
-Yes, due to new technologies it is quite real. Now being anywhere in the world I can operate the sprinkler system, receive the productivity statistics, check any system errors and receive information about the equipment failures promptly with the use of special programs in my phone, tablet or laptop. Even the cleaning of the filter station is fully automatic. The weather station works the same way. We observe the temperature, precipitations and wind strength online. The records of all the data are kept in the cloud. In a year we will have enough statistical monitoring
of the wind rose to proceed to the analysis of wind-powered generators and solar batteries building practicability.
Special sensors so-called watermarks gauging soil humidity are located in each square of the field. The field is never watered by eye or at the wish of the agronomist; we do everything with automatic help of the devices. The AgriLab devised interactive maps for us by the aid of which the analysis of soil connected
to the Google maps along with all the coordinates can be controlled. Now we are expecting the supply of the Horiba’s soil, water and foliage express laboratory. Human resource accounting is automatic and is controlled distantly as well. There is a special fingerprint sensor fitted which keeps record of the workers in the field online. I can look through all the working papers: the number of people working in the field at the moment, the time of their arrival, departure and sick leaves and so on.
All our machinery, tractors, cars are equipped with GPS-sensors monitoring transportation and data history archiving online. There is no need in asking where and when the security patrolled the territory – we only have to upload the history at the web-page. In addition to the security, the territory is patrolled by the drone. The guards are still afraid of operating it, but I think we will succeed in changing their attitude to this gadget.
-What’s the idea of the innovations and technological effectiveness? What is their goal?
-Our principal idea is to build as transparent and clear business as possible. The business owners being away from the field cannot be present there every day. At the same time they want to have maximum access to the information and we have to provide them with it so that the business is controlled distantly and even managed if they wish. All the work data has to be not on paper or in a notebook, but in electronic form and on-screen. This way it is easier to analyze the investments and plan the work.
It is worth mentioning that we came to it gradually. At the beginning even the 2G mobile network didn’t work properly in the field. Having negotiated with mobile network operators for a year, but with no result, we financed the 32m-tower installation and ordered the signal amplifiers. We have also held the satellite internet and by the end of the year the GSM-signal amplifiers will have been installed in order to cover our area with stable mobile communication. If we succeed, we intend to give similar equipment as a present to the village nearby we work. Essentially we are now learning to make a farm of European type. We already implement the GlobalGAP standards and have recently received the organic certificate for the land providing for the highest possible production transparency.
-It seems you are trying to take every detail into account. And as for implementing new technologies, is this idea yours either?
-Believe me, we are still a long way from the ideal, the berry business is too complicated. The idea of implementing new technologies at the maximum level belongs to me. It all started with the fact that I adore doing craftwork. I have a big aquarium at my place, but a person with the daily routine as mine cannot change the water, fertilize the plants and feed the fish on schedule. No matter how hard I tried I couldn’t achieve balance in the aquarium. Sо I decided to automatize the process as much as possible: I soldered the pipes, rendered the water drain and supply automatic, collected the carbon dioxide supply system, found a medical pump on Chinese websites for fertilizers delivery to the aquarium, ordered a self- made system control module, installed automation on the heating and cooling system. In a word, nowadays the only thing my aquarium doesn’t do is talking. Now my approach became useful in business. Of course, we can’t do without
human factor, but modern technologies do work. The market of berries, cooperation efforts and possibility of additional income
– What did you start establishing of the plantation from?
-I started from the search of the land. We drove around all the districts of Zhytomyr region, took samples for the initial analysis of the soil, considered the best ways to supply electricity, the places to take water from and labor resources. It is important to initially make a clear picture of your site in order to avoid further “surprises”. Having chosen the site, we decided to carry out a detailed
agrochemical analysis of the soil, which clearly allowed us to prepare it for planting and developing an optimal substrate structure.
-And which companies did you take as a model?
– Unfortunately, in Ukraine berry farms are very secret from each other, they share little information. When we started, only the “FruiTech” and the “Ukrainian Berry” were ready to show how the berry business works in their understanding. The industry has great potential, but there has not been a single specialized conference / congress on blueberries in Ukraine so far. There is no discussion; no one publicly shares their success or problems. It would be very cool to put one common / joint stand, for example, at the Fruit Logistica exhibition with a neutral brand
“Blueberry! Ukraine Now”! However, the mentality “where there are two Ukrainians, there are three hetmans” is hindering our work. I hope this will change
– Do you think that having a large number of players Ukraine can become a “blueberry” state?
