After Ukraine gained independence in the early 1990s, crises were rife. The country faced hyperinflation, a decrease in manufacturing, and a high deficit of energy resources. But engineer Sergii Petrenko saw new opportunities in these turbulent times, leading to the creation of his company in the field of polymer materials.
With support from the USA, the EBRD helped Sergii and his team develop a 5-year growth strategy for his manufacturing company Technocom, optimise its business processes, and increase export volume to European markets.
An observational starting point
Whenever someone asks Sergii how he came to work in a relatively new area for Ukraine such as polymer additives production, he tells of his experience choosing a watch in a shop, when he noticed one important detail: one of two watches with identical working mechanisms was twice as expensive due to the materials used in its manufacturing.
“Electronics is one thing, but the polymer materials used to manufacture a product – in Technocom’s case, concentrates for thermoplastics – are also important,” says Sergii.
While the company had experienced consistent growth over the past three decades, relying on export to and cooperation with neighbouring markets, Technocom also saw a looming challenge – the economies of its closest neighbours were insufficiently developed and the logistical distances used for exporting goods too great, which had a negative impact on both the profitability and development of the business. The solution was obvious: to enter the European market.
“For some companies, exporting goods from Ukraine to Poland may be enough, but we aimed straight for Germany, and after reaching that goal, we had another: to enter the market of the United Kingdom. It is important to set goals and, after achieving them, set more,” says Sergii.
While the European market is lucrative, it is also both strict and competitive. Companies wishing to export to its territories must comply with the relevant requirements and standards. For Technocom, like many other companies, this meant transforming its business processes and long-term development strategies. The EBRD helped Technocom with these challenges.
“We wanted to learn from the best experts, understand the logic of the developed economies, and gain the knowledge to grow and become competitive in Europe. The advisory project helped us achieve this,” Sergii explains.
The EBRD’s Advice for Small Businesses programme helped Technocom develop a 5-year strategy which allowed the company to attract additional investments and increase its exports to more than 50 per cent of total sales.
In 2020, the company was able to maintain its sales volumes despite the Covid-19 pandemic, and at the same time increase the export share of total sales by18 per cent. And last year, due to Technocom’s diligent work, its sales volume exceeded 2020 by 55 per cent, with export volumes doubling.
High production standards
Technocom is now one of the leading manufacturers of colour concentrate and modifying additives for polymers in Eastern and Central Europe with more than 25 years of experience. The company has also been investing in its own testing laboratories to control the quality of its products.
“When we were visited by experts from the National Academy of Sciences of Ukraine, they were impressed by the technical equipment of our laboratories, as there are few private companies that pay such attention to the scientific approach together with the implementation of a business strategy. We believe that a business like ours will develop itself and develop the science as well,” notes Sergii.