Ihor Khodak: “Ukraine's Perspective is in  Medium-Sized Businesses” 


Vivad 09 Ltd., located in the village of Romaniv in Zhytomyr region, and the whole surrounding area as well, impress with the unusual for district centers respectability, clear architecture and cleanliness. The third largest oak processing company in Ukraine has appeared in this province.

Relying on his own strengths

Its birth and begin time were in 2005. It was then that 35-year-old Ihor Khodak returned to his native village of Vrublivka in Romaniv region and created his own enterprise. It started with five employees.

They were engaged in processing of oak-logs into boards. The market needed such a product at that time. Every year the production was expanding, the company increased. Even then, Ihor Khodak determined the strategy – to develop “Vivad” in the direction of making finished products. “This is precisely the locomotive that moves forward the world’s economies,” the entrepreneur from Romaniv said. After 7 years, the first finished products were industrial and mosaic parquet. Since then, they have been exported for over seven years – now up to 18 countries in Europe, and gross sales revenue is more than 350 million.

Later the company launched a parquet board production. According to the technology, it is still called modular parquet abroad. And in 2016, “Vivad” launched a line for the production of lamella – an element from which a three-layer parquet board is made. Without attracting a foreign investor, relying solely on own resources, which is a principled position of Ihor Khodak, over the past three years the company has invested in its development 4 million euros. In terms of global dimensions, this is of course a small figure, but in Romaniv region, where the population is less than 30 thousand, it is quite tangible. “We put into development all profits to a penny. Our bank is a native enterprise “, Ihor emphasizes. According to him, the next step was the introduction of technology for the processing of all wastes and the manufacture of certain products, in particular, fuel briquettes. Today, 60 tons of waste are recycled daily, and the products made are exported. This made it possible to increase the profitability of production by almost 15%, thus obtaining additional funds. Revenues increased after the company established an optimization and gluing of laminated products line. Investments and creation of own drying complex and production facilities for board stabilization became important activities. Later the production facilitites for acclimatization of wood were built, a large number of drying chambers were installed, a line for sawing board to lamella used in the manufacture of three-layer floor wear was extended. Lamella is the face of a parquet board, its top layer and bears the greatest technical load.

Actually, wood processing in the company “Vivad” is 99.9% adjusted to the production of products related to the floor wear. The world market dictates that – the demand for such products is constantly rising. For almost ten years already, Europe has been pursuing a course on environmentally friendly products used in construction, in particular of residential and office buildings. There is no such thing as a plastic product there. All the most advanced world manufacturers automate manufacturing lamella today. “Vivad” is also going this way, gradually reducing the use of manual labor. Although, as it is believed here, it is impossible to get rid of it completely. “Despite substantial modernization and the use of automated and robotic equipment, human resources are always needed for such production. Therefore, there will always be vacancies and jobs at the enterprise, and accordingly, locals will earn a decent salary. And this is also important, “observes Ihor Khodak. “As for the model of further development of “Vivad”, it will be provided by our investment in the amount of 5 million euros”, said Ihor Khodak. When asked if they have information where the products of the Romaniv enterprise are used, its CEO responds with affirmative. As an example, he mentions the halls of one of the French airports.

A man of purpose and action

Ihor Hodak tells restrained about himself. School in native Vrublivka, army service. Then – Mykolaiv nautical school, after which he went to sea on ships of foreign navigation, registered in Odessa. Even then, he realized that he should play a lone hand. Later he began working on Odesa market of building materials, engaged in supply and sale of timber products. He studied the business environment well, was interested in and mastered wood processing, its technology and technical part. Some time later he decided to return to Zhytomyr region with a clear goal – to set up a wood processing enterprise in his native region. And he did it.

Few people believed that it would not only survive, but also would grow into a powerful company, would become one of the main budget generators in the region, and the number of employees would grow up to 750 people. But thanks to Ihor Khodak’s perseverance, his highly professional approach to business it happened that way.

“I was moving step by step, counting only on my own earnings, constantly investing in development. And thanks to such a policy, “Vivad” exists”, he says. And he continues: “The company in this form and with so many employees is a unique one in the region. We did not hire any specialists from outside – we prepared everyone ourselves. These are people from our and neighboring regions. They were learning and I was learning with them. Due to this I know the entire technological process from “A” to “Z”. I managed to see something abroad, I learned something on my own. And thus a modern enterprise was created. I have clear plans for its further development. Our goal is to create a product – a three-layer flooring board. That is, the final product, which is in high demand on the world market today. The path to this is more automation of initial processes, increasing salaries of employees. And not only we will benefit from the increased additional value, but the budget of the region and the country as well.”

– Does the professional potential of “Vivad” correspond to such ambitions? – we ask the general director.

