Strategy of KSG Agro agricultural holding
KSG Agro is one of the largest vertically integrated agricultural holdings in the Dnipropetrovsk region, operating in almost all segments of the agricultural sector, including production, storage, processing and sale of agricultural products.
The holding’s companies stick to a strategy of progressive development. It is based on focusing the company's activities on the following areas:
1. Increasing business efficiency
The key goal of KSG Agro management is to increase the operational efficiency of all types of business.
The main ways to increase efficiency are:
- reduction of operating expenses, and as a result, reduction of production costs;
- a new procurement organization system;
- optimization of intraoperative processes;
- restructuring of credit debt.
In 2015-2016, as a result of the implementation of this strategy, the economic performance of KSG Agro significantly improved: in 2016, the company's revenue increased by 8.6%; operating profit grew by 17.8%, from USD 13.5 million in 2015 to USD 16 million in 2016.
KSG Agro will continue to focus on the above-described areas of development, and also intends to improve the efficiency of land use, increasing profitability per hectare.
2. Development of pig breeding business and increase in export of live pigs
During 2015-2016, the agricultural holding increased production volumes in animal breeding. According to the results of 2016, the agricultural holding increased the volume of pig sales by 5% to USD 8.5 million.
In the long term, the company plans to double its pig population, which currently amounts to 60,000 simultaneously bred pigs and 4,500 sows.
Agroholding entered the Georgian market by supplying live pigs there. According to the 2016 results, KSG Agro’s share in the export of live pigs from Ukraine was 22%.
It is planned to expand exports by supplying Georgian partners not only with live pigs, but also with piglets for rearing. The strategic goal is to enter the the Georgian market TOP-5 suppliers.
3. Preservation and improvement of positions in the plant growing segment
The holding concentates on wheat, sunflower, corn, spring barley and rapeseed. In 2017, the list expanded to include sorghum, a crop that has proven its value in the arid climate of the Dnipropetrovsk region.
The development of agricultural exports continued with entering the Middle East market, to diversify sales channels. Being pesent at the agricultural products market of Arab countries will lead to the diversification of the product export geography.
4. Implementation of innovative technologies in livestock and crop production
In raising pigs, KSG Agro uses and will continue to use advanced Big Dutchman technologies and Danish genetics, which have proven their effectiveness. In grain production, the holding intends to partially replace nitrogen fertilizers with innovative biological products that increase the yield of wheat, sorghum, barley and rapeseed.
5. Development of alternative energy
KSG Agro operates 5 pellet boilers: 3 at the pig complex in the village of Niva Trudova, 1 in the village of Novopokrovka (at school), 1 in Dnipro city (Myriad shopping center).
The further strategy of the holding is to upgrade boiler houses in the cities of presence and their conversion to biofuel (fuel pellets). In the short term, it is planned to reconstruct 6 boiler houses.
The holding also intends to attract an investor and complete the construction of a pellet plant with a capacity of 60,000 tons of pellets per year.
