“BINFIELD – 10 years of trust” – ZERNO, the magazine for modern agribusiness
BINFIELD – 10 years of trust
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Companies are created by people, and they live like people, get sick like people, sometimes have conflicts or even break up and leave the market. In Ukrainian realities, if a company has been developing steadily for 10 years, it is definitely a success. Only organizations whose activities are based on an interesting concept for the market and are led by people with a common goal celebrate anniversaries.
BINFIELD is celebrating its anniversary, so I came to congratulate the founders and talk about the path they have travelled through the difficult years of independent Ukraine.
I was warmly welcomed by the three leaders of BINFIELD, who had been discussing current affairs in a spacious office before I arrived, but broke off to treat me to coffee and interesting stories. They were Vsevolod Benitskyi, the company’s manager and financier; Ihor Kostyshyn, responsible for commercial activities and sales; and Oleksii Hrabovskyi, who is in charge of the entire agronomic strategy and research competencies. They are completely different people in temperament and character, but united by one business, one mission and agribusiness.
There are fertilizers for sale, and there are fertilizers for professionals
– Tell me, please, why did you choose fertilizer trading as your main business? – I asked. – Of course, it is a very interesting area, but there are more profitable activities.
– To some extent it was a coincidence, – answered Vsevolod Benitskyi. – After the 2008 crisis, we met at a company that represented one of the leaders of the international fertilizer market. Compared to other sectors of the Ukrainian economy, agriculture began to develop rapidly, so we went further together. At that time, the fertilizer trading business was not as lively as it is now, but in our opinion it was considered promising. And we focused on fertilizers, without spreading ourselves thin on seeds or crop protection, and on niche rather than simple products. We still work with them.
– At that time, the specialty fertilizer market began to develop, and farmers started talking about applying them based on agrochemical soil surveys as an element of precision farming, – Oleksii Hrabovskyi joined the conversation. – We understood that there was an undervalued market niche with great prospects: professionals demanded not just NPK 16-16-16, but fertilizers that take into account the biological characteristics of the crop and soil and climatic conditions. The ten years that have flown by since then prove that we were not mistaken.
– How do you yourselves define the term “specialty fertilizers”?
– There are ordinary products that farmers have known for the last 20–30 years: nitroammophoska, diammophoska and others, – answered Oleksii Hrabovskyi. – However, if you apply a professional approach and intensive cultivation, you need to build an appropriate fertilization program that takes into account the needs of the crop, the climatic and soil characteristics of the region. As for granular fertilizers, our European partners are quite flexible, so BINFIELD can order the required ratios of the main nutrients and enrich them with meso- and micronutrients.
In fact, we entered the market with an offer to produce fertilizers for a specific customer — that was our unique differentiation on the market.
– So, fertilizers made especially for you, Madam Corn…
– Exactly. We created BINFIELD, and this became the ideological foundation of our business, – noted Vsevolod Benitskyi. – The point was that we did not just sell fertilizers — we offered technologies, responsibly providing the customer with service support for their application and data from our research. This is how we reached large Ukrainian consumers — agricultural holdings. First there were long-term small-plot trials, then trials in commercial crops, and only after that did the product go into industrial production. This process took more than one year.
– There were classic fertilizers, and we actually brought a flexible portfolio of specialty products to the market. Ten years ago, complex fertilizer consumption was about one and a half million tonnes, and the technological segment accounted for only 3–4% of it compared to today’s 30%, – emphasized Ihor Kostyshyn.
– You said vaguely “agricultural holdings”… Which holdings exactly use BINFIELD fertilizers? – I asked Vsevolod Benitskyi.
– Practically all the TOP-10 holdings, and this applies not only to complex granular fertilizers but also to other products. For example, we have been working with KERNEL continuously since 2012, and with MHP since 2014. In addition, we hold a leading position in the market for starter micro-granulated fertilizers, which we essentially drove.
– What scale are we talking about, what volume? How many fertilizers do you supply to Ukrainian farmers?
