We have been observing a certain paradox for the last few years: On the one hand, Ukraine is the fifth largest producer of potatoes in the world and, according to various estimates, produces up to 20 million tons of potatoes per year. On the other hand, Ukraine imports foreign potato starch, french fries and other potato products.

What is the problem?

Despite such prospects, Ukraine is neither a producer nor an exporter of world-class potatoes. The fact is that a large share of the crop is lost every year due to inefficient growing and storage as well as due to poor disease and pest control. Moreover, starch production in Ukraine, which could be of significant economic benefit to the state, is also inefficient, has unstable raw material supply and delimited processes of starch production and processing leads to poor results with quite significant financial and resource costs.

What is the reason?

One reason for this situation is low technological effectiveness of production, which prevents farmers from achieving high yields and low cost being the key for processing industry in the world. And lack of required incentives and prospects hinders creating and increasing processing capacity.

What is a solution?

In order to improve this situation, Central Plains Group Ukraine (CPG) is launching an ambitious ‘Green Planet’ initiative.

‘Green Planet’ initiative is a waste-free production of potato starch and its derivatives – protein and fiber, as well as other potato products with low carbon footprint.

How will CPG achieve this?

CPG’s strategy is to combine the world’s agricultural experience and the best technologies for production of potato starch and separation of its derivatives to promote Ukraine as a recognized producer of potatoes and its products.

And first of all, CPG is committed to expanding cultivation of premium varieties of technical potatoes with high starch content as the basis for efficient processing business. Only technical potatoes specially grown for processing will be raw material for the plant.

‘Green Planet’ is a long-term initiative based on the existing business of growing quality technical potatoes. Own production company was founded in 2019, and is a key supplier of potatoes for chips producers in the market. About 1,000 hectares of potatoes are planned to be planted in 2021.

Thus, CPG, already being an expert in agriculture, needs support in other critical aspects of building a processing business. This is both the right strategy for selling finished products and establishing cooperation with local farmers, since it will be difficult for CPG alone to provide the plant with raw materials, as well as state-of-the-art technological engineering being a key component to building progressive production.

Understanding these needs, CPG found support from USAID’s Competitive Economy Program in Ukraine, which agreed to provide grant assistance to the ‘Green Planet’ initiative. USAID Competitive Economy Program in Ukraine aims at supporting expansion of quality potato growing, pure starch and biogas production in Ukraine.

The “Green Planet” initiative covers three strategic areas:

1) Research of target markets for potato starch, its derivatives and other potato products, development of a strategy for entering target markets. CPG market research activities are designed to develop an effective marketing and sales strategy. A heavyweight consulting company in cooperation with the State Institution Export Promotion Office of Ukraine was involved in this study.

2) Technological engineering of waste-free and lean production. CPG involves a qualified and respectively experienced world-class engineer at the first stage in the work on starch production lines. Involving a qualified consultant will help to pass the stage of production facilities design with maximum efficiency, avoiding “beginner’s mistakes”.

3) Building a model of cooperation with Ukrainian farmers. This step will increase competitiveness of small farms by enhancing labor productivity, investing in innovative technologies, raising production standards and focusing on consistently high quality. In order to build long-term productive cooperation with farmers, CPG will teach (both theoretically and in practice) farmers in Western Ukraine to grow high quality potatoes properly, additionally providing them with planting material for further cultivation. Thus, a local product from a local farmer will be included into the supply chain for a large international buyer, which, in turn, will help expand production capacity and improve quality of local producer’s products.

Active work in all three directions has already begun and will last until November 2021, when the plant’s first stage will deliver its first product.

USAID Competitive Economy Program in Ukraine (CEP) supports startups, small and medium enterprises (SMEs) aiming to provide support for competitive industries and firms on Ukrainian and international markets, foster a better business enabling environment, and enabling Ukrainian companies to benefit from international trade.