Interview Ukrainian macroeconomics

Our technical expertise, longstanding experience, integrated approach and strong global support are our key advantages

Tetiana Vakaliuk, the Director of Atlas Copco Ukraine LLC, shares her working experience in the sector of compressor equipment and its service on Ukrainian market, tells about investments in research and development of new products, technologies and processes. She tells us about the peculiarities of implementation of energy-saving and environmental projects caused by imperatives of our time, modern trends and climate change.

: Tell us about Atlas Copco Ukraine, please.

Т. Vakaliuk: Our company is a part of large international Atlas Copco Group, which produces hundreds of thousands of items for B2B segment. In general, the whole business of the group, with its customer centers in more than 180 countries, can be divided into four large business areas — compressor technique, vacuum technique, industrial technique and power technique. Thus, our company, Atlas Copco Ukraine, currently represents the biggest of the four global directions — compressor technique. We are a direct representative of the manufacturer in Ukraine and offer the most modern energy efficient solutions for the treatment and production of compressed air and gases, as well as optimization, management and monitoring of compressed air systems.

So basically, 99% of industrial enterprises use compressed air for the main or auxiliary production cycle. That is why we cooperate with enterprises of absolutely all branches of industry.

The most important that we are not only selling compressors, gas generators and other equipment, we are providing our customers with complete solutions for efficient fitting and modernization of compressed air systems, as well as qualified and certified service to all our products and installations.

: And what about the service of your equipment? What advantages do you have?

T. Vakaliuk: Service of equipment is performed by our service engineers in accordance with the service plans, instructions and recommendations of a manufacturer. They use only genuine spare parts and materials. We always recommend to perform full volume service in time to assure equipment availability and cost-efficient operation. In other words, timely service maintenance means an absence of emergency repairs, unscheduled downtime, additional expenses and production losses in result.

We focus on long-term service agreements and build long-term, honest and transparent relationships with our customers. For efficient cooperation, quick information-delivery and timely service, we use a smartsystem for compressors, that allows remote monitoring of their status. It provides us and our customers with possibility to switch from emergency service to scheduled one, when we can foresee what will happen and the most important, to prevent accident situation in time. It is obvious that no one knows better the equipment rather than its manufacturer. Our technical expertise, longstanding experience, integrated approach and strong global support are probably our major advantages.

: What are the main criterion needs to be taken into account while choosing a compressor? What is important to pay attention to?

T. Vakaliuk: There can be many criteria, every customer decides individually which production task he resolves, what are the requirements caused by production specific, what is necessary and what is valuable for him. At the same time, it is important to understand that a significant amount of energy is consumed for operation of any compressed air system. That is why we recommend to evaluate not only and not so much the primary investment, but also total operating costs during the whole life cycle, because the consumed energy will be about 70% of the total cost, and the price of the equipment itself, for example, is only 15%.

One more important component is aftersales service, quality and cost of service maintenance within the warranty and after-warranty period. We always have to compare “apples to apples”, that is, bring all available alternatives to the common denominator — calculate the price of compressed air produced during a specified period, and to calculate the payback of investments.

: How big is your staff? How do you motivate employees? Does the company feel the lack of skilled personnel?

T. Vakaliuk: In total there are over 36 thousands of employees working in the Group. If we talk about Ukraine, our team for now consists of not thousands and not even hundreds of employees, but there are dozens of experts. However, we are rapidly growing and strengthening our presence on the market.

Of course, as probably in each international company, we have our own motivation system for employees. If we talk about financial aspect, there are monetary bonuses, various compensation payments, medical insurance, lunches, additional paid leaves, and in certain cases — financial aid, etc. If we consider non-financial motivation, then these are training programs, which are both local and abroad, creation of comfortable working conditions, and of course, career development not only within “Atlas Copco Ukraine”, but within the Group in general.

We believe in corporate values, which unite us. Thus, every employee in the company has respective attention, high level of trust, equal opportunities for professional growth and development, regardless of gender and age, and also clear KPIs for fair and constructive assessment of his performance. In short, we work as a responsible employer — we strive to ensure that the working environment, conditions and relationships within team contribute to the security and well-being of our employees.

Concerning the lack of personnel, I would rather say that we have difficultly to find candidates who have an adequate self-esteem, right motivation and ready to work conscientiously. As a rule, we hire potential specialists, whom we thoroughly train ourselves. We used to say in Atlas Copco: “We hire for attitude, and train for knowledge and skills.” For proper personnel training, we have developed complex educational programs, and indeed we invest a lot in people, because we are confident that they are our main asset. Our personnel is highly valued precisely because of its high qualification.

: Can you describe the core indicators of your company? What goals do you have?

T. Vakaliuk: We grow every year and we are a profitable company. However, if you mean specific financial results, Atlas Copco is a public company, the annual financial report is published and is in public access.

Concerning your second questions, I’d say that our goal, or rather our mission is a sustainable profitable growth, which we successfully achieve on the Ukrainian market. Such organic growth must be socially responsible, that is why people, the planet and profit are connected things for us. Yes, we have certain goals concerning profitability and revenue increase, organizational development, safety and well-being of our employees, also concerning corporate ethics, as well as our products and services, and environmental protection. Moreover, we have a good tradition at Atlas Copco to achieve desired goals, even very ambitious.

: What innovation do you use in your company and which are currently in the process of development?

