You Must Know How to Get Results
Yuri Moroz is credited for the success of OJSC Belovezhsky
Yuri Moroz is credited for the success of OJSC Belovezhsky
In this issue of the Economy of Belarus Magazine we are opening a new section dedicated to remarkable Belarusian business leaders whose talent, skills and vision have allowed their companies to operate efficiently and their employees to stay socially secured thus keeping their businesses afloat during these troubled times and bringing benefits to the Belarusian people and the country at large. We are kicking it off with an article about Yuri MOROZ, Director General at OJSC Belovezhsky.
Have Good Role Models
To be successful in agricultural business is no small thing. But Yuri Moroz has found his way to success in this industry. Since 1982, Mr. Moroz has been the director of a large agricultural company (with a
Who is he, an efficient director of an agricultural business? What are his major challenges and concerns? Imagine you are the one. In this case you have to know how to manage your land and resources efficiently, how to organize the production process to make it efficient, keep an eye on the social side of things and make sure there are no social issues, be flexible enough to respond quickly to economic changes inside the country as a whole, know how to supervise people (you have to find the right people and see what they are best at and give them the right jobs, listen to them and be able to relate to their concerns and fix what needs fixing). You have to be omnipresent, be there every day, every minute, with no holidays, no days-off.
six-year interval). Now his company’s staff approaches 2,000 people.
In 1996 he took the steering wheel of the committee for agriculture and food of the Brest Oblast Executive Committee; then he was appointed Minister of Agriculture and Food of the Republic of Belarus…
There are many examples when strong companies went bust as they got into the wrong hands, which was nearly the case with OJSC Belovezhsky. Who knows what would have become of it had Yuri Moroz not returned there to turn it around.
Today his directorial skills are an example to follow in Belarus. It is for a reason therefore that the president of the country has repeatedly urged other agricultural chiefs to follow Mr. Moroz’s example and learn from him how to run an agricultural business.
There is an opinion that attaching low-profit or even loss-making businesses to large prosperous producers saves the former and sinks the latter. Well, maybe there is something to it. But one should learn how to do business by the example of those who can really deliver, who can work efficiently.
Traditions Are A Good Thing, But…
Everything has its history. You must use your knowledge and experience, instead of throwing them away. Sometimes you might think it is easier to start the whole thing again from scratch. But how much will it cost you? This life lesson is something we keep in mind every day in our business, says Yuri Moroz.
In one of the meetings I expressed an opinion that it would be less costly to reconstruct and refit the existing buildings. Do not demolish what you have; modernize what you
have instead. And keep in mind the need to provide housing and social facilities for your staff and keep your people socially secured.
Belovezhsky was designed as a hog farm for breeding 108,000 hogs per year. The production targets set in the Soviet times have long been outperformed. It is not what we are talking about now. We are now talking about ways and approaches to growing the business.
It has always been clear to me that buying feed for animals is more expensive than to actually manufacture it yourself. You could also dabble with milk production for a change, too. So, what we needed was the land and milk farms. Having made some calculations, I figured it would be cheaper to take under our supervision a couple of loss-making businesses and put some money into them and make them efficient instead of buying grain on the side; and the profits from the production of milk could also come in handy.
Between 1999 and 2002 we took over three former kolkhozes and made them two Belovezhsky branches, Minkovichi and Karolin. We started to put money into them. We bought new vehicles and equipment. We demolished not a single building. We refitted the existing ones. We asphalted the roads to the farms. We created the necessary conditions for the personnel such as shower rooms, WCS, canteens, locker rooms.
We tried to motivate people thus creating strong teams.
We were doing all this quickly and accurately. Everyone knew their job and what they had to do. As a result, everyone is happy. I am happy we expanded our property and acquired new lands for growing feed, have more profit that we can invest in further development; our personnel are happy about their working conditions and decent salaries.
To prove my point, I will give you some figures. When we took over the kolkhoz Leninsky Put in 1999, it had a profitability of 3.8%. The yield per cow was 2,240kg, grain harvest 17.4 centners per hectare. Today this is the Minkovichi branch. The milk yield per cow in 2010 was 7,529kg, grain harvest in 2011 was 40.1 centners per hectare.
The kolkhozes Rodina and Rossiya had a profitability of 4.8% and 3.4% respectively. Milk yield per cow was 1,838kg and 2,105kg respectively; grain harvest 19.3 and 31.0 centners per hectare respectively. Today this is the Karolin branch where the milk yield is 6,733kg and the grain harvest 43.3 centners per hectare.
The company’s aggregate profitability has reached 23%. Do I have to mention anything more?
