Few people know that used motor oil can have a second life. And even if they have heard something about it, they don’t always understand what to do with this oil in practice. The unique Belarusian-Israeli company “DVCh” in Krupki aims to change this situation, increasing its production volumes by at least 20% each year.
Several months ago, “Pro Business” visited the enterprise. At that time, we discussed the situation on the Belarusian recycling market with the founders. This time, we decided to talk about achievements in production, prospects for entering foreign markets, and the overall idea that motivates the entire team to move forward.
Managing Director of “DVCh-Management”
“DVCh-Management” is a Belarusian-Israeli company that specializes in the recycling of industrial and motor oils. The construction of the production facility cost approximately $20 million, which was raised through foreign investments. The launch took place in 2015. The company became the second project in the CIS that retains the economic benefits of recycling while reducing the negative impact on the environment.
More information about the company’s history and activities can be found here.
“The volume of used oil purchases has almost tripled, but we continue to set even more ambitious goals.”
Alexander Vasilko:
— Today, the domestic oil recycling market is quite competitive, with players comparable to us in scale. However, most of them are small companies. They can temporarily offer prices below market rates to attract customers, but that’s not our approach.
We think strategically and focus on long-term prospects. We sign contracts with clients for a minimum of one year, and then we operate like Swiss watch.
Yes, perhaps our services are slightly more expensive. But we justify every ruble by ensuring our clients comfortable operation and eliminating headaches within our area of responsibility. Generally, large enterprises tend to choose such partners. However, we are not out of touch with reality and always stay “in the market” regarding pricing.
Our main clients are major enterprises in the Belarusian and Russian markets. Among them are “Belaruskali,” “Belorusneft,” “Technonicol,” “Uralkali,” “BelZhD,” “Atlant-M,” and other companies from various sectors.
When a client comes to us, they can always count on consistently high quality products and on-time delivery. While this might not surprise anyone in certain niches, it is highly valued in the petrochemical industry. If there is a need for an unscheduled delivery, we usually accommodate and provide everything necessary even on weekends. The secret is that we have an excellent logistics team. Moreover, we recently expanded our fleet and added several outsourced vehicles.
For several years, we have been systematically engaged in educational efforts. We explain to small and medium-sized businesses why it is so important to dispose of used oils correctly rather than burning them. We inform them where they can recycle oils and how the process works.
Many company owners, such as those running service stations, used to completely ignore this issue and kept no records. But thanks to our efforts, the market has become more informed.
The volume of used oil purchases has nearly tripled over the past few years, but we continue to set even more ambitious goals.
In terms of production volume of recycled oil products, we have approached 700 tons per month, starting from 200 tons. Our goal is to collect and sell a thousand tons by the end of 2024.
In the long term, we aim to help Belarus become one of the leading countries in the oil disposal segment. We expect that by 2030, we can achieve recycling of 50-70% of the total volume of used oil. For this, our production capacities should reach approximately 3-4 thousand tons per month. Given the company’s growth rate, I believe we will be able to meet global standards.
“Introducing alternative products to replace imports”
When we have a surplus of recycled products, the Russian Federation serves as our market for sales. We have been working there for a long time and successfully, but we are still adapting. Currently, active negotiations are underway with major potash companies.
Our products undergo laboratory and industrial testing—a process that takes about 8 months. Contracts are then finalized and prices are determined. The sales cycle is long and complicated, but once completed, we will be ready to meet all the needs of the largest enterprises.
Of course, the Russian market is characterized by its scale, especially in the oil and gas sector. For example, while in Belarus we only collaborate with “Belorusneft,” in Russia there are dozens of such companies. We know every player and are negotiating with each one.
Today, Russian companies are already reaching out to us with requests, asking us to work as quickly as possible to avoid halting their production.
Naturally, we fully understand the situation and strive to deliver results promptly.
Our promotion in the Russian market is also aided by the push for independence from imported products. Many companies have faced unavailability of products due to sanctions. We are actively developing alternatives and will soon present the market with these substitutes. This is not just rhetoric for the sake of demagoguery or self-promotion. We have modern production facilities with state-of-the-art laboratories and skilled personnel, so we have all the capabilities needed.
We can consider Kazakhstan as our benchmark and role model, where a similar enterprise has been successfully operating for many years. Its activities have served as a catalyst for the development of the industry. There, clear and transparent control mechanisms are in place, and the disposal system is well centralized. I believe our country does not need to reinvent the wheel; it is sufficient to study the experience of Kazakhstan or European countries. To promote this agenda, we have hired a lawyer who interacts with relevant authorities and proposes current measures for development on our behalf. This process takes years, but there is progress.
