Alexander Shutov came to the position of General Director of the elevator division of Prometey Group of Companies during a rather difficult period for the grain business. How the company's elevators are passing through the "turbulence zone", how they performed last season, and what they intend to do in the current season - in our interview with the specialist.
Alexander, you headed the elevator business of Prometey Group of Companies at a difficult time for the business, are you not afraid of difficulties?
Alexander Shutov: I came from the position of elevator director. Before that I worked in the company for 5 years as a regional director, but because of the hostilities it became impossible to continue full-fledged business in Zaporizhzhya region. So I worked as a director of the elevator for some time. I did not think about the offer to head the elevator business of the Group for a second, I agreed immediately - I have enough experience and knowledge.
What indicators did the Group finish last season with, what did you work with, what crop turned out to be the most profitable?
Alexander Shutov: Last season was not the best for Prometey Group, as well as for many participants of the agricultural market of Ukraine. Due to the full-scale invasion of Russians GC "Prometey" lost 4 elevators in Zaporizhzhya region, one more elevator in Kherson and Mykolaiv regions were occupied. Two elevators were damaged as a result of rocket attacks. One more elevator in Sumy region is in the gray zone.
Therefore, the company lost a significant amount of storage facilities and products, due to which it incurred heavy losses. Our storage companies also suffered losses.
The elevators that remained in operation worked with barley, wheat, corn, sunflower and rapeseed. The most profitable crop last season was sunflower.
Why was it the most profitable?
Alexander Shutov: It demanded the most services - processing, drying, cleaning.
And the elevator in the gray zone in Sumy region - is it working?
Oleksandr Shutov: Yes, it works. It accepts and ships grain. But due to shelling and potential threat, farmers fear for their products and try to take grain to more distant granaries.
Which elevators worked most efficiently last season, how many turnovers did they make?
Alexander Shutov: Elevators of Dnepropetrovsk, Poltava, Kiev, Kharkov, Odessa regions. Also the storage facilities of Kirovograd and Khmelnitsky regions. All these elevators worked quite well under the surrounding conditions. The company has carried out modernization at these enterprises, so they effectively coped with all the tasks and successfully completed the last marketing year. The grain storage facilities made one turnover each.
How did Prometey grain elevators enter the new season, were there any leftovers?
Alexander Shutov: The company, despite the difficult working conditions, did everything possible to renew its material and technical base before the beginning of the new season and to accelerate the acceptance and shipment of grain. Almost all elevators were cleared of residues.
Fumigation preparations have become more expensive?
Alexander Shutov: Yes, they have gone up in price. Decontamination has become 25% more expensive. But we had some leftovers from last year, so it made everything a little cheaper. Fumigation is quite a costly procedure, but every elevator should carry it out before the beginning of the new season, in order not to incur heavy losses due to grain infestation by pests.
What crops are you already working with this season, is there any difference in your work compared to the last season?
Alexander Shutov: We have already accepted and continue to accept wheat, barley, rape, soybean, corn and sunflower. Compared to the indicators of the last season at this stage of harvesting of wheat, rape, soybean and sunflower we have received 20% more than last year. This year the grain yields are higher, and because of the closed ports, agrarians have less choice where to put the grain. So-called sales "from wheels" almost never take place, the products are mainly transported for storage.
Have the proportions of "own-take" grain in storage facilities changed?
Alexander Shutov: No, they remained the same as last season - somewhere 1:3. One part of our trade and three parts of third-party grain. That year the picture was similar.
Which of the elevator services at Prometey's granaries is the most demanded now?
Alexander Shutov: Now it is storage and finalization. Due to the closure of the Grain Corridor and the ban on export of Ukrainian grain to 5 EU countries, the price of grain has fallen. Therefore, agrarians are taking grain to elevators, hoping that the situation will be improved.
Has the grain been dried in any of the regions yet?
Alexander Shutov: Not yet, the weather conditions have contributed to the fact that the grain is mostly dry, with basic moisture. So far it is dry in all regions. As will be further with corn - we will see according to the weather, it has just started to be mowed in some places. As for early cereals and sunflowers, these crops do not need drying. Dry and clogged.
Do early grains this year differ in quality?
Alexander Shutov: There is a lot of forage this year, in all regions. The rains have washed out the proteins, thus the quality of wheat has fallen. Although we expected good wheat, we thought there would be more forage. In percentage terms, we got 80% forage and 20% food wheat. Food wheat is good quality, but not as much as everyone had hoped.
Most of the decline in wheat quality is due to low protein. The turtle bug also occurs in some places, but not significantly, the quality is not affected by this damage. There have been years when the bug was massive, but not this season.
What did you build the economy of elevators on last season, and what do you plan to earn on in the current MY?
Alexander Shutov: This year we plan to build the economy of Prometey Group's elevators on grain storage and processing. We have not changed the cost of elevator services in the new season, which was the same as last year. For example, if we take drying, we managed to purchase gas and other energy carriers at optimal prices in advance. Due to this we will be able not to increase tariffs in the season and remain competitive in the market.
Do farmers have any debts to Prometey's elevators?
Alexander Shutov: No, there are no debts. We have a very good teamwork, reasonable tariffs, good management allow us to work without debts on both sides.
Are Agromarkets working on Prometey's elevators now?
Alexander Shutov: Agromarkets work in the usual mode and continue to sell products necessary for agrarians: seed, agricultural machinery, plant protection products, fertilizers and so on. Stably 70-80 percent of our customers are interested in the services of Agromarkets. Because it is profitable and convenient for them - to come to the storage facility, to hand over grain, and on the spot to buy everything they need at normal market prices. It is convenient for agrarians, they do not need to run and look for goods, they can find everything they need at the elevator.
We continue to work with both old, regular customers and new ones who come on market recommendations. New customers appear every year.
Did you modernize Prometey's grain storage facilities before the new season?
Alexander Shutov: Before the start of each new season, we conduct a technical base at the Group's grain elevators. In order to maximize the efficiency of the season, we identify weaknesses and eliminate them. This year we restored and put into operation grain storage facilities in Dnepropetrovsk and Nikolaev regions and elevator in Voznesensk, which suffered from shelling. At that elevator we cleared the debris, restored warehouses and infrastructure, and put the storage facility into operation. Now we are working as before, we entered the season with a working elevator.
How, in your opinion, will the situation on the elevator market develop in the future? What risks do you estimate as the biggest?
Alexander Shutov: The biggest risk is the situation with export. If 2 years ago our elevators made 2-3 turnovers per season, now - 1. But we are still optimistic and make every effort to make the elevator business of Prometey Group profitable.
Regarding the risk with probable lack of electricity due to infrastructure attacks, most elevators already have industrial generators, which will ensure the operation of storage facilities in the absence of light. We will not be able to stop receiving, shipping or drying, and we will be able to work at full capacity.
To what extent does your own fleet of vehicles help to overcome the main challenge of the season - difficulties with export? And does it help at all?
Alexander Shutov: Since our export shipments are shipped on vessels, we do not lose time searching for transportation to deliver grain. Our own fleet of vehicles promptly removes everything. We give preference to direct shipment of grain, because now the Russians are hitting the ports, so we try not to store it in warehouses, but to transship it directly from cars to ships.
Alexander, how has your work schedule changed in your new position and what helps you to withstand the new loads?
Alexander Shutov: My work schedule hasn't changed much, as I worked 24/7, and I still do (smiling -- editor's note). There is no time to rest in this business, and I like it very much. I feel I am in the right place here.
My family supports me a lot. The time we spend together gives me strength.
Alexander, thank you for the interesting conversation!
Maya Muha, Elevatorist.com
