Background
The meat and dairy industries are fundamental to all countries and the cost and quality of food products are reflected directly in the standard of living. It is therefore important to improve the productivity and reduce the costs in these industries so that both the product costs and prices to the consumer can be lowered. Increased profitability likewise can lead to increased wages for the workers.
CEI has organized economic development missions for both meat & dairy and fruit & vegetable.
How can the CEI program help?
CEI programs to the U.S. can expose dairy and meat processor management to modern management techniques, products, organization, and methods. Product costs can be lowered, infrastructure strengthened, and more efficient use is made of existing facilities and manpower. Only by visiting working plants in the U.S. and talking to experienced industry managers and seeing for themselves what works, can the managers fully appreciate the benefits of streamlined and updated procedures and practices.
What will they see?
The CEI programs are designed to acquaint the participants with the detailed operation of plants, procedures, forms, and practices used in the U.S. They will visit dairies, meat processors, industry suppliers, government agencies, trade associations, and others. They will see the equipment used, marketing practices, product packaging, quality control practices, and new products.
Topics covered
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Organization structures
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Marketing practices and advertising programs
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Use and application of new technologies
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Sanitation requirements and standards
Companies studied on earlier missions
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Archer Daniels Midland (AMD)
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Portion Pac, Inc.
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R. A. Jones & Company
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Kroger Co.
Where will the group travel?
The program will be centered on the Cincinnati Ohio area with trips to at least 5 other states in the Midwest. At least two weeks will be spent outside the Cincinnati area.
Expected Benefits
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Reduced product costs
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Improved product quality
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Improved labor management
Example benefits from Ukraine
CEI has conducted a Meat & Dairy program and a program for Fruit, Vegetable, and Sugar. The following examples come from that experience.
Cooling Systems
When the first fruit & vegetable and dairy tours in 1998 visited Kroger and other U.S. plants, Kharkiv engineers noticed that that the cooling systems in the U.S. were located in the ceiling. In Ukraine they are located on the floor. It is well known that hot air rises – or actually cold air sinks. Therefore, the American system is much more efficient in cooling the entire storage area.
Due to the high cost of energy in Ukraine, when the engineers returned to Kharkiv they immediately re-located their cooling systems to the ceilings. After making the change, one dairy forgot to readjust their cooling controls. Their milk froze. As a result of the improved efficiency, the dairies now reduce their cooling costs by 30%.
Increasing the Milk Supply – Soy
In 1998, the Kupiansk Milk Plant was short of whole milk for making condensed milk, its primary product line. The reasons were many and Alexander Radchenko, Executive Director was looking for a solution. His CEI program paid a visit to Archer Daniels Midland (ADM) the large U.S. soy processor. The tour group was fascinated at the uses of this very flexible food, one of which was as a whole milk substitute.
At that time there was little or no soy grown in Kharkiv, Ukraine. There had been some experiments with it earlier, but the Ukrainians had little interest in using it as a substitute for sunflower seed oil. ADM showed the tour group how soy could be used as a milk substitute.
Upon his return to Ukraine, Radchenko put together a plan to start using soy. He encouraged every farm in the area to start growing soy. This included Olga Zhygaylo of Verbovskoe who participated on the 2000 Meat & Dairy tour. In the meantime, Radchenko obtained a soy processing machine from a Ukrainian equipment manufacturer. Despite Kharkiv’s northern location, seeds suitable for that latitude were found. Other farmers were encouraged to grow soy. Most started with experimental plots. These have increased each year since there was a steady market for soy. By 2002, Kupiansk Milk was using a 50% soy and 50% whole milk combination in their white condensed milk operation. Chocolate condensed milk was 100% soy.
Saving Whole Milk from the Calves
When an American calf is born, it nurses from its mother for just a few days. After a Ukrainian calf is born it nurses for 6 to 12 weeks. The result is that almost 6 weeks of whole milk production is consumed by the calf. After seeing that the Americans were feeding their calves on a soy milk formula, the Ukrainians were able to save this whole milk for the market and improve their finances.
Expanding the Milk Export Market through the Internet
Like any progressive firm, Kupiansk Milk wanted to expand into new markets. When CEI first met this dairy there was little hope of expansion – least of all outside Ukraine. The supply was just not large enough. As this gradually became resolved, exporting became a possibility.
One of CEI’s other activities in addition to running programs, is the operation of the www.ukrainebiz .com website. Due to the excellent site name, many visit it daily. CEI has set up individual pages for most of the firms who have participated on its programs. By early 2003 over 23 sales inquiries were being received each week.
As one result of the sales leads received through the CEI web site, Kupiansk Milk is now exporting condensed milk to India and the United States.
Advertising on Trucks
In many countries, a truck, in addition to carrying goods, is viewed as a moving billboard. Although large and attractive billboards are located on the side of most Ukrainian main roads, vehicles are almost never used to promote products and services. This applies to all companies from the very largest to the single owner entrepreneur. In Kharkiv, international companies advertise on street cars and busses where large signs promote McDonalds, Panasonic, Konica, Marlborough, Lucky Strike, and others. Ukrainian firms seldom advertise here.
Milk and bread trucks are seen frequently seen on the streets. However, they are painted olive green and brown. They appear to be army surplus with the word “Bread” or “Milk” crudely painted on the side. None promote their products with benefits such as for stronger and healthier babies and children. CEI was told that some companies wanted to remain anonymous in order to avoid detection by the tax man. Others explained that a change in color would require a re-registration and they did not want to incur that expense. After the program, companies such Kupiansk Milk and Roma Bakery use their trucks effectively to promote their products.