– Last year, BINFIELD supplied more than 100 thousand tonnes of mineral fertilizers. But first it is worth explaining the company’s trading business model. The commercial department is divided into two segments: the corporate and distribution departments. Until 2016, corporate sales accounted for 80% of the company’s total sales. To diversify risks, a distribution department was created that same year, whose main task was to attract small and medium-sized agricultural producers (companies with a land bank of 500 to 10,000 hectares). Now our customer base includes more than 500 active counterparties, 70% of whom have been working with us for more than three years. We practically never lose partners!
Oleksii Hrabovskyi: R&D sites and solutions for farmers
– How do you find a balance between premium fertilizers at a higher price, farmers’ agronomic needs and their financial capabilities?
– First of all, we are in constant communication with our customers in the fields — both the commercial department and the agronomic services. We see everything that happens there and offer solutions that make it possible to obtain an additional yield increase.
If we consider soil application of fertilizers, these are products of the FERTIS NPKbrand, whose flexible production process makes it possible to take into account the results of agrochemical soil surveys and the biological characteristics of the crop. Based on the agrochemical soil surveys that customers and agrochemical laboratories have shared with us in recent years, it has become obvious that there are certain patterns of low content of individual micronutrients. Understanding this, we offer agricultural producers a specially developed FERTIS PREMIUM NPK fertilizer line with a high content of meso- and micronutrients. A properly balanced fertilization program always provides an additional yield increase and profit and does not necessarily entail additional costs.
– We also run mineral nutrition research centres, – noted Vsevolod Benitskyi. – We created the first one at the Druzhba Nova agricultural LLC together with our partner COMPO EXPERT. Oleksii, how long have we been doing research?
– We are now entering our sixth season. We are constantly bringing new technological products to market, – noted Oleksii Hrabovskyi. – There are fertilization solutions that we demonstrate and promote among farmers every year in order to increase yields in our partners’ fields. However, one of the key tasks of our work is the introduction of new products that help solve complex crop fertilization problems and enable agricultural producers to earn additional profit.
Another key area we have been working on in recent years is optimizing nitrogen nutrition with the nitrification inhibitor NovaTec ONE. The product’s task is to minimize losses of mineral nitrogen through leaching into the lower soil horizons and due to denitrification. We study effective rates and methods of application and track a large number of indicators: we determine the mineral forms of nitrogen during the growing season to understand the dynamics of nitrification, and we track microbiological indicators such as denitrification and the activity of beneficial soil microflora. Analyzing a set of indicators allows us to objectively justify the feasibility of the products and solutions we offer on the market.
We launched another R&D centre in 2021. It is located at the 240th kilometre of the Kyiv – Odesa highway, near the village of Synky. Our partner here is the Rodyna farm, which has been using BINFIELD products for many years and has a high farming culture with proper crop rotation, ensuring its leading position in crop yields in the region.
The work of our R&D centres is focused not only on research but also on exchanging experience among agricultural producers, scientific institutions and foreign colleagues. Understanding the challenges farmers face today and their needs, we improve and update products in close cooperation with product managers and technologists working at the production facilities of our foreign partners. Every year more than 100 trial variants are set up at our main locations, and they are analyzed in terms of both agronomic and economic efficiency. We can confidently state that there are currently no analogues in Ukraine of such large-scale projects working exclusively on crop fertilization, and we will expand our research presence in all its regions.
Be unique, create advantages
– Is your main advantage that you create fertilizers for a specific crop of a specific customer?
– Exactly! But not only that…
– From the very beginning of our business, we have worked on the principles of openness and trust. In particular, there were constant business trips to our partners’ plants. The delegations included not only managers and chief agronomists of agricultural enterprises but often also young specialists, students and beginners. Now we meet these people among the heads of agronomic services. And they remember how they travelled to the plants, how they were welcomed, how they were shown the production process and new technologies. The next stage was the creation of a network of demonstration fields to clearly show how our products work in different soil and climatic conditions. So this openness became the foundation of future customer loyalty for our business.
– What additional profit does the use of your premium fertilizers bring to the customer, how does it compare to the average market price and how does it affect yields?
