Second life from IG Paper Team

In 2022, Igor Oleshchuk, together with partners, founded the IG Paper Team – an engineering and installation company, which specializes in the work of designing and manufacturing; installation, project management and automation for pulp and paper and other industries in Ukraine and the EU. Partners have been working in the sphere of complex engineering solutions and industrial installation for pulp and paper industry for over 20 years. Our conversation took place in the beginning of August 2023 in Ukraine.

How do you evaluate business in Ukraine after Russia's large–scale invasion?

■    Despite all the economy hardships, there are companies that could keep their business stable or create new niches. As an example I would mention Nova Poshta  – the company reacted to the demand growth of international deliveries in Ukraine. The other exampleis from retail trade – Silpo and ATB. They spent a lot of money East and in the South of Ukraine. And they managed to quickly react, expanding trade in other regions of Ukraine. Among the industrial businesses that continue to successfully develop under the hour of war, I can guess such companies of the "other echelon" – which are developing and keeping the business stable – Torgtekhnika from Vinnitsa (cardboard and packaging manufacturing), Galician Paper Company, TPC (RСPM from Rubizhne), Dunapack Ukraine. So I’ll mention the Kokhavinska factory that keeps updates even in such hard times. As we used to say before only the KCPM, RСPM and Dunapack, now I would indicate the same activity and raise of another echelon. For most of these projects, in my opinion, the financing was secured even to the brink of war. The first thing was that the project was completed, not frozen.

Ukrainian drivers and wikis for business?

■    The main task can be cost–effective for different businesses. I respect that the main task of the Ukrainian business is manufacture load and profitability of operations, and search of alternative markets and products. Ecology is very important. But for Ukraine now, sorry, these are the tomorrow challenges, until the war is over.

How companies can develop now – by means of financial instruments, working capital, or other technical solutions?

■    At the moment, it is unreal to attract financial instruments in Ukraine. Abroad financing for businesses in the country of war also looks unrealistic. The same with equipment leasing. Therefore, I think it is a viable alternative tool for the development of a company in the current moment to invest in used equipment. This gives an opportunity to develop when facing market opportunity (re–develop the market, new niches, cost saving). Second Hand equipment for pulp and paper it is quite a technical and technological solution giving advantages and opportunities for businesses. Such equipment is present and it is not necessary to take 12–18 months to have it. The companies know exactly the quality of the products that thrive on such an opportunity. So, for today, it is problematic to provide services with new possessions, like start–up and installation work by foreign engineers in connection due to the travel risks to Ukraine.

What could be the pitfalls when buying Second Hand equipment?

■    Yes, there are certain barriers that have to be overcome, in order to get Second Hand equipment in proper functional conditions to reach planned outcome indicators and financial ROI. Everything can look simple and easy if done properly in the right time.

It’s not like that – there appear different delays with delivery and customs, work terms shifts, which, in turn shifts project terms and increase its cost.

What is the IG Paper Team’s USP?

■    IG Paper Team performs complex projects for search, evaluation, purchase, relocation, installation and start up of a machine / line / or plant for the customer needs. Comprehensiveness of holistic of our approach secures time bounds and costs of the projects. The customer gets one window to communicate with the IGPT team and confidence the assigned tasks will be achieved in defined terms. Therefore, our USP is based on the whole cycle of customer support with the installation of SH equipment (from search and audit and till bringing it into action) for the pulp and paper industry (corrugators, paper machines, processing and transport systems) and other industrial sectors, which is the bottom line for similar services to OEM (original equipment manufacturers).

How does the customer make investment decisions?

■    Usually, the customer has already decided on the available direction, niche or opportunity for investment. Next, the customer work out the "pros" and "cons" for them, considering options for installing used and new equipment. Our mission is to be with the client from beginning to end, implementing all stages of project support. Our clients have constant access to the project documentation, which is updated during the implementation of the project and is located in the "cloud", which simplifies communication and speeds up the exchange of information – this is also an advantage we give to customers.

Is it possible to carry out such a project for the customer by themselves?

