The lack of a clear plan in implementing of an innovative projects is the main reason for the failures of many agricultural companiesMore
A few days ago, CEO of SmartFarming Artem Belenkov gave an interview to an information resource censor.net, in which he spoke about how the idea of doing business in the sphere of high technologies for agriculture appeared, about the difficulties encountered and how the company will evolve in future. Read the full interview here.
In 2008, I graduated from the National Academy of Management. In summer, when I had a part-time job, I traded shares on the New York Stock Exchange, but then came the answer on my resume from Procter & Gamble, which meant they were interested in me. They took me on as an intern manager in the department of physical logistics. I quit that position after working up to December 2008, at the height of the global financial crisis, when it became clear that the financial sector will recover for a long time.
Virtech Investments. That was the name of the company, which I founded with a few guys from Israel, who traded stocks and options. We developed the theme of options and futures in Ukraine. It was the year of 2011. We were "market makers" and managed the assets of individuals and other investment companies.
In 2013, it was the first time I saw that Ukrainian farmers are still using paper maps of the fields. Due to the lack of technology in agricultural holdings, there was a complete misunderstanding of what is happening in their fields.
I came into the new business only with my own money, which I earned on stocks and options. I think that I have invested about 100 thousand dollars in this business. If we consider the education, purchasing a car, etc., probably the sum will be higher.
Employees of the new company were the students specializing in cartography, classmates of my brother, who studied at Taras Shevchenko National University at that time.
For serious it all started in August 2014. We involved into the first big projects: we have implemented technology of GPS monitoring, management of land bank of agricultural companies. A serious game with more or less serious money at stake began. If you have a company of 100 thousand hectares, then probably about 50 thousand of lease agreements and contracts listed in Excel won’t tell you anything, and it’s not even the fact that the list is filled properly. Therefore, you do not know where you may face the risks.
The first thing we do - conduct a full physical audit of the contracts. We have mobile outsourcing teams. The output of this team is the creation of a file, which shows the real picture of the state of affairs. For example, this contract for the lease of land lacks the needed act, and this one contains no signature of the property owner. We fill in all the information: areas, lease, sums of payments.
Our customer had 41.5 thousand ha of land. After making a field measurement, we saw that there was only 40.3 thousand ha. Which means he allocated more money for those 1.2 thousand hectares per year. It is hundreds of thousands of dollars a year.
The customer sees the entire history of the land bank. It often happens that some outlines that the company rents, are not cultivated. Moreover, there are some fields that the company cultivates, but not rents. That is why we show the different risks and help identify problems.
The largest project of the company – "Mironov Bread Product» of Iurii Kosiuk.
We work with almost all the major holdings. Either we supply them with data or we train them, sell them drones, or implement turnkey projects. We also carry out due diligence at the time of the purchase and sale of land, audits for investors.
Starting from the year of 2018, we want to enter the market with a new product. CRM - system of relationship management with proprietors. It will be a convenient database of information on the state land bank with cartographic visualization and integration with 1C database to account for the payment of taxes and rent.
We have divided the business and create a separate company AG Advisors. This is a pure management consulting. There will be a block of the land and everything that is connected with it. We see ourselves as a consultant, as the prime contractor for a maximum automation of management. That is, we talk about how to manage the land bank, to manage commercial activities and technology.
Now we make a separate project. We want to make the union of advisors, so when the investor comes, we would be able to pick up the assets, legally accompany the transaction, carry out a land audit and financial consulting.
SmartFarming concentrates on consulting and services in the agricultural production. In the future, we will do the Turnkey Plant growing projects for investors. We will pick technologies, use our own equipment to administer fertilizers and plant protection products, and use the drones to do monitoring of seeding and administer plant protection products".
Until the end of the year we will buy our own agrochemical laboratory. As a result, the client will receive data about the quantity of NPK in the soil, its acidity, location of the sand, clay, or humus.
Our task is to show which part of the field needs a minimum of investment, because you can’t get more than you have, and which part of the field needs more active work to obtain conventionally not 8, but 12 tons of the crop from the hectare.
All the rest is ineffective without the introduction of the technology of parallel driving and the correct performance of technological operations in the field.
$ 2 million – that is how much of our and our partners’ projects we have sold in the last three years.
Cooperatives is a tricky part In a long-term perspective, I believe more in cooperatives than in holdings. We are interested to sell not to small farmers but to consultants who will somehow help them.
Turnkey audit of land bank for holdings totals 2-2.5 dollars per hectare. Monitoring of crop conditions with drones - 15 UAH per hectare. Measuring of fields - 15 UAH per hectare. Soil sampling - 5 dollars per hectare. Consulting services costs depend on the volume of applications. Satellite monitoring for a year - 5 UAH per hectare. The prices are very competitive.
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