Our sector faces the same challenges as those in the area of waste separation. In Belarus, there are companies that specialize in processing specific products, but the country is not yet ready for sorting. That is why we go out to enterprises ourselves, act as experts at conferences, and write articles in the media. People in relevant industries should know that used oil can have a second life without harming the environment.
I have no doubt that we will achieve success. It all comes down to our team. These are people who are genuinely interested in coming to work and tackling complex challenges. Each individual is deeply engaged in the processes and is passionate about the mission.
I am confident that if any team member is offered a higher salary elsewhere, they will still choose to stay with us.
We are a young team, but we have mature goals, with each person doing what they love. This is why we are able to grow so rapidly and successfully tackle ambitious tasks.
“From the very first steps, the client must believe that we are a serious company.”
Vadim Kozlov, Deputy Sales Director of “DVCh-Management”
Vadim Kozlov, Deputy Sales Director of “DVCh-Management”
— Our products are used in many industries. For example, in the production of fertilizers, roofing materials, drilling fluids, asphalt mixtures, and concrete products. Although all products have a hydrocarbon base, they are very different. Each sector has its own specifics. For instance, for fertilizer manufacturers, we offer anti-caking agents that prevent granules from clumping during transportation. There are many types of fertilizers, and a unique solution is tailored for each one.
Before suggesting anything to a client, we need to learn about their product: the chemical composition, the method of applying the anti-caking agent, the application temperature, and much more.
Our chemists can select the right formula and create an effective sample. Each time, we create something new, even within the same industry.
The main benchmark for our clients is price. There’s nothing unusual about that—it’s where the dialogue begins. However, the determining criterion remains quality. We have areas to work on, but we also have much to be proud of. For example, take the anti-caking agent. Industry experts consider a consumption rate of 2.5 kg per ton of fertilizer to be a good standard. Our products achieve results with a consumption of just 700 grams per ton. This means our product allows clients to reduce the consumption rate of the reagent by 3.5 times!
The competitive advantages of our products are identified during the testing phase. Therefore, it is crucial for us to demonstrate to companies that we are a serious player with the necessary experience and sufficient production capacity. After that, the client’s specialists conduct research on the product sample and identify all its advantages and shortcomings themselves. In this field, it’s definitely not possible to make grand promises and sell a pig in a poke. Until the client receives positive results, no purchasing decision will be made. Thus, our sales largely rely on diplomacy and the ability to negotiate in order to expedite the completion of all formal procedures. It is also important to establish communication between the scientific specialists in our laboratory and the client, ensuring that their interaction is as productive as possible.
We are focused on achieving our strategic goal—signing contracts with all the major players in the Russian market.
‘For the industry to thrive, it is essential to make people informed.’
Nikolai Luksha, Head of the Procurement Department of “DVCh-Management”
Nikolai Luksha, Head of the Procurement Department of “DVCh-Management”
— In Belarus, a significant portion of used oil is still burned uncontrollably, which causes enormous harm to the environment. Through our conversations with people, we realize that many are not even aware that burning is prohibited and that there is Article 16.44 of the Code of Administrative Offenses, which states that the waste of a commercial entity cannot be classified as consumer waste. Unfortunately, in some sectors, such violations are widespread.
Another issue is that not everyone understands how harmful this is. Not all manufacturers ensure a safe ventilation system, which means that smoke often settles right in the room where the oil is being burned while personnel are working. People are often unaware that their health is at risk. That’s why we take on an educational role.
While most people in the capital region are aware of the problem thanks to our efforts, it is much more challenging in the regions. There, about 80% of people are still unaware of the negative consequences. Additionally, many simply do not know how to properly dispose of used oil. We are trying to find solutions by collaborating with local utilities that have their own or our containers for collecting used oil. We inform people of the necessary addresses where they can drop off used oil. And when the volumes are large, we go out and collect it ourselves. In this way, we are building infrastructure—partly addressing the problem of recycling and disposing of used oil.
To draw attention to environmental issues, we participate in a large number of events. For example, in August we will be speaking at the Ecology EXPO conference. Previously, we took part in the ‘Brand of the Year’ competition and various forums, where we presented reports on the harm caused by burning and the impact of machine oil on the environment.
A significant achievement and indicator of our progress for us is the steady growth in production volumes — at least 20% annually.
Furthermore, we have also influenced efforts to update existing legislation through our appeals. I believe these are very important indicators that we are moving in the right direction.