– Globally, I would not want our country to become a “blueberry” state. Not just agriculture but other sectors of the economy should develop. As for the berry
industry, of course, in the coming years blueberry will become the locomotive as it is at the height of fashion.
– Many farmers today are skeptical about growing blueberries, and even predict a significant market decline. Is it true?
– In terms of absolute values – it is not, production will grow geometrically. But in terms of marginality, we are going to face hard times. It will not be as easy to make
money on blueberries as it was before. Therefore, it is important to increase efficiency, create your own unique value, think about how to position ourselves at the market and make a top class berry.
– You have mentioned that you received the organic certificate. Does that mean that organic blueberries will appear in the assortment?
– Yes, we have allocated a separate legal entity and 12 ha of completely isolated area, received the organic certificate for the land. We will test the model of organic farming there. I think that the experience of the implementation of the organic and standard field by one team of managers in completely identical climatic conditions with the same equipment but different crop protection agents and fertilizers will be unique for Ukraine. Soon we will find out which business model is more efficient.
– In addition to blueberries, you also planted honeysuckle and asparagus. What is the choice of these particular cultures motivated by? And what production volume
are we talking about?
– As for the honeysuckle, at the time of the creation of our project it was a fad, so to say, another niche berry case for economic efficiency assessment in terms of investment. I heard a lot of opinions, but I would venture to express my own one. For now I do not understand what honeysuckle and its market are like. We have planted three hectares of it, it is only going to bear fruit and it is still early to uproot – we will look at its abilities.
We still have one hectare of asparagus, but next spring we are going to plant another 10 hectares more. This is not a separate project as honeysuckle or an organic field, but a part of our berry strategy, and our competitive advantage among other blueberry producers. Why? – I want to keep the intrigue!
-It is clear with growing. But how will you gather berries, with the help of machines either, or maybe robots?
– As for robots, that’s a good idea. However, we do not want to be pioneers and prefer to adopt someone else’s experience. Now we are considering all possible options, we are looking for the optimal solution for both picking and selling berries, planning distribution channels. It’s one thing to think it over, another to put on paper, and still another to do something. Now it is important to comprehend how to harvest and what the post-harvest storage and sorting will be. There are already several suggestions for storage and cooling; we are still calculating the cost and possibilities. It is already clear that this will be an interim solution; we will build a large-scale refrigerator for berries in three years. We have already visited several farms, looked at how they do it, we have our own ideas on the processes optimization for our specifics.
Choosing the agronomist, the staff controlling and social projects for the village
– We often hear that the main thing in farming is not only to find the right competent agronomist but also to retain him?
– It is necessary not to retain but to create appropriate working conditions for people, to motivate them and to inspire. For me, our agronomist is not only a worker but also a friend and comrade like everyone else who works with us. I know by name most of them, I shake hands with everyone and I am always open to communication and proposals. I try to know how people live and what they think. I prefer to discuss global things with the team personally. If fateful decisions arise, I explain my position and motives to the whole team. We even have a special book at the enterprise in which employees can write anything they want, anonymously or not and I will surely read it. The most valuable thing is that we have been able to build trust-based relationships with the employees – they know that we deliver our promises, even if it ends up being losing for the project. If they, in turn, give the word of honor, they must also keep it.
Coming back to the agronomist, he is a kind of VIP person for us, next season he will be even more important than the director and me, because for the most part,
what blueberry crop we will get will depend on him. Therefore, we are trying to give him maximum support – we have hired an agronomist to help him and we are ready to hire some more. During the last year other companies with higher salaries tried to lure him twice. But I am sure that he will not let me down. Indeed, not money but something else is at the top of Maslow’s pyramid. Our agronomist lives on this project, just as I do.
– Today, you are not only engaged in farming but you also help other farms with equipment outsourcing. Who are the customers and what is the cost?
– I remember when we started running the blueberry business, we could not collect a full set of necessary equipment for rent. As a result, I had to buy it and then hire people and train them. Now we don’t need this equipment any more, and we don’t want to sell it. As it often happens, quite by chance we have discovered an empty niche for services and a client appeared; now we are the first in this direction and any farm can rent our equipment. We started to provide the service a month ago.
