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Maria Osyka: “Our goal is to raise an entrepreneur with owner mindset”
Agroprosperis Group has been active in Ukraine since 2006. It manages 50 agricultural production enterprises called Agroprosperis Plants (APP) growing crops on over 400 thousand hectares of farmland in 14 regions of Ukraine.
It is one of the largest agricultural producers and exporters in the Black Sea region. Agroprosperis finances and exports over 2.5 million tons of crops annually. The key investor of Agroprosperis Group is NCH Capital, a U.S. company which, since the inception in 1993, has created 25 funds providing national markets of developing countries with access to financing. propozitsiya.com asked Maria Osyka, Director for Agricultural Investments at NCH Ukraine about the current situation at Agroprosperis Group.
Until recently, Agroprosperis preferred a policy of little disclosure, but now, it shifts toward greater openness and publicity. What are the reasons for that?
In the past, we felt not much need for publicity, because 80% of the crops produced by Agroprosperis Plants was exported. Today, we are actively creating a supply chain of added value from field to table for Ukrainian agricultural producers.
What are the forms of this cooperation?
In October 2015, Agroprosperis presented an innovative service platform that helps increase the return on investments in agricultural production, building upon the Group’s 10 years of experience and original technological solutions for five crops(sunflower, corn, wheat, rape and soy), using financing provided by Agroprosperis Bank against agricultural promissory notes and forward contracts, and taking advantage of cooperation with global food processing companies
How many customers do you have already, and what are the advantages of cooperation?
70, mostly small and medium agricultural companies in Ukraine’s key agro-industrial regions. Agroprosperis offers them long-term financial stability of agricultural production created using time-tested management algorithms, agricultural technologies based on advanced IT instruments, fixed margin for particular crops, and foreign-currency revenues from forward contracts.
Recently, Agroprosperis began using a new IT instrument to forecast production effectiveness for various crops. What are the objectives and features of this software?
This is Agroprosperis’s original solution, a truly unique IT instrument for centralized agricultural production: Smart Agri web application developed over several years by a professional team of IT specialists, agronomists and analysts.
Smart Agri is an instrument for modeling of a required financial result (return on a seasonal investment) for any time horizon, say, for the next 3 years. This software is based on analytical methods of the 8-year database of 50 agricultural production companies. Using it, you can develop in virtual reality, in just a few hours, an optimal technology of crop growing for a specific financial result required by an investor or owner.
When talking to an investor, directors and managers of Agroprosperis Plants drop into the language of numbers: achieving certain return on capital over a season with certain probability.
Smart Agri is a flexible universal instrument that can be used at any company, in any industry and in any country. We intend to offer it to Ukrainian and global agricultural producers.
Was it your personal idea to create this modeling program?
Yes. It occurred to me when our team was preparing a presentation of Agroprosperis Bank for farmers. Ideas are being conceived when you have a task at hand which you have to accomplish in no time. Basically, it’s a quantum transition from point A to point B.
Agroprosperis also has a special partnership program. Tell us about it, please.
This partnership program is now in its second year: we proposed core specialists of Agroprosperis Plants to invest their money in agricultural production of their company. This scheme somewhat resembles a bank deposit program, but unlike the standard bank rate of 5% in dollars, they create their deposit interest themselves, and by the way, have earned 80% per annum in dollars on average in 2016. This way, our specialists, having clear knowledge of the parameters of technical operations, actually create their financial result and result of the company they manage.
How many people are engaged in this partnership program?
In 2016, there were 35 persons participating in our partnership program, who invested $250 thousand. This year, their number went up to 945, and they have invested $3 million. We held meetings for them in Kyiv to make sure that every core manager understands his or her role and the effect it has on agricultural production, and how to organize own work better in order for his investment to yield the maximum return.
Is this practice of investing in own company a borrowed experience?
We learn from the best international experience. Globally, there are two management systems: one of them is focused at control, when people work out of fear and when their every single step is being controlled. Our people are smart; they can circumvent any controls, and besides, a management method like this blocks their consciousness.
For Agroprosperis, control is a history. We have the system of Creator Man, a business owner, which can be phrased like this: “I am a free man, an entrepreneur co-owning my business, who creates the maximum financial result for myself and my company!”
Is it time to talk about the effectiveness of this approach yet?
Definitely! Our goal is to raise an entrepreneur with owner mindset, and to do that, we need to change mentality and approach to organization of work. At the end of a year, we evaluate performance of every employee, function-wise, and compile a rating for the whole Group. Agroprosperis encourages the behavior it expects from employees.
Does it solve the staffing problem as well?
Surely! We have created an open system of organization, which leaves the company with best employees only. I am convinced that 80% of result is produced by specialists on the spot, and therefore, we invest in them before anything else.
In addition, we plan to open Agroprosperis Academy. It is not the building, because we can lease it; the essence of the Academy is instruments that help specialists change, in a short time, their mindset and switch to new methods aimed at financial result.
As an organization, Agroprosperis is quite complex. Is it hard to manage it?
We have two business units. The first is agro-industrial production managed by six holding companies and including 50 APPs and 12 grain elevators. The second is the chain of agricultural producer’s added value from field to table.
Having at our disposal the instruments we have implemented over the past two years, managing this organization became an easy and pleasant job. Our goal as an investor is to create a self-cleansing system. For that purpose, we have created a core at every Agroprosperis Plant: specialists directly responsible for creating an asset, and charged one person with responsibility for one particular area of business, indicator or territory. After that, we gave them 1-2 parameters for every step and a financial algorithm. These instruments make administrative structure transparent and trim, and form the Group rating of all APP general directors, all agronomists, engineers and other core specialists. It guarantees transparency and logic of managerial decisions for all.
How often do you personally meet with the management of companies?
Together with Michael Bertram (the head of NCH’s Kyiv office – editor’s note), we meet, 2-3 times a year, with the management of every company, every grain elevator and Agroprosperis product managers.
Do you plan to expand the farmlands you cultivate? What is your stance on the land reform?
We have pooled our farmlands from 2006 to 2008, and presently, are optimizing it according to financial indicators. We have no expansion plans for the moment.
As for the land reform, we are ready for it. Our landlords respect us, because we take active stance in our village councils and help communities develop.
About Maria Osyka
Maria Osyka, Director of Agriculture Investments, joined NCH in 2007. Ms. Osyka is responsible for managing NCH's agribusiness portfolio in Ukraine, and for identifying new investment opportunities in the agricultural sector in Ukraine and selected other countries. Ms. Osyka received an MA in Economics from Central European University in Prague and an MBA from Goizueta Business School at Emory University.