"We Don't Play Short-Term. We Are Interested in Decades-Long Perspective"

Daria Isakova

The Gals Agro Group of Companies is an example of how, even during a major war, Ukrainian agribusiness not only stays afloat but continues to show ambition — launching new directions and developing those that require patience, capital, and a long-term horizon. The focus areas include processing, perennial crops, livestock, and a strong energy cluster. The goal is not just to stay in the market but to become part of the new economy.

We spoke with Serhiy Kravchuk, CEO and co-owner of Gals Agro Group, about what gives a business resilience, why Ukrainian entrepreneurs often outperform their European counterparts, and how to build a system that can work “for eternity.”

How has the war affected your company? What has changed fundamentally?

Well, we all got quite a kick that pushed us toward rapid development. Look: even despite the war, Ukraine’s agricultural market shows very strong dynamics. Many new processing enterprises are being built right now.

Before the war, that wasn’t the case. The war became a powerful stimulus for growth. People gathered themselves and started building.

Frankly speaking, we were lucky not to lose our land. Yes, in the first years grain and sugar production declined when prices were unstable, but our key strategic directions — defined long before the war — have remained. We’re sticking to the plan.

How did the war change your approach to strategies and projects?

We strive to make all the company’s divisions (and we’re a diversified group) more or less equal in scale and output. That’s the essence of diversification. We don’t want to deal with small projects — if we start something, it must account for at least 20% of the company’s gross income.

Even before the war, we planned to develop two main directions: bioenergy and perennial crops. Both remain key today.

The sugar segment, for example, naturally involves crop production — another significant share of the company’s income. But we’ve never been fans of just exporting grain abroad. I’ve always believed in developing processing industries.

How does that work in practice?

For example, we’re one of Ukraine’s leading turkey meat producers — that’s where the grain goes.

In another region, we have a mid-sized pig complex. So crop farming provides the foundation, followed by processing, livestock, poultry, and sugar production. That’s the core of our system.

Then bioenergy naturally became layered onto that foundation — because in any mid-sized or large agricultural business, energy production simply “suggests itself.” It arises organically since there are always residues and organic materials.

And another important direction is perennial crops — that’s a completely different horizon. If we had started growing perennials in 2008 instead of 2018, we’d be on a completely different level today. Many are afraid because this business has a 20–30-year horizon. But sooner or later, you must start.

Which perennial crops do you grow?

First and foremost — apples. A great project entirely focused on export. We don’t even sell them in Ukraine.

And hazelnuts. We’re among the largest producers — probably the largest orchard in Ukraine today, and the most technologically advanced one.

It’s a long-term project. The first good harvest comes in the sixth or seventh year. We calculate profitability starting from the point of full fruiting. It’s a great story — but you have to survive to that stage.

How profitable is such a project?

Hazelnuts can easily bring in at least €5,000 per hectare. Our business plan sets €7,000 net profit per hectare as the target.

Of course, it depends on the technology used. But typically, the return starts around year 4–5; if you cut costs everywhere, it may take 7–9 years.

We got our first harvest last year — and every following year, it will double.

It’s a difficult and financially demanding story. You can’t plant everything at once, so since 2018, we’ve been expanding the orchards every year.

Now we already have 500 hectares of orchards.

Did you plant anything during the war?

Yes. What we planted during the war hasn’t started bearing fruit yet, but that’s the kind of project that “pays back with eternity.” It’s one of those things where, years later, you look back and say: “I’m glad I didn’t give up or chase short-term profit.”

We see long-term potential here. One key aspect is climate — it’s changing dramatically year after year. But perennials aren’t affected by that. On the contrary, with drip irrigation, you’re practically independent of the weather.

Are you planning new directions beyond the ones already mentioned?

We have new promising projects that are already performing well, but they’re still relatively small. It’s too early to talk about them publicly.

You have experience launching projects outside Ukraine. What has that experience shown you?

Yes, we’ve started several agricultural projects in one of the European countries. Honestly, we realized that Europe is a paradise for us. Ukrainian entrepreneurs entering Europe are highly motivated and driven — something you can’t always say about Europeans.

They’ve grown unaccustomed to building new ambitious projects. Spoiled by EU subsidies and investment programs, they’ve stopped truly working. They’re used to waiting for money instead of investing their own. They’re not used to protecting their capital or diversifying. They lack the hunger to achieve something.