T. Vakaliuk: Spirit of pioneering is a vital component of the Atlas Copco corporate identity and one of our core values. The company invests a lot in the research and development of new products, services, technologies and processes. For example, in 2018 the share of R&D specialists was 7.9% out of the total quantity of the Atlas Copco employees, that is more than 2 900 thousands of people.

First of all, we demonstrate innovativeness in our products and solutions. The product range is constantly renewing. Here we keep focused on energy-saving, safety and ergonomics. One of the numerous examples is Atlas Copco’s ZH 1000-3150 oil-free centrifugal air compressor, which unique design allows to maximize energy savings and minimize operating costs and can save up to 6% of consumed energy in comparison with previous models. It is about 26 500 tons of СО2 avoided on the annual basis. For better understanding it corresponds to the emissions of СО2 of more that 5 500 passenger cars driven for one year.

In general, all our projects for the new and renewed products have clear and particular goals for reducing environmental impacts, that is СО2 emissions, waste and water consumption reduction. Thus, one of the longstanding goals of the Group is that by 2 030 carbon dioxide emissions should be reduced by 50%, which is quite ambitious.

Of course, we are also actively working in the direction of digitalization, development of automated solutions with powerful network integration. Now, the prior are projects concerning the use of artificial intelligence for data processing, marketing automation, and other interesting projects, caused by modern trends.

: What projects are you implementing? What projects are you especially proud of?

T. Vakaliuk: There are a lot of projects in progress. We are engaged in modernization, re-equipment, expansion and new construction. There are more than 250 active projects for the capital equipment sale and service of different levels of complexity. We introduce an interesting project to equip fast-mounting pipelines system which does not require welding and guarantee absence of leakage and compressed air losses. We are now focally working with metallurgical sector and mining complexes.

As always, we closely cooperate with food industry and pharmaceutical enterprises, that have special requirements concerning the quality of compressed air. We pay great attention to each project because we value the trust of our partners. We are always proud when in result of cooperation, we contribute to success of our customers, and add values to their business.

It is worth to say about another project, which every employee of our company is proud of. This is a global charity project Water4All, which, by the way, this year turns the 35th anniversary from the date of its founding.

The main aim of the project is to provide an access to clean drinking water to the population that does not have such welfare at present, to improve sanitary conditions and hygiene. The project is extra ambitious – only during 2018, there were implemented 45 projects in 25 countries on 5 continents and €1.4 million were collected thanks to the project participants. It is interesting that Atlas Copco allocates an amount of funds twice bigger than the amount collected by employees as a result of voluntary donations, and ultimately, this amount of funds is tripled.

Since last year, the project has been operating in Ukraine. Up to date, €20 000 have been invested into water wells drilling in Zakarpattya. There are already installed 15 water pumps in the Romany village in Mukachevo. As a result, approximately 500 people have received access to clean water. We expect the project will continue its work in the East of Ukraine.

: Tell us about the peculiarities of doing such a business in Ukraine. Is there any specific issue which affects the sector?

T. Vakaliuk: Probably, like everyone now, we are not indifferent to the political events, because now we don’t know what will be their further development and the consequences for business. We do not know how political changes will affect the economy, investment attractiveness, external financing, and prospects for the development of the country’s industry in general. Of course, a very high level of bureaucracy in our country does not also contribute to do business.

Also, it is worth noting about imperfection of the legislation system, especially, regarding manufacturers’ responsibility for environmental standards and production quality requirments. And I am talking now not only about the reduction of harmful emissions and energy-saving. For example, in some countries, the use of oil-injected compressors in the food industry is prohibited at the legislative level because of the risk of final product oil contamination. However, in Ukraine, unfortunately, this issue is not regulated by law, and some manufacturers use oil-injected compressors without the necessary air filtration. Even those, who understand the importance of oil-free air technology and possess the proper equipment, sometimes neglect its maintenance. But this, believe me, affects significantly the quality of products which come to our table.

: What risks do the large companies face operating in Ukraine? How do you minimize them?

T. Vakaliuk: We see a lot of risks – financial, tax as well as the risk of instability of the market itself, political turbulence, corruption risks, and even risks connected with health and safety. In the end, the human factor as a risk is also essential. However, we understand that the Ukrainian market is attractive and creates a lot of opportunities. That is why we make efforts to adapt our work properly and at the same time remain attractive, operational and flexible. We carefully monitor changes in the rules and regulations relevant for us, economic forecasts and other information. We have strong legal support. Besides that, we also attract both external and internal auditors, tax advisers, etc., so that despite all the difficulties, we could build the company’s work save and in the way of easy cooperation.

: How has the market and customer behavior changed?

T. Vakaliuk: We see a different approach to the choice of equipment and decision making, than, for example, 5 years ago. It caused by the rising costs of energy sources, so customers now cannot ignore the question of energy-saving. That is why more companies began to evaluate their benefits based on this factor, think for a long-term perspective and buy energy efficient equipment which eventually will be cheaper in terms of the compressed air or gas unit production cost.

: What plans does the company have for the nearest years?

Т. Vakaliuk: We will be increasing the presence on the market, continue to invest in the development of competencies to remain the best industrial partner for our customers, to be “First in mind, first in choice” – this is our vision. So, our team has a lot of work ahead.

Please read: Doing business in Ukraine during the period of political instability: what to focus on

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