GTInvest partner in the industrial equipment market - Kholod-Engineering company was founded in 2012 and specialized in supplying industrial, commercial, agricultural, and technological equipment supply services to the Ukrainian market. It is a full-service supplier of equipment and technical solutions for the largest enterprises in Ukraine with highly qualified engineering staff. The company has completed over 350 projects of different levels and accumulated vast experience, which is being constantly analyzed and improved. In an interview with Alexey Prokhorenko, CEO of GTInvest, Ivan Pugachev, Technical Director, talked about the main trends in the industrial refrigeration market and vegetable storage. We discussed how to freeze borscht on an industrial scale or how to deliver Ukrainian cherries to China, preserving their freshness.
— Ivan, could you tell us how the ongoing crisis affected your business and relations with your clientele?
— We are an engineering business, and the crisis has not affected us generally. The only exception is most negotiations moved online, but the projects in progress are moving forward firmly. Of course, the crisis has made some adjustments, but this is more about organizational issues and communications. There are several directions in the industrial cold market, and they are still actively working. We are mostly engaged in fruit and vegetable storage, and here everything that is prepared in spring is technically executed in summer. The groundwork for the project is laid in the winter. The physical presence at the site is needed in the summer, and in the fall the harvest is put in. Now the equipment is in demand, and since retail is active, new stores are opening.
— What is going on in the industrial refrigeration market and what are the main trends for 2021/2022?
— Now the berries sector is actively developing in Ukraine, a lot of businesses growing berries are opening. Accordingly, there is a need for storage. They gladly buy Ukrainian berries abroad which are exported to England, Holland, France, the UAE. Today there are as few as 30 powerful facilities for freezing and storing berries in Ukraine, while in Poland this number is around 280. There is a lot of room to grow. Our market must be saturated. Besides that, another actively developing market is semi-finished products. A few weeks ago, we finalized a project where we technically implemented a shock freezing chamber for borscht. Our goal was to carry out freezing at the optimal speed so that the blast-frozen product does not fall apart and remains whole, the cabbage stays crispy, and the dish would still taste delicious. In general, the convenience foods market is burgeoning now. The products should be properly frozen and stored to preserve the taste and nutritional properties.
— How harder is it to maintain your leadership in the market?
— It has always been challenging to keep the lead because there are always competitors moving forward and offering new services. In my view, the market leader is the one who offers more profit-making solutions and a precise approach to their implementation. Of course, it is not always possible to be the first in terms of profits and quantity of implemented projects, as many companies focus on cheapening their services. Market leaders consistently adhere to quality and do not resort to cheapening. I am talking now about meticulous management, strong engineering support, and technical equipment - all this allows one to keep the lead in the market. My observations show that about 40% of customers pay more attention to quality than to price.
— What should potential customers pay attention to when ordering industrial refrigeration?
— When a tender starts and several companies participate, each company often interprets similar equipment differently. Namely, they tell customers at what capacities the equipment will operate, factoring in certain weather conditions. For example, the heat-exchange unit will provide output X under 35 C in the summer and Y output at 25 C. Even though it is a unit with similar specifications offered by other suppliers, customers need to pay attention to this. A customer, who is not a technical pundit, often finds it difficult to make the right choice, and in the end, he is guided by the price. However, the price is not the determining factor. It gets to the point when customers expect the promised performance, but they are offered the characteristics at which this equipment simply cannot work for various reasons. Sometimes we manage to change our customer's point of view. But customers need to figure it out for themselves or hire an outside advisor. Often, we meet, talk, and show them our work. We explain how the equipment will work under different conditions, given the performance characteristics of the manufacturer. I would recommend looking into the supplier image, reviews, number of completed projects, the equipment condition after several years of maintenance. And always compare equipment offers at the same specs.
— What was your most non-standard project?
— The most exciting projects now are related to freezing and cooling. We put in place several technological processes to retain the properties and taste of the products after defrosting. For example, we did a project on cooling cherries - hydro cooling. This instant cooling of berries with cold water at 0°C, which allows them to remain fresh for 3-4 weeks. During this time, the cherries have time to get to China. Although, they spoil within a week under standard conditions.
— What new products do you launch?
