Family
Milk Farms

As practically proven, an investment into a large agribusiness takes 8 to 10 years to generate returns. In a country with a volatile economy such as Ukraine it is too long a term. Our assessments and experience prove that family milk farms can provide dividends twice as quicker. We strongly believe that a family business equipped with proper tools and technologies will care more about its farms than a paid worker would. A small farm is less vulnerable to environmental problems or natural disasters than a large agribusiness.

Our assessments supported by a research conducted by renown IFC and FAO demonstrate that Ukraine has a potential to grow its milk-producing market as determined by the following factors:

• Ukraine’s milk consumption is presently twice as low as that in the rest of Europe. Milk factories report a considerable deficit of quality milk.
• By 2030, the world milk market will increase by 250 mln tonnes. Ukraine has a reasonable chance to contribute considerably to that increase.
• Ukraine is in World Top 5 countries with the lowest cost of milk production.
• With new quality requirements, 1 mln tonnes of milk currently provided by individuals will need to be replaced by milk of the required quality – either from family farms or from large agribusinesses.

The project is, of course, not all about money. We do our good to make people in rural areas learn how to turn their farms into real businesses. But this is not all we care about. 

When a family receives stable revenues with promising prospects, they do not have to consider an option of leaving their farm. They team up to manage the business that generates profits.

As a result, people become less dependent on the state and run the business of their own. Stronger businesses creates a stronger business environment with cooperatives, sector clusters and recreational areas.

The project encourages people to grow. Helped by various tools, they become more aware – and less wary – of risks and changes. Enabled with new social skills, they begin to think bigger. 

Presently, Rivnenska, Khmelnitska, Ternopilska and Volynska oblasts in western Ukraine have family milk farms. We plan to expand massively and are currently in talks with many milk plants and farmers all around Ukraine. We also consult them on the way they could join the projects. We expect that investments will also be generated from all over Ukraine.

The project introduced a rigid screening procedure for all participating farms. Before becoming part of the project, the farm and its owners need to demonstrate their determination and compliance with the set requirements. 

We rigorously assess both the existing infrastructure of the farm, and the background experience and business practices of its owners. We need to make sure that the people we are about to involve are psychologically ready to make a change and, as a family, demonstrate a unified vision of the path ahead and commitment to take it. 

Assisted by our experts, the family works out a business plan and understanding of how the farm is going to grow and how the family is going to manage its small business.

First and foremost, we are. By launching the project back in 2017, we have invested over US$1 mln. into the network of existing and new farms and management. The project has already repaid a third of investment made as dividends, most of which have been re-invested. Our business model proved to be effective.

The project receives investments from farmers and partnering milk plants, which also provide the required equipment for the farms.

Over the last two years, the national and local governments have granted us over UAH1.5 mln as subsidies. We look forward to more subsidies in the years to come. 

The project is supported by international donors. In 2019, the project received a grant of UAH1 mln. from the UN Development Program.

We are supported by a wide range of people, government agencies and public organizations. We have entered into cooperation contracts with all oblast state administrations. Our experts participate in governmental working groups that draft laws to support farmers. Governments of Canada and Sweden support the project with consultations and direct donations.

The project is managed by a team of professionals with the extensive background in agribusiness and administration.

Each new participating farm is offered a wide spectrum of consultations from construction to equipment to accounting to veterinary services to optimal nourishment for cows to comply with quality requirements to selecting and reproducing the stock. We hold seminars for farmers and are always ready to answer any questions they may have. 

It is essential that we also provide an operating market of milk for our farmers that offers them competitive prices.

In other words, we do our utmost to turn each participating farm into a flourishing and profitable business.

Under the existing business plans, the investment will generate dividends of 12% annually, starting 2025 with an estimated increase of ten times of each investment by 2030. So, an investor who is making a contribution of UAH100,000, within 2025 to 2030 will receive UAH60,000 as dividends while his contribution will increase to UAH1 mln. by 2030.

All investments are protected by Ukrainian law that provides for a strict bankruptcy procedure. As an investor and part of the growing community, each individual understands its potential risks, but also enjoys dividends no other investment project can provide.

Our project has many stakeholders, including foreign governments and banks, that work as additional guarantors and controllers to protect the interests of all participants. 

Our existing network of thriving 50 family milk farms grows constantly and guarantees the success of the project. 

We re-invested UAH1 mln. of the generated dividends into development.

The project depends heavily on the pace with which the network of 5,000 farms is reached. To minimize risks, we set up a network of partners operating by a franchise and promote the projects all around the country.

We see no apparent political risks for the project. With its strong social component, the project is certain to receive support from any government, present or future. The project involves support from foreign governments.

Lack of stock required for the project can be considered as one of the potential risks. We are working on the issue by launching reproduction programs in specialised production farms.

You invest into a running business. This is not a start-up. We proved our efficiency by setting up a network of 50 fully operational farms with new participating farms joining weekly. To validate the efficiency of the proposed business model, we contracted Baker Tilly, and to have a reliable management we contracted Saenko-Kharchenko JSC. The project is transparent for all its partners who are always able to control its day-to-day operation.

It is crucial that we do not invest into a single large facility or region, but rather into many farms in many regions, thus decreasing risks of narrowly-targeted investment.