– Using our premium fertilizers ensures additional profit. For example, the price of our FERTIS NPK complex fertilizers is 15–20% higher than the market average. However, this price difference comes from the additional sulphur, meso- and micronutrients they contain, which play an extremely important role in fertilization efficiency, making it possible to obtain additional yield increases and, accordingly, increase production profitability, – said Ihor Kostyshyn.
– And I would add to what Ihor said: you need to count not one season, but a business of three to five cycles. Customers who have been working with us for a long time may experiment and look for other products on the market, but basically they have a stable result and are quite satisfied with using our products, – Benitskyi emphasized.
System and diversification
– Is BINFIELD a systematic company? How is it structured? – I asked the BINFIELD leaders.
– Yes. Today it is a systematic company. We have three working shareholders with separate areas and responsibilities. The main activity is trading, so the backbone department is the commercial one. Accordingly, a powerful logistics and foreign trade department is needed to fulfil commercial tasks. It now employs six highly qualified specialists. In addition, the company’s structure includes the marketing and agrotechnology department, the finance department and accounting, as well as the administrative department, which is responsible for the effective interaction of the company’s parts.
To diversify risks, BINFIELD has created its own logistics and warehouse network, which combines three complexes with the capacity to store more than 15,000 tonnes of fertilizers at the same time. Products are delivered by sea, rail and road. We use the logistics capabilities of the Baltic–Black Sea basin (port of Klaipėda – Lithuania; port of Police – Poland; ports of Mykolaiv, Kherson, Chornomorsk – Ukraine).
Within the framework of agronomic research work, an agricultural production project has been formed, which today has enormous development potential.
– I envy your coherence and team spirit. And how do you decide on strategy?
– We have a board of shareholders: the three of us sit down at the table and make all strategic decisions. This concerns creating new business areas, investing and reinvesting in certain projects and important personnel decisions. Even wrong decisions are our joint decisions. The fact that there are three of us prevents any one person from making a wrong decision; there must be a logic to events. We believe that a business of two is problematic, while a business of three is more viable. So management is carried out by the board of shareholders, where decisions on strategic development issues are made, and the next level is the board of directors. It is much broader and includes the heads of the company’s departments and separate business units.
Our business is a combination of processes and factors that are difficult to manage, since at the same time, in different places, a large number of cargoes are being moved, cleared through customs, taxed, contracted, stored and sent to customers. We need to carry out global business planning, and the board of directors ensures this. Tactical business management takes place at weekly meetings. Every manager has a voice and is listened to. The principles of openness and trust give good results in managing the company.
Vsevolod Benitskyi: We started with a transparent business and will not deviate from this path
– Over the past 10 years there have been global crises… Like in 2014, when the hryvnia collapsed from 8 to 24 per dollar…
– Yes, we switched to manual management of the business. It was not without luck. Experience helped. There was no foreign currency on the exchange for foreign trade activities. Through partner banks, we had to buy currency from our customers — agricultural producers who were exporters and had foreign currency earnings. But we also had to learn to work with market volatility. This is how the future communication and trust with which we have come to the present day were formed. We can proudly say that we have fulfilled all our obligations to all our partners.
We have learned an incredible amount over these years. A crisis is a window of opportunity that forced us to work efficiently and quickly. Today we see our business online, and accounting is built on the bank principle — a balance for every day.
– OK, those are external crises. But have you had internal crises related to factors within the company?
– There were no global crises, although there were difficulties. Internal crises were always caused by external ones. They were of different nature — economic, political and social. The state has changed significantly over the past 10 years. From the very beginning, we chose one path for ourselves — that of a transparent, open business. We have no disputes with customs or the tax authorities; we are completely transparent and understandable to our customers and supplier partners. BINFIELD enjoys a high level of international trust. We receive guarantees for deliveries with deferred payment to us from leading European export credit agencies.
– Which companies do you work with, who are your permanent partners?
– We work with COMPO EXPERT, a leading producer of specialty fertilizers, micronutrient fertilizers and plant growth stimulants. Last year it was acquired by the Polish holding GRUPA AZOTY, one of the largest fertilizer producers in Europe and at the same time our important partner. Another strategic partner of ours is the Lithuanian fertilizer producer FERTIS. In Lithuania we also cooperate with a large state-owned fertilizer producer — ACHEMA. For many years, our partner has been the international holding ICL, a producer of a wide range of highly efficient fertilizers. We are open to any productive partnership.
