From reorganization to modernization: the strategy of Polotsk Dairy Plant

The holiday honoring the workers who ensure the country's food security will be celebrated not only by dairy processors at JSC "Polotsk Dairy Plant" but also by representatives of many other professions. Today, the plant is the parent enterprise of the Polotsk Agro-Industrial Association (APO), which includes 44 economic entities, including 36 agricultural, 3 processing, 4 service, and 1 trade entity in 9 districts of the Vitebsk region. The total staff of Polotsk APO is 8,240 people.

Both "Safiyka" and "Vasilek"

It has been less than two years since the young, ambitious General Director Vladimir Safronov took charge of the plant, but the results already indicate that the enterprise is in the capable hands of a talented leader. During this time, the volume of raw materials processed has increased from 220 tons to 540 tons per day (almost 2.5 times), the quantity of products manufactured has increased by 235%, sales profitability by 4.6%, and the average salary has risen from 983.6 to 1401.9 rubles (by 142.5%). In June 2022, a reorganization took place: JSC "Moloko" of Vitebsk was merged with Polotsk Dairy Plant. The consolidation of production capacities gave a second life to the regional milk processing enterprise. It is now the production unit in Vitebsk of JSC "Polotsk Dairy Plant".

– A huge amount of work has been done to merge the enterprises, and it will require considerable effort to achieve the final result, – says Vladimir Safronov. – But the main social goal – the continuation of production activities at the sites of the reorganized OJSC "Moloko" of Vitebsk, the preservation of jobs and the production of dairy products with the "Vasilёk" logo, loved by customers, – has been achieved. Now we are one enterprise, existing on the Polotsk and Vitebsk sites. Raw material redistribution has been carried out to achieve the greatest economic effect. The Vitebsk division produces cottage cheese, yogurt and dessert groups, ice cream, sour cream with a fat content of over 15%, butter in small packaging, as well as bottling of drinking milk in film; in Polotsk – bottling of milk and kefir in PET bottles, sour cream with a fat content of 15%, bulk and large-package butter, dry milk products, glazed curd snacks under the "Mi-Shu" trademark are produced; in Shumilino – cheese production. If there are any adjustments to the sales markets, we make a decision promptly. There may not be enough raw materials, but the quantity we have today allows us to operate profitably. By the end of the year, we plan to make a profit of about 14 million rubles.

The main goal of Decree No. 70 of the President of the Republic of Belarus, according to which the APO was organized, is to create conditions for the agricultural sector of the Vitebsk region to reach a level that allows strengthening its position in domestic and foreign markets, explains the head. The cornerstone of this is the production of goods and bringing them to the consumer, and after sales – in a closed cycle – returning funds to the agricultural enterprises that produced the product, for their development.

In agriculture, for the first 9 months, Polotsk APO produced gross agricultural products worth 216 million rubles, or 100.8% of the 2021 level. 84 thousand tons of milk were produced, beef cattle production – 7.9 thousand tons, pigs – 1.5 thousand tons. Following the harvest, the following were obtained: 149 thousand tons of grain with a yield of 22.5 centners/hectare (139% of the 2021 level); 12 thousand tons of cruciferous crops; 667 tons of buckwheat, 2280 tons of potatoes.

Raw material zone is a priority

– Now we are working to expand the conquered market, find raw materials, produce products, generate working capital, and develop, – says Elena Garkusha, Head of the Economics Department. – The APO's own raw material zone includes 36 agricultural enterprises. At the first stage, we set the task of preserving the entire dairy herd and all cattle. Naturally, specialists are needed, so the personnel issue is important. We are working on training young people and attracting them to our farms. To do this, we need to create a base, provide them with more modern dairy farms and complexes, so that a young specialist would be pleased to come there, stay and settle. The state has allocated significant funds for the construction of such facilities, and a simplified scheme was also considered, which does not require additional costs for the development of new, rather expensive projects.

In 2022–2025, it is necessary to carry out modernization, reconstruction, and construction of 20 livestock housing facilities with a funding volume of about 54 million rubles.

The entire complex of works will allow for an additional increase in calf population by 2650 heads, cows – by 1030 heads, milk production in 2023 – by 8867 tons, additional revenue in the amount of 1.3 million in the current year and 8.2 million in the next, and reduce costs by 1.1 million rubles.