– I think that staff is a problem of today’s Ukraine, – he says. A lot of vocational school, technical schools were eliminated. Universities do not actually prepare specialists for the woodworking industry. Therefore, it is difficult and complicated to train a professional worker.

Especially out of an agrarian – there are villages around where there is no work at all. In my company, I know each employee personally, I visit workshop stations as often as possible. And if I see that someone puts his heart into work and seeks professional growth, I fully support him, I help him.

We have created good conditions for work and leisure in the company. My employees go to work and from work free of charge within a radius of 50 km by company’s buses.

It’s time to think and to take care of economy

There are 22 subdivisions in the production, and the pinnacle is three processing facilitites and the factory itself. As he goes, the CEO tells about their work, the peculiarities of technological processes. He does not avoid speaking about the problems, especially strategic ones, which, in his opinion, “retard not only the development of the company “Vivad “, but also the national wood processing industry in general” – the lack of raw materials. The enterprise deals mainly with one tree species – oak. For 12 years its value in Ukraine has increased almost by six times. Today it is the highest value in Europe. Despite the sufficient supply of oak raw materials in the country, wood processing companies are sharply experiencing its shortage on the market. According to Ihor Khodak, “First of all large, leading enterprises with the biggest burden – high taxes, maintenance of social sphere, image in Europe – were the losers. At the same time, you still need to develop, and therefore to invest.” However, the company buys and processes only 20 – 24 thousand cubic meters annually instead of 36 thousand cubic meters of round oak timber. According to the entrepreneur, “one of the reasons is that large companies, with hundreds of employees, tax liabilities to the state, acting legally and transparently, can not afford what other smaller enterprises are doing under the current circumstances. In particular, they cannot stop their production at any time or reduce it. This is a step back, which will inevitably lead to a productive, economic and social decline, as well as to the loss of the company’s image on the foreign market. Because Europe will not wait until you solve your problems, created artificially, because of bureaucratic delays and the lack of a state strategy.”

What is the way out? Ihor Khodak, as well as his colleagues – heads of other large wood processing enterprises, sees the way out “in the abolition of the morally obsolete Order Nr. 42 of the State Forestry Committee of Ukraine, which regulates the wood trade.”

The essence of such regulation, he says, is in the sale of raw wood by state forestry companies at quarterly auction tenders. In fact, national wood processing companies are forced to tempt fate in the quarterly “lottery”, which does not provide any guarantee of success and stability in work. Such an approach, perhaps, is acceptable for small businesses, but not for large ones, by no means. Because, how you can plan somethimg, and even more, how you can make certain commitments to foreign partners, being not certain about the availability of wood and its quality. According to Ihor Khodak, this in turn “retards the development of the entire wood industry of the state, not to mention the impossibility of developing and adopting its program.” According to the head of Romaniv enterprise, another problem is that a significant amount of oak raw materials are processed by state forestries themselves. In fact, high-value raw materials are processed at a low technological level.

In addition, there is also a shadow market – it also occupies a certain part of the raw material resource. If this volume is put on the all-Ukrainian market, it will be enough for all participants. High hopes for improving the situation are put on the Ministry of Agrarian Policy, which includes the Agency of Forest Resources of Ukraine. There was a meeting recently initiated by large wood processing enterprises. It raised the question of canceling Order Nr. 42 or replacing it with an alternative one. One of the acceptable steps is to allow wood processing companies to work with forestry companies through direct agreements. “In order to be sure, we must have a direct annual contract with a calculation in order to provide 70% of the needs of large enterprises in raw materials at a stable price, adjusting it only to the percentage of inflation,” Ihor said.

In fact, this is the experience of our successful European neighbors, in particular, Poland, which in a short period of time created one of the most powerful economies in Europe. According to him, “Argument is simple: for the development of any production program, for the solving of the issue of its financing, technical support, including ordering, manufacturing, supply and installation of equipment, requires one and a half years minimum. Is it possible with quarterly auctions?”

“In fact, we are facing a big abyss,” Ihor Khodak said. If we jump over – we will go ahead, if not – we will stop, he emphasizes. And this is more than serious. Because, whatever our politicians say, the prospect of Ukraine is in medium-sized businesses. If there were at least 4 – 5 enterprises like ours in Romaniv region, the possibilities of the region and the oblast would be much better. The budget would be bigger, the social sphere would be more powerful, people would be more protected.

Unfortunately, many of those who have power in the country are only thinking about politics – nobody really cares about the economy, including the development of medium-sized and small businesses. I’m sure: it is on them that we must rely while developing and implementing the development strategy of the state.”

We started the business and developed it by ourselves, getting heavily on feet and we know the price of this work pretty well. Therefore, we value it and those who work with us with the realization that it is necessary for all of us, for the state and society”.

Romaniv – Kyiv.


According to: «Holos Ukrainy» 

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