■    I think this is rather difficult for many reasons. Not every company has on its staff on a permanent basis: installers, electricians, logisticians and customs officers who must be subordinated to this project. Errors or lack of experience in these areas can lead to critical inconsistencies and material costs and losses. The uniqueness of our offer is that the customer has only one contract, one window to communicate, one supplier, and one project manager. In this way, we try to be closer to the customer, to simplify the interaction process, by providing more benefit and value to the client. The project has to be completed on time and without unplanned costs.

How does the cost of installation work for new and used equipment differ?

■    The cost of these works does not differ. They are the same. But the cost of dismantling works is additional work that is not available when purchasing new equipment. Due to the fact that the labor price level in Europe is higher, the price ratio for dismantling in Europe to installation in Ukraine can be 65–60% to 35–40%.

How do you do tech examination of the considered for purchase equipment?

■    An evaluation is carried out based on a technical point of view. There may be several options. However, all technical and technological risks will be bear by the party making the investment decision. Therefore, the decision should be based on the technical and technological data analysis of equipment nodes and aggregates. This work is performed by a team of mechanic, electrician, installer and technologist specialists. It should be a comprehensive, coordinated approach and expertise. It is necessary to carefully explore equipment conditions, existing regulations, and service reports of the equipment considered (eg BHS, BWPS, etc.). The presence of long–term relationships with equipment manufacturers helps us to obtain more quickly and in more detail the necessary technical information about the equipment being considered for investment, which, in turn, helps the customer to make more informed and effective investment decisions.

I will give an example – according to the regulations, a part of this manufacturer must be replaced after 100 units of time, guided by the regulations, it is changed after 100 units of time. But, if you conduct an actual analysis and diagnosis of the part, it may turn out that the part is still suitable for operation and does not need to be replaced – the customer saves money. 2–3 such spare part items make a significant amount of money saved. But when it comes to used equipment, and certain specific nodes (drive, frequency converter) – this node can cost 20–30 thousand Euros.

And imagine that a list of equipment from 2–3 manufacturers is purchased – collecting reports from manufacturers can take a lot of time. Further, these reports should be combined into one document. But the downside of this approach is that good equipment is bought quickly. It is necessary to know the equipment conditions and prices being short of time.

Usually there are not 2 or 3 good equipment options at once. There may be 2–3 options of unsatisfactory equipment on the market, which you can look at for a long time, or high–quality second–hand equipment appears, which will quickly leave the market. Good equipment may not even come to market! Or it will be sold via internal communications, or internal corporate movements. The case when there are 2 acceptable options A and B is not frequent.

How is the dismantling and transportation process organized?

■    Dismantling of equipment and packaging includes marking of assemblies and parts. Each part or spare part has its own code, name, description, origin, photo and video, QR code displayed in the system. For this we use cloud technologies. The same technique applies to mechanical, pneumatic and hydraulic assemblies. This library begins to be created at the equipment evaluation stage, and is finally created at the disassembly stage. A certain set of spare parts/equipment can be placed on a pallet, which, in turn, is also subject to labeling, showing all its elements. Next, the equipment packed on pallets is weighed at the customs. With this level of information digitization, any installation organization can independently carry out further installation of equipment! The creation of this kind of catalog allows assigning single customs codes to the equipment, which, in turn, helps to avoid double taxation of the equipment. Then we proceed to custom documentation preparation. Lack of experience or training at this stage can lead to trucks with equipment being idle at customs, and this, in turn, can create significant unplanned costs for the customer.

For such cases, we have a knowledge base (library) about identified and unidentified equipment elements. Which allows to assign the appropriate coding to the equipment, and this, in turn, allows you to save funds and prepare details for further customs clearance. This is our competitive advantage and difference above a benchmark company. Therefore, at the moment when the customer receives a list of defective parts, he can immediately proceed to order the necessary replacements. So that when the equipment is delivered and cleared at customs, nothing will prevent installation and commissioning.

