Kormotech is going to actively invest in expansion to foreign markets

Kormotech is going to actively invest in expansion to foreign markets

Kormotech is starting to expand to foreign markets and intends to increase its revenue to $500 million by 2028.

The largest Ukrainian producer of feed for cats and dogs, Kormotech, intends to reach $150 million in sales in 2023 and will strive to get into the rating of the 50 largest feed manufacturers in the world by the American magazine Pets&Industries, the owner of the company, Rostyslav Vovk, said.
"According to the results of 2021, we were 51 in the world. Last year, we lost a few positions and were 55. It was easier for all our competitors, who are almost all located outside of Eastern Europe," he said during the Business Breakfast from Forbes Ukraine in Wednesday

According to the owner of Kormotech, the share of exports in the company's sales in 2022 was 23%. This year, in the second quarter, it reached 28%, by the end of the year, export markets will bring 30% of Kormotech's turnover. Kormotech is preparing a development strategy for 2024-2028.

According to Vovka, the first step on the way to increasing the company's turnover by three times will be made in 2024.

"The company should earn approximately $0.5 billion in 2028. Of course, these will be new factories. Of course, these will be purchases of enterprises or brands in Europe. These are new opportunities for our team, new opportunities for our employees," he said. .

The owner of Kormotech explained that the company will have to adjust its structure taking into account the shift in focus to development in Central and Eastern Europe.

Rostyslav Vovk added that the company will choose about 15 markets where it must overcome entry barriers.

"Now we simply make sales in 39 countries of the world. Next year we start expansion and (...) intend to occupy leading positions in some markets of our neighbors," he said.

According to Vovka, Kormotech's strategy for the next 5 years involves changing the sales structure from 30:70 to 70:30.

"That is, 70% of the company's turnover in five years should bring us sales not in Ukraine. We cannot simply call it export, since we already have a domestic market in Lithuania," the businessman explained.

Speaking about sales on the domestic market, Beneficiary Kormotech noted that the strategy on it will be aimed at protecting leadership positions. According to Vovka, the domestic pet food market will not grow dynamically due to the departure of a large number of people from the country. Accordingly, Kormotech will not be able to grow quickly in Ukraine, as it has a large share of the domestic market.

The company will focus on stimulating sales in Ukraine in the premium and super-premium segments, which will allow it to increase turnover. According to the owner of Kormotech, the cost of fodder between segments of standard premium production can differ by three times.

Volk noted that before the war, the pet food market grew by 20% per hour, and in 2024, according to Kormotech forecasts, it will increase by 2-4%. He expressed the hope that after the end of the war in 2025-2026, the domestic market will resume and resume its growth.

"Kormotekh" LLC is a leading Ukrainian manufacturer of cat and dog food, ranked 51st in the world ranking of pet food manufacturers and 7th in the ranking of the most dynamic pet food brands. Kormotech sells products of its own brands and partner brands in 40 countries.

The company's capabilities include two plants for the production of dry and wet fodder in the Lviv region and a plant in Lithuania. The company produces products for cats and dogs under its own brands Optimeal, CLUB 4 PAWS (TM "Meow!" and "Haw!") and under private label. The assortment includes more than 650 items.

According to the results of 2022, Kormotech's turnover grew by 12% to $124 million from $110 million in 2021. Elena and Rostyslav Vovk are the final beneficiaries of Kormotekh.

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