By investing into our own company we have turned around once low-profit companies, reduced animal feeding costs and made a profit on selling milk.”
“When I was asked in 2011 to take over another company, I weighed all pros and cons and decided to give it a try. Naturally, I thought that what once was the famous across
the U.S.S.R. kolkhoz Sovietskaya Belorussiya would be better off. But as it turned out, you never know…
To cut the story short, we got a new branch, Ryasna. It added 5,983 hectares, including 3,110 hectares of plowed field, to what we had had. The lands were good, fertile, a tad neglected, but we are dealing with it now.
However, all sectors of the new branch turned out to be loss-making, with a profitability of minus 20.5%, and a grain yield of 36.5 centners per hectare in 2010.
Looking at that mess, you might feel like burning the whole lot to the ground and just rebuilding everything anew. Giving it a second thought, we figured it would require some serious investment and time which you simply do not have in this business. So we rolled up our sleeves and got down to refitting and renovating and reviving things there.
We have already spent Br4.3 billion to refit the farms Oberovshchina and Lumna. I will once again give some figures for you to compare: in January-july 2011 we spent 29 times more money on these farms than we did on Sovietskaya Belorussiya during the entire year 2010. The milk yield per cow has doubled at least.
Here are some more figures. Last year Sovietskaya Belorussiya produced merely one percent of extra-grade milk. This year the well-supervised work of the personnel, rigid sanitary control made it possible to produce 86% (!) of extra-grade milk. The daily average increase in weight of bovine cattle was 737 grams, 248 grams more than last year. The feed spending reduced from 1.26 to 1.08 points. In 2011 the Ryasna branch reported the best grain yield, 51.99 centners per hectare. Now that is what I call an achievement! Excluding the refitting and renovation expenses, today this branch is profitable and contributes to the financial stability of the whole company. That said, this branch will, of course, slow down our growth a little this year, but the main thing is that this branch is no longer loss-making.
Now we have got to deal with the social side of the business and continue to invest in production.
It is All About People
We call our company the complete-cycle agricultural and industrial complex. Our company operates a 108,000-head hog breeding farm; three branches with plowed fields, seven bovine cattle farms, eleven milk farms, vehicle parks, grain-drying facilities; a feed factory with a modern feed production line; a meat factory making 250 products ready for consumption; a slaughter shop with a capacity of 55.5 tonnes per shift; a sausage shop, 16.5 tonnes of ready-made products per shift. At the meat factory, we have introduced the STB ISO 90012009 standards and the HACCP to meet the requirements of STB 1470-2004. The quality of all raw materials and products is controlled rigorously at our laboratories. Our products are branded Bel-moris and sold via our chain stores that we are now expanding.
This year we have 72 young specialists coming to us after graduation from their vocational schools and technical universities.
We have a tradition: every September we give all our new people a crash course into how our company works. It helps the new guys get to know each other better and take a look at how the business operates. It is not uncommon that young people meet their future spouses during such crash-course parties. Every new family gets a present from us, a house with all the facilities. Why not live in the town of Belovezhsky?
Of course, we do have certain difficulties, but these are common for everybody. Consumer prices grow, and it is getting increasingly difficult to keep specialists by virtue of salaries. People have got used not only to spending money, but also to saving it.
Earlier we could more or less easily provide our employees with housing due to the national rural housing construction program, which offered preferential loans at a minimum interest rate and a 40-year installment plan. Today if we wrap up this program, we will not manage to persuade young people to stay. And young people are absolutely essential for the countryside, as well as the entire agricultural industry, to prosper.”
What else can be added to what Yuri Moroz said? OJSC Belovezhsky prospers, as does the town of Belovezhsky. Flowers in home gardens are abundant, there are European-style well-kept patios. Every morning the company’s buses take employees to their work places, take them to lunch and back home. As accurately as clockwork. One thousand and seven hundred employees work fruitfully, earn decent money. OJSC Belovezhsky provides a worthy level of life for the residents of the whole region that includes 35 population centers. All this is closely overseen by Director General Yuri Moroz.
OJSC Belovezhsky, Brest Oblast, has allocated 3,080 hectares of land for corn crops. The company harvested over 2,000 hectares of crops to stock up on green material for the cattle. Corn harvested from the rest of the area went into the company’s storage
Enlargement of agricultural enterprises contributes to improving their effectiveness, said President of Belarus Alexander Lukashenko as he visited the agricultural company OAO Belovezhsky on 6 April. In his words, OAO Belovezhsky is a good example of modernization of existing facilities
is a completecycle enterprise.
It gives the company an advantage over most meatprocessing enterprises that import raw
materials. The company
offers over 180 proprietary
products to customers