Back in 2000, a few Ukrainians were on the outlook for a couple of thousand dollars to start up a small metal factory in Chernyakhiv, a rural city in the Zhytomyr region in Ukraine. This was the starting point for a Danish-Ukrainian joint venture, which today is a modern metal business exporting components to Denmark and selling bio heating units in Ukraine, among other things.
– In the beginning we got hold of a few used metal cutters from Denmark and started up the business in and old and worn-down building, said Victor Ivanytskyy, CEO of Danico.
Step by step, Danico has evolved. Ongoing investments were made in yet more sophisticated machinery like CNC machines, laser cutters, and most recently the company has bought a fully automatic metal processing unit enabling Danico to deliver high quality precision parts quickly, reliably and competitively.
Hiring and training more people
The ongoing growth of Danico has also led to a constant staff increase, and combined with the more sophisticated production, the company needed to increase the use of resources for training. This has been on the job training, and in cooperation with the local technical school Danico has facilitated the access for students to train using contemporary technology.
– The local staff did not have the necessary qualifications, and consequently we have carried out a lot of on the job training as well as assisted the local technical school by making modern machinery available, said Victor Ivanytskyy.
Growing to 10,000 m2
The original production facility was an old worn-down building, which quickly became too small. Consequently, Danico acquired a new facility that was renovated and enlarged into a modern 10,000 m2 factory by the end of the year, meeting high international standards in relation to health and safety, staff facilities as well as production flexibility.
Today, the company employs 170 people and is the largest employer in Chernyakhiv with a total population of around 11.000 – a substantial number of workers also come from nearby Zhytomyr with a population of around 300,000.
Local management are co-owners
The Danish-Ukrainian joint venture has been solid from the beginning. One of the reasons for the successful cooperation is that the Danish investors have insisted on involving the local management by handing over a significant part of the ownership to the two local executive managers. They are responsible for the day to day operation and have been instrumental in developing Danico.
Another important factor has been the ability to get external financing for the successive enlargements of the facility as well as the purchasing of new equipment and machinery.
This has been achieved in close cooperation with the Danish development finance institution, IFU, which during the years has issued three loans to Danico, totalling more than DKK 10 million.
– We have been engaged in financing businesses in Ukraine for many years, and we are pleased that our loans to Danico have enabled the company to carry on investments and become a good example on how to run and expand a sustainable business that can have a solid local impact, said Lisbeth Erlands, VP Mena & Europe, IFU.