The equipment must be moved undamaged and on schedule and within budget. Unprepared entrepreneurs may experience significant delays in this area, which may lead to additional project costs.

Does the company have the resources to carry out installation work outside Ukraine?

■    Our capabilities are not limited to providing installation services in Ukraine. Our foreign division provides services in all EU countries. Moreover, we try to invite to work TOP engineers from pulp and paper industry, who have many years of experience in the industry, but for certain reasons cannot implement it at the current place of work. In turn our team of qualified specialists and interesting projects that are often a professional challenge motivate them to work with us. Moreover, we pay our employees a salary higher than the market average.

Also, in the process of installing the equipment, there may be a need to make a geodetic survey of the site, foundations, or conduct a 3D scan. The result is a ready–made engineering solution for foundation works for further installation of equipment.

How easy is it to do business in the conditions of martial law in Ukraine and abroad?

■    We created conditions for employees to work even in difficult wartime conditions in Ukraine (when there was no electricity – we bought power generators, when there was no mobile communication and the Internet – we connected them to Starlink stations. We also transported families of engineers to Lviv, and opened and office here. This helped us not to miss the current orders’ deadlines.This impressed our partners, and convinced us that we are capable of carrying out the most complex projects. Now we have in Ukraine 7 engineers working, 2 more have joined the ranks of the Armed Forces. We do good engineering projects. I am convinced that it is possible to create a high-quality engineering product that is in demand in the country and abroad, being in Ukraine during the war, contributing to the strengthening of the Ukrainian economy.

Geography of the company's customers?

■    The company fulfills orders in the EU, Turkey and Ukraine. We are also planning to enter the Canadian market for the provision of engineering services this year.

What is the most difficult part of the project?

■    There is nothing complicated. The most difficult thing is not to lose vigilance and pay attention to the details of the project at all its stages (from the preparation of the proposal, the correct technical audit, understanding of possible technical difficulties, and to the handover of the works). Great good grows from little good. This is like a project marathon, weighted among all team members. Therefore, every step of every team member is important. This is the main challenge.

How does a company carry out automation projects?

■    We cooperate with the SEngineering company. We demonstrate a high level in mechanical solutions, and SE are good in automation. We want to scale up the projects that we are currently implementing for the pulp and paper industry, for the food industry and other industries. I had a successful long-term experience of working with this company in many projects in Ukraine and abroad for pulp and paper industry. This is the case when partners synergistically complement each other and do not compete.

3 most difficult projects? Unique features?

■   One of the most interesting projects we carried out was the installation of a scrap removal system from cardboard making machine in Germany for a world leader in the production of box cardboard. The challenge of the project was the complexity of the task, the tight work schedule. We engaged 22 employees for this task. The duration of warehouse work was more than 10,000 man-hours. It was necessary to work in physically compressed conditions without the possibility of using the lifting equipment (crane), since the work was carried out at the zero mark near the paper machine. Therefore, all work had to be done manually on multi–level scaffoldings. We are proud that our work was completed on time. We had not had any cases regarding labor protection and safety. This project gave us the confidence that as a team, we can do a lot!) We also have one landmark project of moving a corrugator. The uniqueness of which is that the customer receives all services from one hand (from technical audit, geodetic survey to installation). We carried out these two above–mentioned projects at the same time. The third project I want to mention is the launch of a project to provide engineering services for one of the world leaders in the production of paper machines using Aveva E3D software.

How do your activities in previous places of work influence and are related to the current successes of IGPT?

■    Very strongly connected. The experience of working at enterprises in the production and design of equipment for the pulp and paper industry, and direct experience of integrating engineering systems at enterprises helps to carry out extremely complex tasks regarding the movement of used equipment or its installation, automation. This gave an understanding of the principles of operation of such manufacturing and processing enterprises, which, in turn, helps to provide customers with services of the appropriate level of complexity and 
quality.

What helps make projects truly successful?

■    Proximity to the customer. Literally and figuratively. The customer wants to be understood and respond accordingly to his requests and wants. The customer appreciates when this communication happens naturally on an intuitive level.