At present we are doing a 10ha-plantation, and there is another order coming. All the others are being negotiated. It worked out wonderfully, we do not need to retrain highly specialized employees for other operations, we can provide them with work, and they can do the same plantations as ours for other clients and earn fair wages. As for the price, in my opinion, it is definitely more economical to hire our equipment and specialists for everyone who does a plantation of less than 20 hectares.
-Aren’t you afraid of your experts making mistakes while establishing the plantations? It may have serious implications, may it not?
– No, I’m not. The customers come to us, they see how we have done everything at our place and they want it the same way. What’s more, our agronomist is connected to the process. The experience is our advantage, but if we are not asked, we do not give any recommendations, we follow the rule: When in Rome, do as the Romans do. Moreover, we have GPS sensors installed in all of our equipment, thus we understand when and how much it worked, whether it went beyond the territory where it should work, or not. The equipment is not even the case, but the approach
– we are sure that our specialists can show the best result. For example, a year ago we could finance the preparation of 80 ha on our plantation; however, we prepared only 25. This year we prepared a site for 70-80 hectares with the same number of people. That means that in a year we have learned how to do the same operations three times faster and more qualitatively.
-How did you manage it?
– For the entire past year, we documented and tabulated all the operations performed, determined the normal hours and sequence of operations, analyzed what can be changed, integrated or replaced. Then the consultants were hired to put all our calculations into the Microsoft Project and built a schedule for the staff and equipment for the whole 2018. The most important and difficult thing was to convince the company top management of the reality of the plans. Then everything went swimmingly. This season our employees coming to work in the morning already knew how much work they needed to do in order to fit the standard. If they exceeded the norm, the overtime work was taken into account at a double rate.
– It sounds great, but how can you really control it? You just pay him for a day of work and that’s all…
– At the end of every working day, we monitor the work done and its quality. Personally I like to use the drone to visually control the work done according to results of the working day. It has to be said that we deliberately quitted the pay by the hour / day. Each worker has a minimum guaranteed remuneration for his working day, and even if he, let’s say, just spent the whole day under a tree, he would still receive the minimal money. But this rate is not interesting because the fulfillment / over-fulfillment of standards is financially encouraged with a progressive scale. Double wage for us is not unreal.
– Well, if an employee, for example, did not report for work? How will you know?
– There is a special scanner at the entrance to the farm and a person gets inside and leaves the farm only by putting his finger to the device. There are no cards or lists – they are easy to fake. I must admit at first it was difficult to keep track of people at work from 8 to 17.00 from Monday to Friday. But when they understood the system, everything fell into place. We break stereotypes; we persuade them not to be on social assistance and subsidies and do illegal work, but work officially. It is necessary to be socially protected on the one hand and morally responsible to
employers on the other. I am proud that now we do not have any turnover of personnel that other farms complain about. Moreover, people believe us, even families work together, people bring their husbands and wives, many of those who have hastily left us earlier are now returning back.
– And how did the local authorities accept the idea of a blueberry farm? Did they support you?
– This is a very interesting story. At first, we wanted to work in the neighboring village of Pylypovychy, but the locals and the head of the village, to put it mildly, did not accept our idea. For unknown reasons, our business initiative was hostile there. Therefore, we chose a different location, got the support of the local authorities and started working, and people got the job. Later we entered into a social agreement with the administration of the district on the villages support.
Now we help them: we finance the road repair, pay for school meals for children from financially insecure families, help to repair the district fire station and the local medical center, sponsor the Christmas holidays and we have equipped the table tennis club. We plan to launch a free scheduled bus from our villages to the district center, to purchase equipment for improving mobile communications, to stock the local water reservoir, to arrange recreational facilities for locals and lots of other things.
– Have you ever thought of scaling up the business, for example, in another region?
– Of course, we have. Our policy of openness to have a dialogue brings its results. There are a lot of ideas, plenty of potential investors and not only from Ukraine. We are very pleased with the professional approach to the private business issues both of the Zhytomyr and Radomyshl region administrations. We are surprised by the transparency of relations and the speed of the decision-making by government agencies. I would go even farther and say we have already had a couple of developed sites with a full analysis of the soil and other conditions for the implementation of projects for berry crops and asparagus. I think with God’s help the continuation is not far off.