History of some global companies is more like an exciting adventure than the pallid economical statistics. Books on such companies are in great demand as detective stories. Chumak stands a good chance for being entered into business and history textbooks as an example of bright and innovative decisions leading the Company to accomplishments and success.
When founders of the Chumak Company, young Swedish businessmen Johan Boden and Carl Sturen, came to Ukraine for the first time in 1993, they were 21 and 19 years old only. Both were engaged into the family vegetable production business in Sweden. It happened that a cucumber crop was lost in Estonia that year; so they had to look for replacement for the lost supplies in other states. After coming to Ukraine, they saw that the state offered much than a mere replenishment for the lost crops. They have found the new platform for establishment of their own company.
Johan and Carl returned in Ukraine in order to find a suitable site for the future production facilities. They traveled throughout the state and visited 32 factories before finally choosing the Kakhovka plant in Kherson region. In 1995, Johan and Carl realized the necessity of building their own production facilities. When looking for investors, they got support and understanding from Professor Hans Rausing — the founder of the Tetra Pak Company, the leading producer of food packaging.
Their first meeting yielded in the fruitful partnership, especially because Professor Rausing had sympathy towards Russia and Ukraine: he used to study the Russian language and launched his first business in the former USSR. Initially, Kahovka had fields with overripe cucumbers and the depreciated tinned food factory only. Young businessmen had to build the company and production facilities “from the scratch” — and they managed to do it. The original name of the Company was South Food, Inc. — it was the joint venture of the Swedish partners and the State Property Fund (SPF) of Ukraine.
Establishment of Chumak
Gradually they came to the idea of calling the Company “Chumak”. This name is deeply rooted in the Ukrainian history and closely tied with the operational region of the Company. “Chumaks’ were traveling merchants. In the 17th century, they were engaged in trading salt and other goods, traveling from Ukraine’s southern Black Sea coast into Russia and Western Europe, exchanging salt for money and goods. Being well-known for their peaceful attitude and long voyages, Chumaks had given the new name for the Milky Way — in Ukraine, it is called “the Chumak’s Way”. In night, it looks like the long road powdered with salt. Chumaks formed convoys of ox carts, so an emblem of a cart-wheel became the symbol of the Chumak brand. Chumak celebrates its birthday on May 29 — a day when the Company was established in 1996. ***Thus, historical symbols and traditions were reflected in the present. Chumak celebrates the Company’s birthday on May 29 — a day when the Ukrainian Closed Joint-Stock Company Chumak was launched with $4.1 million in start-up capital. Further events are the history of continuous perfection and rapid development.
For the first time, Chumak Company introduced ketchup to the Ukrainian customers. Before, regulations of the State Department of Food Quality and the Register of Foodstuff didn’t recognize ketchup as a type of food – the closest known product was tomato sauce. Chumak Company successfully advocated for official adoption of the "ketchup" term and launched the first ketchup-producing facility in Ukraine. Soon after the ketchup was launched, Chumak became the general sponsor of the Tavria Games, at that time the country’s largest popular music festival. In a way, it was a bow of respect to the southern region, in the ancient times known as Tavria.
The Chumak’s distribution network covered all of Ukraine. The Company purchased its second production facility, an outmoded canning factory in Skadovsk, Kherson region. After a thorough renovation, Chumak was able to process ripe Kherson tomatoes within hours after harvesting. Also, the Company launched the first mayonnaise of the European quality in Ukraine. Original Mayonnaise, or simply "Spravzhniy Mayonnaise" in Ukrainian, became a real success in the consumer market. This year marked the start of servicing McDonalds as Chumak became their first supplier ever in the CIS. Starting with cucumbers, ketchup and mayonnaise followed as regular products supplied to McDonalds.
Chumak purchased two more production facilities in Kakhovka – this time for sunflower oil production. One of them, an abandoned concrete panel plant was converted into an oil extraction and bottling plant in no more than six months. It was the first sunflower oil production facility in the region operating on such level.
Chumak introduced new environmentally safe packaging — EcoLean, a state-of-the-art packaging material that binds natural carbonates with plastics. The first bottle of Chumak sunflower oil was released and Chumak quickly took the second position in the big Ukrainian market for bottled sunflower oil.Chumak significantly improved the vegetable growing technologies introducing drip irrigation to the Kherson region. The relevant system was deployed in Ukraine for the first time. They brought plastic drip irrigation pipes from Sweden to serve 20 hectares of land. The pipe was installed on land the Company rented from a local collective farm, and the results were impressive. On an experimental tomato field, local farmers together yielded 80 tons of tomatoes per hectare. This was twice the record set in the former Soviet Union, and about five times the average yield before irrigation! In the end of the year, Chumak was named one of Ukraine's most recognized brands in the Kievskie Vedomosti newspaper’s poll. By then, the Company produced over 80 products in various categories mirroring tastes and habits of the Ukrainian customer.
