The experience of recent years has led more and more companies to ensure they have contingency plans—measures designed at the strategic, organizational and operational levels in case a crisis arises. But how can one respond to crises that pose an existential threat? What decisions can a company’s management make when the unthinkable happens?
24 February 2022 is one of those dates that will go down in history, a day when the lives of millions of people changed forever. At Economía 3, we wanted to mark this date by giving a voice to some of the companies that had to make drastic decisions and adapt to a new reality for the sake of their business and employees.
Ukrainian company Vesco, one of the world’s leaders in the production and export of white plastic (ball) clays, is one of those firms that saw the war knock at its door. Before the outbreak of the conflict, it exported raw materials from the mining regions in the east of the country to more than 25 countries worldwide. Two years later, it has expanded to Castellón—where some of its main commercial partners are located—to keep its business going.
We spoke with the director of Vesco Spain, Oleksiy Afanásiev, about those first hours and how everything has changed for them since.
When the unthinkable happens
– What were those first days like? What did they mean for VESCO, how did you manage to get through them, and how did they affect your work?
The first days of the war were shocking and full of uncertainty regarding the future of all Ukraine, including the Vesco team. The priority was to guarantee the safety of the staff of the group’s Ukrainian companies. The team’s efforts focused on helping to evacuate employees and their families and relocating them from active combat zones to safer regions.
The next key tasks were drawing up a plan to evacuate the technical equipment and conducting a detailed assessment of possible scenarios for future work, depending on how the situation in the country evolved. We understood that it was necessary to do everything possible to ensure we could resume production at any moment in the future. After assessing the situation at the front, a decision was made to partially restart production processes.
Previously established logistics chains had been disrupted and blocked due to the full-scale invasion.
The main focus was placed on shipping finished products from warehouses via functioning railway routes. At the same time, the team searched for new logistical solutions for sea transport, since the established logistical chains were damaged or completely blocked due to the Russian invasion.
Stopping production
– The war did not only affect the country’s logistics chains; the extraction of raw materials itself also came to a halt.
We stopped mining and production in eastern Ukraine for several months. Thanks to the warehouses we had, Vesco continued shipping ceramic raw materials and gained some additional time to find new solutions adapted to wartime conditions.
For several months, our team demonstrated its ability to adapt to extremely difficult circumstances and still meet our objectives. The group implemented a series of measures to support and assist its employees in Ukraine. To avoid or minimise the consequences of dangers caused by military actions, the group’s companies in Ukraine introduced additional measures to prevent accidents.
We also managed to find new logistical solutions along Ukraine’s western borders. Production was partially suspended, intending to preserve production equipment and the prepared stocks of ceramic raw materials. Production was focused on meeting the existing demand, even though it had decreased significantly.
The new logistical routes turned out to be more expensive, meaning not all customers were willing to purchase raw materials at the new price. At the same time, we did not alter the base cost of ceramic raw materials—price increases were solely due to logistics expenses.
Working under the threat of war
– What posed the greatest challenge at that moment?
A major challenge for Vesco was the accelerated implementation of the business expansion strategy outside Ukraine—a strategy that had been formulated even before the invasion began. Spain was the priority country for expanding production, as it represented more than 25% of the company’s total sales.
At that time, we had been studying the possibilities of establishing production operations in several European countries for more than a year. From the first days of the war, the team put maximum effort into this direction. Therefore, already in the first days of the Russian invasion, applications were submitted to obtain the corresponding research permits and mining concessions in the province of Teruel.
Today, considering the decreased demand caused by higher logistical costs, Vesco continues to ship and fulfil 100% of all customer orders, both in the Ukrainian and international markets, including Spain.
In the east of the country, work takes place under the constant threat of enemy attacks.
Mining activity remains limited in the production sites in eastern Ukraine, where staff work under the constant threat of enemy strikes. The priority continues to be protecting the employees who ensure the production process.
Thanks to new logistical solutions, in August 2022 the first ship carrying ceramic raw materials from Ukraine arrived in Spain. Despite all the circumstances and force majeure difficulties, the company has managed to maintain its position as a reliable and responsible partner in the international market.
Over €3 million invested
– How has the work in Teruel progressed, and what are the prospects for the future?
Starting production of ceramic raw materials became a challenge for the team. After all, it is a new country, which means studying all the state regulations and legal frameworks. At the same time, we are a group of companies with more than 60 years of history, operating under international standards and using the best modern technologies. So we adapted quickly, involving local specialists and professionals. The willingness of state institutions to engage in open dialogue helped tremendously.
We have now begun extracting raw materials in a single mine, one of several planned deposits. Overall, our goal is to develop four or five quarries simultaneously, in order to offer customised solutions based on the raw materials required by customers. Vesco’s investment in Spain’s ceramic industry has already exceeded three million euros, and we continue exploring opportunities to further develop our raw material base.
In parallel with launching local production, extensive work is being done to ensure the high quality of ceramic raw materials and the most rational use of minerals. For this purpose, Vesco’s Research and Development Centre was created, based on a modern research laboratory inaugurated by the company in 2022 in the town of Andorra.
Sustainable use of mineral resources
The opening of this centre is an important step for the company, as it will help implement sustainable land-use principles in all operational processes and expand the possibilities for identifying the best ceramic raw material solutions for manufacturers.
Currently, not a single square metre of land is disturbed without a thorough project analysis. Before starting mining operations, all parameters of clay deposits—including quantity and quality—are carefully studied. Experienced technicians analyse the results and select the optimal proportions of different minerals to optimise the technological process and implement a zero-waste mining approach.
At customers’ request, our centre can provide the full chemical, mineralogical and granulometric composition of the clay, as well as its ceramic properties, including process curves that show how the material behaves when heated. All of this allows manufacturers to choose optimal body compositions and firing modes for different ceramic products.
Vesco uses mixing centres to meet the needs of ceramic manufacturers and to provide the extracted minerals with the best commercial properties. In Spain, there are two such complexes: one located in the port of Castellón de la Plana and the other in the province of Teruel. These facilities replicate the mass-preparation process of ceramic factories and ensure the required raw material fractions.
By creating an integrated production complex in Spain, we aim to provide customers with a full range of services and build strong relationships with local communities. Ultimately, we can confirm that our production plans for Spain are very ambitious.
There is enough Spanish clay, but not of the right quality
– Does Spain have the potential and resources to achieve a certain level of raw material sovereignty?
Indeed, there are significant clay deposits in Teruel. However, I would like to note that, unfortunately, the minerals from Spanish deposits, due to their physical properties, cannot provide the level of raw material quality that ceramic manufacturers require for first-class production.
Nevertheless, the development of local production will allow us to expand the range of customised raw material solutions based on local resources and strengthen supply stability by reducing logistical risks.
This is exactly what we are currently working on. We have Spanish raw materials, a substantial base of raw materials from other deposits, and mixing complexes—so we can and will strive to become a reliable partner in developing new solutions for Spain’s ceramic industry.
– How was the sector evolving, and what are its prospects for the coming years?
Spain is one of Europe’s largest producers of ceramic tiles. According to Mecs, the Spanish ceramic tile market is expected to grow at an average annual rate of 3.7% until 2026. That is why we believe in the Spanish market and continue investing in the development of local production.