In 2023–2025, it is planned to build or reconstruct 12 dairy farms with a total cow population of 6360 heads and 5 facilities for loose housing of cattle for 1 thousand heads on the basis of reconstructed livestock facilities.

The implementation of this program will eventually allow for full self-sufficiency in milk production from its own raw material zone.

Building for the Future

Therefore, the main focus of efforts today is directed towards the construction of facilities at agricultural enterprises.

– Polotsk Dairy Plant is included in the list of integrator organizations that receive budget loans under Decree No. 387 of the President of the Republic of Belarus to finance the construction and reconstruction, capital repair, and modernization of agricultural facilities, – says Vitaly Chirsky, Head of the Capital Construction Department of the enterprise. – Thanks to this, the most significant of them will be commissioned by January 1, 2023. These include a milking and milk processing unit in the village of Nikolaevo, Miory District, a farm for non-tied housing of young cattle in the village of Selyavshchina, Rossony District, and a dairy farm with a milking and milk processing unit and landscaping of the adjacent territory in the settlement of Zakharnichi, Polotsk District. In general, work is currently underway on 7 important agricultural facilities located in different districts of the Vitebsk region.

Among the New Products is "Premiola"

– We produce about 80-90 tons of whole milk products per day, – says Elena Romanovskaya, Deputy Chief Technologist of the production unit of OJSC "Polotsk Dairy Plant" in Vitebsk. – Thanks to the merger, the product range has expanded, labor resources have been preserved, and wages have increased. The unit is operating at full capacity. A significant portion of the equipment here has been modernized, which allows for the renewal of the product range. In the near future, we will launch a new dietary fermented milk product "Premiola" containing buttermilk, which is suitable for those who adhere to a healthy diet. In January of this year, a new line for the production of PET bottles was commissioned, into which milk and kefir are bottled. "Premiola," buttermilk, and yogurts will also be bottled in this new type of packaging for us. The products are released under the "Vasilok" brand, but since we are a single enterprise, we also use "Safiiki" packaging.

And "Mi-shu" is loved everywhere

“High-quality products of Polotsk Dairy Plant OJSC are in demand in many countries around the world,” says Olga Voroshkevich, Head of the Foreign Economic Activity Sales Department of the enterprise. “The largest share in product exports falls on the CIS countries. In addition, exports to China, the Philippines, Mongolia, Lebanon, Malaysia, Oman, Saudi Arabia, the UAE, Egypt, Pakistan, and Singapore are growing. And in 2021, we mastered new geographical niches: the markets of Japan, Vietnam, and Yemen. Our export geography covers more than 34 countries worldwide. Export diversification is one of the priorities of our foreign trade, as increasing sales markets helps to mitigate foreign trade risks.”

In the exports of Polotsk Dairy Plant OJSC, about 50% is dry milk and whey, 22% is sweet cream butter, 17% is cheese, and 11% is whole milk products. For 10 months of the current year, dairy products worth more than 41.5 million dollars were exported. Compared to the same period last year, exports in monetary terms increased by 2.2%.

We are carrying out systematic active work to expand not only sales markets but also the product range in already developed markets. For example, we plan to organize ice cream supplies to the market of Uzbekistan, where we regularly export our famous frozen glazed curd snacks "Mi-Shu".

Despite the difficult international conditions associated with the imposition of sanctions, we have managed to maintain the export volume.

A worthy contribution from everyone

These days, the thousands-strong team of Polotsk APO receives congratulations on the holiday, and many of its workers – well-deserved awards. After all, they are all involved in ensuring that Belarusians have tasty, high-quality products on their tables. These are people who grow grain and vegetables, raise livestock and treat animals, process milk, grain, and meat, produce mixed feeds, build agricultural facilities, deliver products, feed machine operators, and sell the products manufactured by APO in its retail network.

The labor of agricultural enterprise workers and APO divisions such as UP "Rudakovo", OJSC "Polotsk Feed Mill" and its branch "Miorsky KKZ", UP "Miorsky Meat Processing Plant", UP "Safiiskiye Dary", UP "Titovo", UP "Cheressy", UP "Bliznitsa", UP "Polotsk-Milk", branch "Klyastitsy-Agro", UP "Goryany-Agro", SUP "Dobrinskoye", which employs specialists in veterinary, zootechnical, and agronomic fields, a mechanized detachment, the retail chain "Safiyka" of UP "Zolotaya Niva", comprising 32 stores and 3 canteens, and many other agricultural enterprises located in various districts of the Vitebsk region.