Ihor Kostyshyn: You have to believe in the product
– There are so many sellers of complex fertilizers and micronutrient fertilizers on the market… How do you convince a customer of the effectiveness of working with you?
– New players are entering the market with an unprepared sales ideology and product line development strategy. Some lack experience, others lack stable raw material supplies, unlike responsible international companies that have a history, a strategy and enormous experience in creating products, which is why customers value working with them. We try to build our business on the same principles. Stable companies are in trend.
– However, that is under normal conditions. Now the market is very difficult and volatile. Commodity markets have soared uncontrollably.
– Yes, I don’t know of other markets with such volatility, where you could imagine that last year corn cost 145 dollars and this year — 300…
– And phosphorus?! Everyone sees that corn has become more expensive and doesn’t understand why phosphorus has become more expensive! Because demand is growing! The Earth’s population will soon reach eight billion. And it is growing primarily in third-world countries: Asia and Africa. A lot of food is needed. During the coronavirus crisis, money was “printed” to overcome it and support the global economy. And the money supply has to be absorbed. First of all, it is absorbed by commodity markets. Energy prices went up, followed by metal, and timber shot up sharply. Deferred demand also added momentum. Today we have production volumes ordered, but we cannot set prices in the medium term. Only those importers who have direct access to the manufacturer and timely, objective information will keep working.
We choose human qualities and grow professionals
– What are your main requirements for a BINFIELD employee and for a leader?
– Let’s start with the fact that we are a young company with young employees. We grow specialists.
– You probably pay high salaries… Otherwise you can’t keep young people…
– We pay decently for work, but that is not the main reason to work at BINFIELD.
– It is harder with young people, you are right. We have few people in the 20+ age group; the main group is 30+, about 80% of our staff. There are two factors we pay attention to: professional and human qualities. A professional with poor human qualities is not an employee of our company. There must be a balance.
– Don’t you think that is a somewhat romantic approach?
– It is romantic-pragmatic. If you let a “toxic” professional into the team, you destroy the team. If we consider two candidates with negative and positive human qualities, where the first is a professional and the second is not but may become one tomorrow, we will lean towards the second option and train the specialist — they will be loyal both to the company and to colleagues.
– The company does not live for one day. A systematic approach also works in personnel management. We have very open relationships with employees; practically everyone has access to us. We have no closed doors or personal secretaries. We know our employees and their families; we are friendly and loyal, but demanding… More precisely, we are becoming more demanding. Everyone here lives with one goal and knows what each of us and all of us together need to do. A random person who came to “sit it out” for a while does not stay with us; they feel uncomfortable here.
Time for publicity
– And why are you now including some publicity in your practice?
– The time has come. The BINFIELD brand has become more recognizable, and customer loyalty has grown significantly. This is helped by substantial marketing and research activities. High activity and presence in Ukraine’s regions attract the interest of a wide range of existing and potential customers. The essence of our interaction with partners is reflected in our slogan “YOUR FERTILIZER PARTNER”.
– Do you have a code of success for BINFIELD?
– There is a code of hard daily work. Success is a derivative of work. But there are certain rules. Once you enter the office of BINFIELD, you accept the company’s values: professionalism, decency, honesty.
10 years of ACHIEVEMENTS AND PROSPECTS
– How do you yourselves assess your ten-year journey?
– BINFIELD – is like our child; we have invested an active part of our own lives in it, and it has been a rather productive period. BINFIELD HAS A STRONG TEAM, A GROWING DYNAMIC CUSTOMER BASE, A WIDE PRODUCT LINE BUILT ON PAINSTAKING RESEARCH, A DEVELOPED MATERIAL AND TECHNICAL BASE AND A STABLE FINANCIAL POSITION.
AND MOST IMPORTANTLY — THE TRUST OF CUSTOMERS, SUPPLIERS AND PARTNERS.
And we never stop setting ambitious goals for ourselves.
BECAUSE WE ARE BINFIELD!!! WE ARE ALWAYS MOVING FORWARD!!!
