Ukraine agriculturally rich, but technologically destitute.
As Nicoll explained, "Atmospheric oxygen is a prime contributor to the spoilage of packaged food products and stored fruits and vegetables. Nitrogen is used to displace oxygen inside food packages and storage facilities to control the atmospheres around food products and extend the saleable shelf life of perishable products.
"In third world locations, where traditional supplies of nitrogen are not available, non-cryogenic nitrogen-generating technology can provide a source of on-site gaseous nitrogen. Generon Systems technology eliminates the need for liquid nitrogen deliveries, or delivery and refilling of high-pressure cylinders. A source of compressed air is all that is needed. In places like the Ukraine, where the infrastructure is poorly developed, on-site systems are ideal. Our management believed this mission was worthwhile based on the general need in the CIS (Commonwealth of Independent States) for non-chemical, non-cryogenic nitrogen preservation techniques in the food industry. This technology affords the opportunity to address the food availability issue in the Ukraine."
Nicoll went on to report some of the mission's findings. "The Ukraine has a land mass about the size of France. There are 52 million people living there. The Ukraine is famous as one of the world's largest, most productive food-producing regions. Unfortunately, much of the food produced is lost due to the general lack of modern food processing, packaging, and transportation equipment.
"There are few luxuries found in any part of the Ukraine. A year after the end of Soviet rule, the challenges left to the people of the individual CIS states are becoming better known, as more Westerners gain entry to once isolated regions and people. The excesses of the old Soviet system drained the resources of the Ukraine and left the people with the desire to join the world's market economy--but with little knowledge of how free market systems operate.
"Part of the routine for companies seeking to do business in the CIS will be teaching their new business partners the most rudimentary lessons about competition, pricing, sales, and marketing. They have no knowledge about these things because for 70 years there was no need to know about capitalism. In fact, they were taught that the profit motive was evil and the enemy of the people. In order for foreign companies to succeed in undertaking business dealings in the CIS, they must have an understanding of this history, and they must practice patience."
Equally important, underscores Nicoll, is an awareness on the part of business people traveling to the Ukraine that their journey will cover not only thousands of miles, but decades of time. Noted Nicoll, "A large percentage of Ukrainians lead an agrarian life with living conditions and technology similar to what could be found in the U.S. in the 1930s and 1940s. Telephones work only intermittently. Roads are uneven and in need of repair. Animals commonly are used for farm labor and transportation. Hot water exists in only 50% of the homes (and fewer hotels). Out buildings are common, since indoor plumbing is not the norm. Water is obtained by bucket from shallow ground wells.
"All farming in the Ukraine is done on collective farms, owned by the state. Average farm size is 30,000 acres with several hundred workers employed. These self-contained farms produce a variety of grains, vegetables, fruits, meat and poultry. A general lack of weed and insect control in the field adversely affects crop output. Canning, preservation, storage, and transportation of food products are coordinated at or from the individual farms. Refrigerated storage and transportation are in short supply.
"Canning practice is reminiscent of what our grandparents did, but on a larger scale. All washing, placing of vegetables or fruit in containers, loading, etc. is done by hand. There is no grading procedure. Containers used for canning are gallon-sized glass jars, filled with brine, garnished with dill weed, and sealed with metal screw caps. Wooden shipping crates are nailed together by hand. There are no corrugated boxes. Processing and packaging conditions are not sanitary. The overwhelming bulk of production is for domestic consumption, though it is very unlikely that preserved goods in the Ukraine could meet any international standard for export.
"Workers on the collective farms are allotted a small piece of land to grow their own crops for private use. They also can raise chickens for their own use. During the Winter of 1991, people were forced to subsist on what they had grown and canned during the Summer. Food gleaners followed harvest machines and gathered food left behind on the ground. This allowed Ukrainians to survive the Winter of 1991. The use of controlled atmosphere, nitrogen-flushed packaging, storage and distribution techniques could go a long way toward alleviating the shortages of food during off-season times."
Nicoli concluded his exclusive report to FOOD PROCESSING with this observation: "There is no doubt that the Ukraine represents a significant long-term business opportunity for western companies involved in the food and agricultural area. However, for the full benefits of a market economy to begin in the Ukraine, several events must occur--conversion of state-owned businesses to private ownership, land reform, guidance for fledgling businesses, and education about western business practices and the once 'evil' profit motive."
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|Date:||Dec 1, 1992|
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