Interview with Greenstate Resident – Atria Meat Processing Plant
Atria Meat Processing Plant is one of the first and largest residents of the Greenstate Industrial Park in Gorelovo, which is developed by YIT. Why did the manufacturer choose that particular site, what difficulties did it encounter during construction, and how important is the role of the management company for normal operation of the plant? – we asked Andrey Shkredov, Atria-Russia Finance, IT and Purchasing Director to answer those questions.
- Andrey Sergeyevich, tell us briefly about the history of your company and how you became a resident of Greenstate, please.
- Atria is a large international holding company operating in many countries of Europe. Atria Group entered the Russian market in 2005, when a partnership agreement was signed with Pit-Product. At that time, Pit-Product was owned by a private Russian investor. In 2006, Atria bought a 100% stake in Pit-Product and became the sole owner and proprietor of the company. From that moment, the Atria-Russia business unit was created. At that time, we had one plant in the village of Sinyavino, Leningrad Region. The meat processing market grew rapidly, and Atria decided to further develop its business in Russia. We started looking for a plot to construct a new plant. After a thorough analysis of the market, we chose a site in the Greenstate Industrial Park. Construction began in 2007, and in 2008 Atria acquired the KampoMos meat processing plant in Moscow and a farm in the Moscow region. Slowly, everything was developing, rising and growing. In 2010, we launched the Greenstate factory. We started manufacturing our products, and a logistics center was built along with the plant, so that all the logistics followed to get carried out from the plant in Gorelovo. At that time, it was the most advanced meat processing plant in Russia in technical and technological terms.
- Which factors allowed you to invest in construction? What is the business idea of the new enterprise?
- When the decision was taken to build the plant, the market was developing rapidly, sales kept growing, and the existing facilities of the old enterprise were not enough. Large production capacities were needed, as well as new production equipment, which would make it possible to produce larger volumes and a wider range of products, including some novelties for the market. We wanted to build a modern plant with impeccably proper hygiene and sanitary conditions. The belief that the market would grow and develop has been the main engine of progress.
- What is the area by your enterprise?
- Production shops themselves span approximately 22,000 square meters.
- Why did you choose Greenstate IE in particular? How did the site selection go: how long was the decision to take, which competing sites were considered, what was important for choosing this particular location?
- It was a classic business case. The most important thing for us was to find the best location in terms of logistics. The site in Gorelovo turned out to be the most suitable in that regard, since it is located near the city and its Ring Road. The transport component in St. Petersburg plays an important role.
The second is the size of land plot: a certain size was needed, not more and not less.
Thirdly, availability of infrastructure on site, since getting the necessary amount of electricity, access to water, sanitation and gas is always a big headache in Russia.
It was very important to have a reliable business partner who owns the land, maintains infrastructure throughout the territory, and is to proceed with these services in the future.
By combination of the above factors, Greenstate IE and YIT, as the owner of the land and the managing company of the Park were ahead of their competitors by many points. Therefore, it was decided to choose a site in this zone and start construction works together with YIT. I emphasize once again that the question of trust in a business partner, confidence in it, is extremely important in Russia.
- That is, it turns out that such a factor as trust in a business partner is as important for you as location and availability of utilities?
- Of course. We know a lot of examples when, having sold a site to construct a plant, a logistics center or a cottage village, the owner of such land plot fails to service that territory subsequently. And then new owners may have big problems with operating the networks and working on that site then. Therefore, the reliability of one’s partner is extremely important.
For us, the cost of land was also significant, price offers by YIT at the time of the purchase were quite competitive.
- You have bought a plot, YIT has built a plant after your order, the enterprise is working successfully. Why do you need a business partner represented by YIT further on?
- Initially, YIT declared that the Greenstate industrial zone is not just an Atria factory, but a combination of many residents, like a cottage village with many houses. The industrial zone has a huge amount of common property: roads, engineering networks, parking lots, etc. Someone should take care of their normal functioning. In an apartment building there is a managing company that maintains communications and elevators, cleans the building and makes sure that nothing is crumbling. And here it is very important that those who maintain order around you do this properly, efficiently, promptly and at reasonable prices. If that is not the case, one would have hard time driving up to or leaving the plant.
By the way, we analyzed several service quality cases for industrial zones in both St. Petersburg and Moscow, after their construction was over. It turned out that the situation for resident enterprises was simply nightmarish in many cases. YIT did not just say: “Buy a plot, we'll build something for you there and that’ll be it”, but proposed a long-term relations concept from the very start. It was specified how this industrial zone would develop, how it would be serviced, according to what regulations, for many years to come. For a European business, especially for Atria, which has Finnish roots, it is very important to see and understand the prospect of its functioning not for just a year or two, but for decades.
- 10 years have passed, are you satisfied with the service by YIT?
- In general, yes, there are nuances, but everything is quickly resolved in stride, in working order. One gets used to the good things quickly, and one always wants something better still.
- How was the construction process going? What caused the greatest difficulties and could they be avoided?
- The construction itself took place without significant deviations from the goals originally set, both time- and cost-wise. The greatest difficulty was encountered connecting to water supply and sanitation networks. Initially, a certain organization was to become a water supplier, but in fact that did not come about. YIT began to look for other solutions, and found a way out. It was a difficult moment, which affected the timing of commissioning the plant. The issue of water supply was the most serious and most problematic; otherwise everything went smoothly enough.
- What can be improved in the work of YIT at all stages: from site selection to operation of the constructed enterprise? What might by your recommendations as an experienced specialist who has gone through all stages together with a business partner.
- This is a very difficult question. One may recommend to keep up the current level of service, because together we have learned to do many things well, quickly and efficiently, over so many years. We went through the learning curve together, both us and YIT. My traditional wish is to monitor the costs of maintaining infrastructure closer. That is what we are paying our utility bills for, and we would like there to be no temptation to shift these costs on to our shoulders. In a nutshell – to help spend money efficiently.
- Is YIT open to dialogue on these issues?
- It certainly is. But, as I already noted, having gained something good, you always crave for something even better. Partners should keep each other in good shape.
- Do you communicate with neighbor residents? Are there any difficulties or, on the contrary, can there be a synergy effect from a close neighborhood?
-At the moment, we are the only food company in this area. The others do different things: Siemens produces gas turbines, we – sausages and salami, we have no overlapping business interests.
- Is the existing infrastructure in Greenstate here enough for you or would you like something else? Maybe you need cafes, recreation areas?
- Our production has its own specifics related to sanitary requirements for food industry enterprises: employees entering the factory usually do not go beyond it until the end of the shift. Therefore, we have our own dining room, and our own recreation areas inside the enterprise.
- How do you assess the situation in the economy at large? Are you planning to expand within Greenstate or elsewhere? Or do you command enough capacity to meet the needs of the market?
- I am somewhat constrained by confidentiality obligations on the issues of developing our company. But there is still potential in Gorelovo. In 2010, we launched a factory, and in 2015 we completed and opened a large pizza workshop. Theoretically speaking, one can build another plant of such size on this site. We have no restrictions on the size of the plot with respect to its sanitary zone. If there is a need, we are ready to expand.