Ole Jorgensen runs a lean, profitable pig farm and dishes out the simple advice of “just following the rules”.
KAVSKO, Ukraine – Preparing to enter Ole Jorgensen’s pig farm gives you a strong hint about the reasons behind his success in Ukraine in the last 11 years.
First, you need patience as you go through a process of showering and changing clothes to avoid bringing infections to the 62-year-old Dane’s prize pigs.
Second, it’s this kind of attention to detail that ensures the quality of everything produced at Jorgensen’s farm in western Ukraine.
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“Just follow the rules,” Jorgensen, the farm’s general manager, advised other investors looking to tap the enormous potential of Ukraine’s agricultural sector.
This goes for dealing with pressures from the authorities – from predatory tax inspectors to regulatory pressure – as well as the business itself.
Another part of the farm’s strict cleanliness guidelines stipulates that no employees can have their own pigs on family farms and there is also a three-kilometer electric fence to keep away wild hogs from Jorgensen’s healthy pink pigs.
Jorgensen said he got into the business by chance. In 2006 he was asked first to consult and then to head the Halychyna-Zahid farm, situated near Kavsko village in Lviv Oblast.
The company belongs largely to Danish owners who have invested 30 million euros.
The project is supported by a fund established by the Danish government to support businesses in Central and Eastern Europe, which owns 11 percent of the company.
Another 6 percent belongs to the Nordic Environmental Finance Corporation, which helped modernize and reconstruct the farm.
“It is patient capital. It took at least 10 years since they invested until they had dividends. They are interested in growing business,” explained Jorgensen. Having sold their first pig in 2008, they became profitable just last year, and won’t have to pay back loans until 2015.
In the 1980s, when the farm was founded, it employed 750 people. Now there are only 150, and 50-70 temporary ones. This smaller workforce produces three times more pigs.
The farm now has 3,600 sows and only 32 hogs. They give birth more than twice a year to an average of 15 piglets.
Pig breeding is a Danish specialty. We are one of the most efficient in the world.”
– Ole Jorgensen, pig farm owner.
The pigs are well fed with homegrown crops. The farm has 3,200 hectares of land where crops are grown to feed the pigs, who need 100 metric tons of food per day.
Jorgensen’s attention to detail means they have warm stables and enjoy good healthcare: Every pregnant sow goes through a UV-scan.
“Pig breeding is a Danish specialty. We are one of the most efficient in the world,” he said. Apart from Jorgensen, two Danes work at Halychyna-Zahid. One manages pig-breeding; another crops.
A large share of the company’s Ukrainian staff has spent some time training or working in Denmark – a major destination for students of agrarian universities in central Ukraine.
The company’s vice manager, Yaroslav Kebal, was one of them. He studied in Zhytomyr and worked in Denmark for two years. The experience changed his attitude.
“Ukrainian-bred pigs are no good. They degenerated because of the crisis our animal industry sunk into during the 1990s,” he explained.
The farm’s pigs are all Danish-bred. Supposedly due to these “good genes,” they have 1.5 to 2 centimeters of fat compared to traditional Ukrainian “salo” producing pigs, with up to 8 centimeters of fat, according to Kebal.
They will need an additional Hr 25 million to develop the farm – a bigger number of sows, more fields and maybe a slaughterhouse. Then, Jorgensen suggested, he will probably expand to other sites in Lviv Oblast.
It makes no sense to complain. Follow the rules or go home. If you want to stay here, you have to be able to adapt. If not, you shouldn’t have come.”
– Ole Jorgensen, pig farm owner.
He and his deputies are not the only Danish farmers in the area. There are dozens who came here in the 1990s. Some, like Jorgensen, first setup textile shops. Others tried wood shops. Some tried both, as well as other ventures.
Their success varied. But those who are left meet every Friday in a bar in Lviv and complain about over-regulation, lack of rule of law, difficulties to get work permits and other typical problems experienced by investors in Ukraine.
Over the years, it has become harder for Jorgensen to listen to complaints.
“It makes no sense to complain. Follow the rules or go home,” he said. “If you want to stay here, you have to be able to adapt. If not, you shouldn’t have come.”
The Danish general manager insists that he is happy with the government and even enjoys some support.
There is a fixed agrarian tax, he can get value-added tax refunded as a tax credit and there is also another state program now motivating the farmers, reimbursing Hr 1 for each kilogram sold.
What frustrates Jorgensen is the long-discussed issue of the moratorium on land sales. According to some recent public statements by politicians, foreigners may be forbidden to buy land in Ukraine.
If that happens, the 3,200 hectares he has invested into for years may go to other people.
While some expat managers complain about Ukrainian workers trying to steal or even coming to work drunk, Jorgensen seems relaxed about it.
“Danish people do not have the imagination to predict everything that can happen here,” he said. “You just have to find a way to control it,” he added.
Kyiv Post staff writer Kateryna Panova can be reached at [email protected].
