IN TANDEM FOR THE GOOD OF THE PEOPLE

The chairman of the board of di-rectors of Nemiroff Holding believes that revenues should be re-invested not only in business development, but also in projects of social importance. In this respect, a memorandum was signed on cooperation with the Klichko Brothers Foundation this summer, marking the beginning of a charity initiative.

"Health is the most valuable possession. Unfortunately, sport is a luxury for the rich today, because not everyone can afford to visit modern fitness centres and sports clubs. With this project, we want to ensure that sport in Ukraine is accessible to all regardless of wealth, age or place of residence," Vitaliy Klichko, chairman of the Klichko Brothers Foundation, declared at a news conference to mark the opening of the first sports complex, as part of the programme "We Are Building Sporting Ukraine Together".

"Ukraine's sports movement needs business assistance and support from sportsmen of world renown. Nemiroff Holding is implementing a long-term programme directed at the development of sport in Ukraine. Together with the Klichko Brothers Foundation, we are working to restore sports complexes in the regions and create good conditions for Ukrainian citizens to practise sports," the chairman of the board of directors of Nemiroff Holding, Aleksandr Glus, said.

It is no accident that the first complex chosen for the pilot implementation of the project was the sports hall in Nemiroff. This small town, with a population of 15,000, is known far beyond Ukraine, due to the Nemiroff trade mark. Today it is the leader of the world vodka market and the first Ukrainian brand of alcohol to have official international status. Incidentally, international status is given to a brand that exports at least 30 per cent of its products. TM Nemiroff is supplied to 55 countries in the world, while there are 25 different drinks products. The success of the company and its rapid development are eloquently proven by the figures: its turnover in 2004 totalled 202 million dollars, in 2005 - 397 million and in 2006 - 408 million.

Was it so easy to become a brand of world renown? Business is a tough world. It is difficult to imagine why, in the 1990s, when enterprises came to a standstill and hyperinflation was rampant, the director of the Nemiroff alcohol plant, Stepan Karlovich Glus, decided to set up this company.

The president of Nemiroff Holding, Aleksandr Glus, answered our questions.

- I still cannot explain how my father managed to persuade well-known businessman Richard Bittner to come to Nemiroff to see the factory and then invest in its development at a time of total economic collapse. This is how the joint venture with real, not fictitious, foreign money was created. Our factory was the first private alcohol production enterprise. Not everything was as smooth as it seems. As soon as the factory was off the ground, the law suddenly changed in 1996 and the export of vodka to Russia, our largest export market, stopped. We had to change our partners and begin building the brand at a new level. By 2003, the company was actively supplying its products to the foreign market and seriously developing the Russian market. Having set up a Trade House in Moscow, we started importing products ourselves and distributing them in all regions. All this bore fruit. One year later, our sales had doubled and another year later, they had increased fivefold. This is when the British magazine Drinks International recognized Nemiroff as the fastest growing alcohol brand in the world, for two years in a row. According to the international research company ACNielsen, Nemiroff was the most popular vodka in Russia last year. This is number one in the world's vodka market!

- How did you manage to win over consumers?

- Success was the result of many factors. We managed to achieve a synergy, having distributed duties between managers in the most effective way. In talking about our success, we cannot but refer to the unique drink, Honey & Pepper. It was developed by my father, just like all the other types of Nemiroff vodka. Before him, no-one had ever mixed honey and pepper in one bottle. It is impossible to imagine how this crossed his mind, but it was a genius idea. Honey & Pepper dropped into the market like a bombshell and literally blew it up; this set the stage for its success for many years ahead.

- Another question regarding fake products. 

- I should say right at the start that one thing is clear in world business: if no-one is trying to fake your product, this means that it has yet to become a brand. Only successful products are faked. In order to become a brand, a product must be on the market for quite a long time and prove its viability. Then counterfeiters do not risk the original suddenly disappearing from the market. I am convinced that it is the manufacturer's responsibility to protect its brand from attempts to fake it. For this reason, we are the first company to have introduced the laser protection method in the post-Soviet area. The essence of this method is that the time and date of production are engraved on the cap and neck of the bottle by laser ray. These marks cannot be removed or deleted, which is why it is regarded as the most effective method today. Overall investment in this method of marking at our factories has exceeded one million dollars. Earlier this year we introduced another unique system of protection, which people already call a "truth detector". I am talking about control of the opening of a bottle because we believe that the neck should be protected. We have developed a cap with a unique red ring which remains invisible as long as the bottle is closed. But once you turn the cap, the ring immediately appears and remains visible. This indicator makes it possible to see whether anyone has tried to open the bottle. Overall investment in equipment and the introduction of this system has already reached 5 million euros. All our products are provided with the new caps now, which is about 10-12 bottles per month.

- What is the basis of modern competition?

- By my nature, I am a consolidator and I call upon all my colleagues to reject methods of unfair competition, smear campaigns and other signs of an uncivilized market. I am absolutely sure that you should compete using your intellect, creative ideas, by improving the quality of your product and by working absolutely transparently and legally. In this case, success will come in the course of time. You know, everything should happen gradually in life and then you will definitely make progress. The most valuable experience is that which you achieve by your own efforts. We ourselves create the world that surrounds us.