Enzym is Ukraine’s leading producer of baker’s yeast, exporting 40 percent of its total production. Thanks to its long tradition of quality, biotechnology research, marketing and distribution capacities, today the company reaches an increasing number of international markets with a diversified product portfolio. For Olena Vovk, working at her family company marks a homecoming in which she can combine the skills acquired studying international business and finance at Columbia University and her previous professional experience in international finance
What brought you to your current position at Enzym, and what is your overall vision for its development?
This company was managed by father and owned by our family. Studying in the US and then working for a foreign investment company here in Ukraine, I had never previously been attracted by the idea of working in the family business. But when I returned to Ukraine and saw that there were so many things happening in the company, and in the country after 2014, I was drawn very strongly to Enzym. It was not just a traditional baker’s yeast company making one product; it had started to export, launch partnerships with many distributors, and become interested in diversification, looking for new directions based on its production expertise. For example, one branch of the company went into pet food and is now the market leader in Ukraine. So I started working in Kyiv branch, helping launch the sales and marketing and helping my father to develop new directions for this business.
While Enzym as a company has been around since 1994, it has roots that trace back to 1870. Can you explain something about the traditions and history of the company?
We are in an extremely traditional field. You could actually call baker’s yeast an ancient industry. Only this century are other ways to use yeast starting to emerge due to research and development of the yeast cell itself. In the traditional market, we felt we had achieved all we could: we have more than 50 percent of the market in Ukraine; every third piece of bread is baked with our yeast; and 40 percent of our production is exported, partly to minimize risks of being in just one country, but also because we set ourselves the highest standards. Then we started to look at how to develop the product, as the yeast market cannot really grow; in fact, new bread-baking technology means bakers can use a little less than before. We started looking at the yeast cell, which offers so many opportunities. It’s a source of so many nutrients and natural origins, which can be applied in so many industries. To give you some examples, it can be a natural substitute for monosodium glutamate; a probiotic supplement in the animal feed industry to reduce the use of antibiotics; its parts can be separated and used further as a source of amino acids; and in the pharmaceutical industry, it can be used as a nutrient to feed the growth of other active materials.
What’s your investment policy with regards to research and development involving yeast?
There are about 10 to 12 people employed in our R&D department, and then we have many students who come to do practical fieldwork. Our employees also spend time in a laboratory at the University of Saarbrücken in Germany as we have a partnership with that institution. In our R&D department, they say the hard thing is to focus – the yeast cell offers so many options! We are selecting yeast strains to find the ones that are most applicable to these different directions. In the meantime, in our lab we do a lot of selection for different baking needs; for bread that needs to be made fast, or another with a special aroma, and so on. We also produce wine yeast, which is a completely different strain, and other new applications that we haven’t industrialized yet. We think that we are three to four years from rolling out new products. We are looking for added value and the future of the industry. As for our core business, baker’s yeast is not going to go away; it’s a very stable industry and a good platform from which to expand into other areas. We are looking for more R&D partners and tie-ups with scientific institutions. We are also looking into pilot plants to test our products that have been developed in the lab on a bigger scale before going into commercial production.
What different kinds of products make up that core business and what gives Enzym a competitive edge in Europe?
Baker’s yeast includes different types for home baking, industrial baking, as well as wine yeast and other types for small craft alcohol brewing, which has become very popular once again. Now the company is the undisputed leader in Ukraine’s yeast market and exports to 14 countries.
Most of our fresh yeast exports go to Europe, while smaller amounts of dry yeast are exported to Asia and Africa. Europe is very important to us for several reasons: first, it gives us stability, considering possible currency fluctuations or crises in the Ukrainian market; second, it sets us a standard of quality and a way for us to develop by following new trends and the concept of fair but tough competition. We have a cost advantage as our raw material is located very nearby in Ukraine’s sugar factories, and, even more importantly, we have the size and flexibility to produce whatever is needed, be it our own brand, private label, dry yeast or fresh yeast with greater plasticity, according to the uses required by different brands. It may seem surprising coming from Ukraine, but we have developed a reputation in Europe for supplying a quality product with complete stability in terms of delivery and price.
How would you describe the Enzym brand, and how would you like German consumers to think about your products?
We are stable, flexible, reliable and innovative in that we can go ahead and offer our clients whatever it is that they need. At the moment, we are looking to develop more business in Germany along with different partners in the country. Europe, in general, is a tough market for yeast, with many competitors that are working on their share.
How do you go about trying to break into a new export market?
All markets are different. But the first thing is to find a proper partner. We have very different kinds of partners in different markets; it can be a distributor providing a full range of products for bakers, or other kinds of arrangements, such as private label. We need a reliable and ambitious partner that knows the market very well, with a big database of bakers they are already providing to; that’s where we can find synergies. Being flexible is the key in such a competitive partner.
How healthy is your product?
There is nothing more natural and healthy than yeast. It has always existed in our world, and our production process is a fermentation that occurs in the same way as in the natural world. One of the key aspects that yeast adds to bread is aroma and flavor, so we select the best strains to create wonderfully tasty bread; the kind people love to smell when they buy it or take it out of the oven.
As a Lviv-based company, how would you describe the business climate in the region?
The number of foreign investors coming in recently proves that it is a practical environment and that there are lots of opportunities here. For us as a local player, doing business has definitely become a great deal easier in recent years – the bureaucracy has become much less of an issue. Getting permits for construction or VAT rebates is nothing like the headache it used to be. I think that a critical mass has been reached; the government now understands that it is there to serve and respect business and not place obstacles in its path. We find it much easier to speak to the administration now – they understand our needs.
In Western European countries such as Germany, is the perception of Ukraine as you would like it to be?
Of course, there are some reasons why the country has had a negative press at times, but I do think that there is a continued misperception. Things tend to be seen as either black or white, and it is always easier to talk about the negative aspects. I would like Ukraine to be perceived through the full range of shades on the spectrum. The desire of people to improve the country and develop is huge. When you come and get down to the level of local companies and the work they’re doing, it’s all a lot calmer than people might imagine.
Is there a final message you would like to send to investors or potential partners?
Ukraine might have only been facing Europe for a few years, but this company has been in Europe since 2001. We have had partners, and we’ve learned from our European colleagues. We are here; we are open; we are honest; we are stable; we take care of our business and the people who work for us. Don’t be afraid of us because we are exactly like you.