WHAT DRIVES DIGITAL TRANSFORMATION OF AGRICULTURE: THE CASE OF UKRAINE

19 May 2020

Digital technologies are actively transforming today’s agriculture. One globally striking example where digital technologies are being increasingly introduced is the agricultural sector of Ukraine. In this Eastern European country, 4.5 million hectares of the total of 32 million hectares of arable land countrywide are being supervised by unmanned aerial vehicles (drones) already today. Satellite monitoring of fields, precision farming tools, navigation systems, and digital sensor technologies are being increasingly used by large Ukrainian agroholdings. In addition, agroholdings deploy various IT solutions to integrate the obtained data into enterprise management systems and enable data analysis with modern analytical tools.

Interestingly, a substantial portion of these modern tools has been developed by local technology providers or in-house IT specialists of agroholdings. What drives this rapid digitalization process in Ukraine? In order to answer this question, Largescaleagriculture.com in cooperation with AgroPortal interviewed the managers of four large Ukrainian agricultural companies: MHP, Kernel, IMC, and Astarta-Kyiv.


FOR WHAT PURPOSES DOES YOUR COMPANY IMPLEMENT NEW DIGITAL TECHNOLOGIES?


Andriy Bratanich, Chief Information Officer, MHP: 

The value of implementing digital technologies at MHP is associated with a number of factors. First, they help to reduce the impact of human factor and minimize the possibility of errors in business operations. Second, digital technologies make it possible to increase the accuracy of input data. Third, they help to improve evaluation of the effectiveness of our decisions based on factor analysis. Last but not least, we use digital technologies to create and improve various mathematical models for management of our business processes.

Andriy Pishyi, Head of IT, Kernel:

The most important goals behind implementation of IT technologies at Kernel include ensuring business consistency and efficiency, asset development, sales growth, improvement of service quality, and attraction of new clients.

Bohdan Kryvitskyi, Chief Innovation Officer, IMC:

Digital technologies are deeply integrated into our everyday routine at IMC. For instance, our tractors are equipped with digital terminals, which aim to facilitate and control performance indicators of tractor drivers. At the same time, our top managers can easily analyze the company’s key metrics on a tablet in the office. Drivers behind using such tools might be quite specific but the overarching aim is always the same – efficiency improvement.

Nataliia Bogacheva, Head of AgriChain Project, Astarta-Kyiv:

At Astarta, we aim to operate both production and management processes, such as managing farmland rental contracts, performing field activities, maintaining machinery park and inventories, as well as working with personnel as efficiently as possible. Digital technologies help us to plan, monitor and analyze all the operations along our production chain promptly and professionally, timely responding to risks.


WHICH OF THE TECHNOLOGIES THAT YOUR COMPANY HAS IMPLEMENTED LATELY, TURNED OUT TO BE THE MOST EFFECTIVE?


Andriy Bratanich, Chief Information Officer, MHP: 

All agricultural subsidiaries of MHP use the platform called DigitalAgroTech MHP for managing the production processes. This tool is designed to plan field activities, automatically store data collected by precision equipment, prepare accounting documentation based on the data entered into the program by our agronomists, as well as on the data from GPS monitoring and fuel control system. The platform also has an option of accumulating the field maps, which enables us to select the most effective field technology for each field based on the previous experience. 

Another example of effective technology is a digital solution for optimizing grain logistics, developed internally at MHP. We use this tool for forecasting the company’s storage needs, utilizing surplus inventories, and grain trading. In addition, big data automation allows us to forecast and model the indicators of poultry breeding, accumulate the meteorological data to regulate our production technology, and analyze and prevent risks.

Meanwhile, during COVID-19 outbreak, our office employees can easily work from home using the digital workspace with access to all necessary documentation and IT services. This solution proved its effectiveness and has been used at MHP for a long time.

Andriy Pishyi, Head of IT, Kernel:

We implement a new promising project based on imitation modeling and artificial intelligence, which aims to improve our logistics. The solution will help us to optimize our delivery processes and control commodity stocks at the port. Additionally, it will give us the possibility to balance between road and railway transport, forecast and prevent complicated situations.

Another solution worth mentioning is complex automatization of all purchase processes using Microsoft Navision platform. This technology enables my colleagues from the procurement department to register and sign agreements on a short notice, which is important during the harvesting campaign. Eventually, production processes at our factories, port terminals, and elevators are entirely digitized. This way, we speed up the receipt of grain at the elevators or regulate traffic load on-site by means of electronic queue. All digital solutions used at Kernel are interconnected and synchronized. 

Bohdan Kryvitskyi, Chief Innovation Officer, IMC:

All innovations currently implemented in the agribusiness refer to either software or technical solutions. The latter ones give economic effect, which is easier to measure. This way, of the technologies which we have lately implemented at IMC, the biggest benefits where brought by technologies for precision farming, e.g. self-driving machines, seeding controllers, tools for quality control of field operations etc.
Nataliia Bogacheva, Head of AgriChain Project, Astarta-Kyiv:

In order to efficiently implement IT-solutions, Astarta has launched the AgriChain platform. AgriChain accumulates technologies aimed at optimization of our production processes, storage, purchases and deliveries, machinery park, logistics etc. For instance, AgriChain Land enables us to maintain the entire farmland area of Astarta. With this option, we managed to regulate tillage intensity and save 7$ per hectare. With AgriChain Farm, we can control our production processes and synchronize online our agronomic, mechanic, dispatcher, storage, and accounting departments, which resulted in the benefit of $8.1 per hectare during the first year of implementation at our pilot subsidiary.


IS BUSINESS ENVIRONMENT IN UKRAINE CONDUCIVE FOR DIGITAL TRANSFORMATION?


Andriy Bratanich, Chief Information Officer, MHP: 

The period, when economic conditions remain unstable and the competition among the market players is fierce, is favorable for implementing new ideas and trying new ways of doing business. Today, digital transformation is rather a must than an option. To my mind, Ukraine is far ahead countries such as the U.S. in terms of automation of routine tasks and business optimization in agriculture. Our country offers a friendly environment for implementing innovative solutions.

Andriy Pishyi, Head of IT, Kernel:

Going digital is absolutely possible for agribusinesses in Ukraine. Kernel proves this by constantly tracking, testing, and implementing new technologies. Digital transformation makes it possible for us to operate the largest farmland area and transship the biggest volumes of commodities countrywide, as well as to raise our exports annually.

Bohdan Kryvitskyi, Chief Innovation Officer, IMC:

Success of digital transformation depends on the profiles of the business itself and strategic orientation of the company’s management. There are plenty of success stories in Ukrainian agricultural sector, which show us the benefits that technologies can bring about. At the same time, failures also take place due to factors such as employee conservatism and resistance to implementation of technologies alongside poor regional infrastructure.

By Anna Feshchenko, in cooperation with AgroPortal

Note:

Kernel is Ukraine's largest producer and exporter of sunflower oil, operates 530,000 hectares of farmland.

MHP is Ukraine's largest poultry producer, operates 370,000 hectares of farmland, and controls over 50% of Ukrainian poultry market.

Astarta-Kyiv specializes in sugar, crop, and dairy production, operates 240,000 hectares of farmland.

IMC produces crops and raw milk, operates 124,000 hectares of farmland. 

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