— We are witnessing a revolution in refrigeration technology now because of the phase-out of Freons and the transition to environmentally friendly refrigerants. This trend is coming from the EU. The global change of equipment is rolling out, and this will soon come to Ukraine. We, in turn, will not be able to stay out of this global process. We are already beginning to adopt new laws, put in stricter control over the use of freons. Several large CO2 refrigeration systems have arrived in Ukraine, and this is just the beginning. So now companies must develop technical expertise to work with the new equipment.
— Tell us more about your experience in projects of bulk and container vegetable storage facilities? Which options are more popular, and under what conditions are they ordered?
— Every year, we do bulk and container vegetable storage projects. It is called Actively Ventilated Vegetable Storage with high-powered air flows. This type of storage is used for onions and potatoes. But last year, we implemented this project for pumpkins and got great results. It is hard to say which type we like better. Container storage is cleaner and arranged. The main benefits of bulk storage: ease of organizing storage, using storage space with maximum efficiency. It is suitable for storing large volumes of products, and there is an option to minimize the amount of technological equipment. Other pros are the high speed of erection of structures and affordability of the project. It is the cheapest way of storage, but it is a more complicated unloading process. It is hard to place vegetables by grade (for example, with fixed walls) and remove sick fruits from the storage. But at the same time, there is no need to purchase containers and racking systems. However, one should consider that maintaining optimal atmospheric conditions is almost impossible without advanced systems of active ventilation and microclimate.
— How did you come to your production of semi-circular ventilation ducts for bulk storage of vegetables? Is this equipment competitive in foreign markets in comparison with alternatives?
— We have been working on our production of vent ducts for five years. We started in Donetsk, but the military situation had changed our plans, and we had to move to Kyiv and start all over again.
Half-round vent ducts are bent metal of a specific form, radius, with a defined wave pitch. The configuration of the product is not complicated but quite hard to produce. It requires special equipment, which was not available in Ukraine. But we developed this equipment with our engineers. We have developed the design and manufactured parts. Every year we equip vegetable storehouses with this equipment. It is exceptionally durable and has an excellent track record with a уgood price and quality. Many did not believe it is possible to produce vent ducts in Ukraine, which can handle the great weight, but it has become feasible with thick metal and our proprietary technology. Similar equipment is available in Holland, but it is way more expensive than ours.
— How long does it take to estimate a new project and to complete it fully?
— Our engineers can estimate a project for up to 4 days. Then negotiations on agreement of technical details and agreement of contract with the customer take 2-3 weeks. The manufacturing and delivery of equipment - takes about two months. Total project with an investment of up to 300 thousand euros takes 3-4 months. Large projects take longer. Thus, our largest project with huge investments took a year and a half.
— What technological innovations do you use in your business?
— We have experience in the management of vegetable storage, we have developed our management system, invested in software development, but now everything is at the testing stage. It is a system with lethal control indicators, which you can monitor and adjust on a tablet. However, it takes longer to implement since we do not have the right to fail - its cost is too high.
— How have eco-trends affected your niche?
— In our business, eco-trends only affect product storage. We have equipped the facility where we freeze products with an ECO certificate. When doing the project design, one needs to consider all the details to avoid crossing dirty and clean zones in the technological processing of products. Even if the customer has concurrent processes with non-eco products, we need to make sure that these processes do not overlap.
— How does global warming affect business?
— In our case, we are talking about seasonality. But the last warm winter did lead to a collapse in the vegetable storage market. After all, many people were cooling their products with the outside winter air, so they suffered losses. After that, they began to deliver equipment, because in a warm winter without it you cannot store products. So, when it gets warmer, the demand for our services only increases.
— What are the rules of life that help you grow?
— We never leave our customers in difficult situations; we always meet them halfway and help them. We have the image of a reliable partner in the Ukrainian market. Be sure to be diligent and always put quality in the first place. Our pricing is transparent, and we are always ready to explain to our customers the difference between various equipment and technological processes.
— The whole world is aiming at better service. What do you do about this?
— Service is a complicated process from the technical point of view because it is not cheap to keep a staff of specialists ready to visit a site promptly to solve any technical issue. But we always respond quickly to our customers' requests. Our company is up and running 24x7, and we are always there to help in case of emergency.
