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Konstanta MF

In 2001, a Ukrainian furniture factory KONSTANTA began its journey. Over the years, the factory underwent significant changes, particularly in its approach to sustainability. This case study explores how the factory transitioned to green energy and sustainable practices, the challenges it faced, and the lessons learned.

Country

Ukraine

Greening processes

Energy Efficiency, Resource intensity, Waste management

Greening input

Renewable energy, Sustainable raw materials, Sustainable consumption (e.g. energy use, waste management, food at work)

Greening outputs

Offering greening services

Company size headcount

>500

Company size turnover

<€2m

Interviewed

Founder

Industry

Furniture manufacturing and Sale

Sustainability transition

The factory’s green transition began with a pragmatic approach to waste management. The factory generated industrial residue, such as wood, metal, and fabric scraps, which initially posed a financial and environmental challenge. Rather than discarding these materials, the factory found ways to recycle them, creating a dual benefit. The factory owner explained, “First, it was about saving money… It was either throwing these wastes away or recycle them into materials to save money. We chose money. Who would have known how much this would impact us during the time of war, when the knowledge about greening practices quite literally saved this company from collapse?” More on that later. 

This recycling effort was not just a cost-saving measure; it also reduced the factory’s environmental footprint. For instance, metal shavings left over from machining processes were sold as scrap metal, which was then melted down and reused. Similarly, fabric scraps were recycled into felt, used as padding in mattresses, and wood waste was repurposed to heat water and buildings, eliminating the need for gas.

 

The decision to adopt more sustainable practices wasn’t only about economics; it also had a profound impact on the factory’s workforce. Before the green transition, littering was commonplace on the factory premises. The environment, filled with dust and industrial residue, wasn’t visually appealing, leading some workers to casually discard empty bottles and other debris, seen as a “no biggie”. However, this behavior changed as the factory implemented green practices. The installation of recycling bins for plastic bottles and solar panels inspired a cultural shift among the workers

 

“After the bins were installed, the green transition influenced the behavior of the workers. They started littering much less, influenced by the appearance of solar panels and such” 

 

This shift in behavior extended beyond the workplace, as employees began to adopt greener habits in their daily lives. The factory also introduced energy-efficient practices, such as switching to LED lighting, which reduced energy consumption and material use. “Ten years ago, we switched to LED lamps, which significantly reduced the amount of wiring needed and lowered our overall energy consumption,” the owner shared.

The journey to sustainability wasn’t without its challenges. The most significant hurdle came with the onset of the war in Ukraine. When the factory initially installed solar panels, it was a small experiment. However, the war brought widespread power outages, and the solar panels became a lifeline. “We regretted not implementing this sooner and not seeking support from funds, as loans and grants stopped being available once the full-scale invasion began,” the owner reflected. 

 

Despite these challenges, the factory managed to keep operations running, relying solely on green energy during blackouts. Another challenge was the maintenance of green technologies, particularly the solar panels, which required constant monitoring, especially after sandstorms. Additionally, the quality of recycled materials, such as cloudier recycled cellophane, sometimes fell short of the standards for new materials. The financial aspect of the transition also posed a challenge. Installing solar panels was costly, with a payback period of up to five years. This required careful budgeting, as it impacted on the company’s short-term finances. However, the factory owner believes that this investment was crucial for long-term independence and sustainability. 

 

Financially, the factory saw benefits from its sustainable practices, such as recycling metal shavings into usable materials, which generated additional revenue and reduced raw material expenses. However, the owner noted a disconnect between their sustainability efforts and client interest. “Currently, with global salary reductions and economic downturns, clients show less interest in environmental sustainability,” the owner explained. In Europe, where the factory works with large companies like XXXL Lutz, there is little willingness to pay extra for ecological standards. The owner also observed a shift in consumer behavior, with many European buyers opting for cheaper, lower-quality products from China rather than eco-friendly European goods. This trend highlights a broader challenge in the market: while the factory is committed to sustainability, the demand for green products remains limited.

Learning points and actions to consider

Looking back, the factory owner identified several key takeaways. First, the importance of planning for sustainability from the outset was emphasized. For example, building designs should consider the optimal placement of solar panels. “Not all roofs are suitable; they require the right slope and orientation,” the owner advised. The owner stressed the need for greater energy independence. “In the future, we believe that the independence of every business and enterprise should be connected to green energy. It gives additional freedom from certain gas-monopolized countries and improves the ecology of the planet,” the owner concluded. When we asked him to give advice to other family businesses who want to see benefits of renewable energy, the owner gave us a bitter smile that didn’t reach the eyes. He suggested that: 

 

“Spending time in a city like Kharkiv, without electricity and water for weeks and weeks, could demonstrate the advantages of solar panels, when you are the only powered building in the district. Makes you put things into perspective. Sadly, sustainability and renewable energy aren’t always about love for the planet. Not today.” 

 

Then, in a much lighter tone, he shared how neighboring business owners and workers from the same industrial district came to Konstanta to charge their phones and such. “It’s good that Ukraine is very sunny and warm during summer. This solar energy really brings people together,” he laughed.

Reflections

  • How to adopt green practice effectively for a real impact on the company’s business?
  • In which direction is the market going?