The New Millennium
This year, on the edge of two centuries, the Company grew by 78% as a result of successful sales-work and reasonable product positioning. Chumak also boasted the Europe’s largest cucumber field. That same year, the company’s two sunflower oil production enterprises were merged into one firm: Chumak Oil. Chumak also started co-packing cooperation with leading Argentinean Food Company "Molinos de la Plata", producing sunflower oil under the brand Molinos.
The Company launched Ukraine’s largest fresh tomato processing plant when a refurbished plant opened at the site of an old canning factory in Skadovsk. This was also the only plant in Ukraine to handle the complete production cycle - from fresh tomatoes to finished product. This made Chumak the only producer in Ukraine to make tomato juice beginning with ripe tomatoes, rather than from tomato concentrate. Chumak also launched its second brand – Darina – a brand hosting good value-for-money products for an affordable price. With Darina, Chumak entered the soft doypacks market – a popular format in Ukraine. Chumak’s innovation didn’t go unnoticed.The high quality level of Chumak production was once again confirmed when the Company won the contract for producing Calve ketchup for Unilever.
Chumak ketchup won the semi-annual Choice of the Year competition — twice. That same year, the Government awarded Chumak with the medal "For Ukraine’s Revival" of the 1st grade for the firm’s "significant contribution into Ukraine’s economy". Chumak also added some prominent partners during this period. Cooperation with Orkla Foods marked the new stage of in Chumak’s product development efforts and added significant knowledge within the fields of sales and marketing.
Chumak introduced new tomato paste in a new convenient package Tetra Classic. The "Tomato Pyramid" quickly became a favorite with the Ukrainian customers as it was optimal for one-time dosage of tomato paste for many of the popular Ukrainian dishes. Later on, Chumak launched the premium class canned vegetable line, which included Adjika, Sweet Pepper and Cherry Tomatoes.In December, Chumak launched ketchup in doypacks, which quickly gained popularity among Ukrainians because of high quality and excellent taste.An office was established in Kiev where the Sales Management and Chumak Marketing Team since reside.
Sales grew considerably as Chumak brand reached wider audience through distribution growth and new product launches.Chumak launched its Original and Provance mayonnaises in the 200g soft packs, which was good competitive step. The mayonnaises line was extended with two new varieties: Original Light and Delicate. Later Chumak Original Light and Delicate mayonnaises where introduced in 1 kg and 2 kg pails, which made them more suitable for catering service.Kuharsky Sauces line was renovated in May, 2004. Four different tastes were offered to consumers: Classic, Vegetable, with Spices, with Herbs and made a real success on the Ukrainian market.
In 2005 Chumak brand captured major market shares in all its main categories. Major news included new varieties of ketchup and mayonnaise as well as targeted offers for the catering market.Chumak took part in developing the condimenting culture by launching two new lines of products: Chumak Condiment Sauces and Salad Dressings "Salad+".
The year started with the new advertising campaign of Chumak launching, which focused on the fact that Chumak Ketchup is the only Ukrainian ketchup without preservatives and colorings available in a soft packaging.
Chumak Company put into operation the largest tomato processing plant in the Central and Eastern Europe in Kakhovka town, Kherson region. In view of the new facility launch and striving for perfection of tomato processing efficiency and quality improvement, Chumak decided to terminate tomato-processing operations at Skadovsk canning factory. Chumak processes tomatoes using technologies and equipment of the leading European manufacturers, which ensure high processing efficiency of excellent quality of products. 2008In 2008, capacities of the tomato processing plant doubled and reached 2,500,000 kg of tomatoes per annum. In addition, Chumak introduced the new technology for production of preserving agents-free mayonnaise. In March 2008, the Investment Company Dragon Capital and East Capital Bering Ukraine Fund jointly bought 70% stock of Chumak from one of the Company’s co-founders — Professor Hans Rausing. Later this year, the Company completed construction of the new office in Kakhovka town.
Chumak is building the macaroni plant in Kakhovka. The tentative commissioning date falls on December 2009.
The Present Day
2010 – We launched new macaroni plant. The plant produces the best-selling types of macaroni in Ukraine: "Trubochki”, “Periia”, “Spiralki”, “Cherepashki”, “Vermishel”, “Rozhki”. Macaroni products were introduced to the Chumak brand range in 2006, however until 2010 this product category was manufactured only in Russia. Construction of new plant was commenced in 2009 and completed in 2010. The project investments were USD 3 mln.
In addition, we launched spaghetti sauces – the product that is absolutely new for Ukrainian market. We are producing four types of sauces – “Arabiata”, “Boscaiola”, “Napolitana” and “Italian Bolognese”. Packaging of all sauces has information on sauce composition and the best way of serving.
We launched new type of mayonnaise – “Provansal”. “Provansal” is a classic mayonnaise with spicy touch and 67 percent fat made using traditional receipts of the best Provencal cooks. New types of ketchup “S paprikoi” and “S chesnokom” were also launched. Besides, the customers were offered two popular tomato sauces “Ostryi” and “Tomatnyi”.