Meanwhile, we came and started doing things no one there had ever done before — really impressive things. That’s why I’m confident that all Ukrainian companies expanding into Europe will be highly successful. Europe has stagnated — and in my view, it needs the same kind of shake-up that Ukraine has experienced.

You’ve mentioned the “tone” of Ukrainian business several times. What do you mean by that?

We’re all in good shape — fully energized. Just look at how much construction is happening in Ukraine right now. Both new projects and those started before the war are continuing in most cases. Plants are being built — starch, potato processing, pasta production, and so on.

What has become the foundation of your company’s resilience?

If your project is well-calculated and your strategy is clear, your resilience lies in your team. Of course, during wartime not everything is ideal. But the challenges we face now existed even before the war — they’re not problems, they’re tasks. If you have a goal, the path may change due to circumstances, but the goal stays the same. Generally, it’s not military factors but state management issues that affect business in Ukraine the most. But we’ve been working here a long time — those who’ve been in Ukrainian business for years have learned to adapt. You just have to keep doing the work.

Were you able to keep your team after the war began?

We employ thousands of people, and all the key staff have stayed. We supported everyone — including helping relocate employees’ families when needed. People know they’re part of a team that always has their back.

Has your management model changed during the war? Perhaps the owner became more directly involved?

No matter what happens, it’s strictly forbidden for the owner to take over the controls and push aside management. If a manager leads a project and bears responsibility for it, the worst thing an owner can do is interfere. If someone takes responsibility, give them room to act. Support — but don’t obstruct.

Bioenergy — particularly the biomethane plants you’re actively building — is that a strategy or a response to the energy crisis?

We’ve never seen biomethane as a separate business. It’s part of bioenergy — a strategic direction. And honestly, this is one of those rare cases where a true blue ocean lies ahead.

Those who have already entered or are just entering these projects have a strong future ahead. We started thinking about it back in 2000, and actual construction began around 2016. Today, we operate six biogas plants — each using different feedstock and technologies.

The path was long, complex, and multifactorial. It’s not just one or two sites but a complete production cluster. And now we can see that many agricultural companies, even during the war, are also adding bioenergy to their portfolios. The market has matured.

Do you see the industry actively reviving?

Absolutely. New plants are being built, old ones restarted, and acquisitions are happening. The market is moving. It’s a segment where scaling up doesn’t feel risky.

When the energy crisis began — especially during blackouts — our own generation facilities became our insurance. The regions where our sites are located operated without interruptions. Power outages didn’t occur, not just for us but also for neighboring grids, because we provided stability.

What capacities have you reached today?

Altogether, we generate over 15 megawatts of electricity across various regions. Part of that energy is already used for biomethane production. From there, it’s a matter of strategy — whether to focus on the electricity market or on biomethane.

The growth potential is enormous. If anything can slow it down, it’s not technology or demand, but internal factors — organizational processes, state policies on biomethane, and market access conditions abroad.

How important is the EU factor in this context?

The European Union is the main consumer. And the situation here is completely different from, say, grain exports, where barriers constantly arise. The biomethane market is open, and attitudes toward Ukraine are positive. The key is to understand that and act on time.

The numbers speak for themselves: by 2030, the EU plans to produce 35 billion cubic meters of biomethane. For comparison, before the full-scale invasion, Ukraine consumed 20 billion cubic meters of natural gas.

Currently, Europe already produces 6 billion. That leaves 29 billion — a huge window of opportunity. Whoever manages to claim their niche will be among the leaders. It truly is a blue ocean.

If Europe is already planning its biomethane production, is there a risk that Ukraine might be too late?

Yes, that’s exactly the risk. The EU already has precise plans — where and when its own biomethane will be produced. If Ukraine doesn’t declare its capacity now, doesn’t say, “We can guarantee this volume and deliver it,” that train will simply leave the station — just like we once missed the bioethanol opportunity. Europe built its capacity, saturated the market, and no longer needs Ukrainian ethanol. If the state doesn’t act now, the biomethane train will leave too. But we still hope there’s some common sense left in regulation — because this industry can take off. Its potential is enormous.

How significant a role can your company play in this process?

Of course, I’m not saying we’re a player capable of producing a billion cubic meters ourselves. We can’t do that as a single company. But even if we increase our own production fivefold — everything we make will sell easily, because demand is there. Still, in the big picture, that’s just a drop in the ocean.

However, on the national level, Ukraine now has a chance to take a significant share of this market. But it all depends on how well we organize things domestically.