Outsource, then CleanThe Ukrainian cleaning market started its development about 10 years ago and grows with rapid speed. For example, in 2005, according to the International Institute of Building Care (Kharkov), its volume was $50 million against $25 million in 2004. It’s the western companies’ “fault” that the cleaning services got that popularity. It’s also the active construction of offices, shopping malls, expensive apartments with using of special construction materials. The specialists don’t foresee the reducing of growing speed, because the quality of potential clients of cleaning companies doesn’t reduce. The subjects do the active damping while searching for the clients. The biggest competition is in the sphere of premises cleaning. Its cost has reduced in 2005 compared to 2004 from 6 grivnas to 2-3 grivnas for one sq. m.

Even though this year, according to Iryna Kladko, the marketing specialist of Shaden Group, opinion, because of the unclear situation at the constructional market, which are connected with freezing of some constructions to “better times”, some of the small cleaning companies had to reduce their staff and close for some time. The bigger cleaning companies used the moment and instantly offered their services in the new profitable conditions.

Game Slowing Down

According to International Institute of Building Care, there’re about 150 cleaning companies in Ukraine. This year the number of cleaning companies increased. The biggest players (with a number of staff from 50 people and more) are Actual Service, DaLa, Den, Dussman-Ukraine, Euro-City, Clean-Star, Dussman Ukraine, Euro-City, Clean-Star, Clean-Tech, Primex, Technosila, Ukrchimcleaning, Center of 1000 Services, Clean Decision, Shaden Group (all of those companies are from Kiev), West Service (Ivano-Frankovsk) and some others. They fill just about 60% of Ukrainian market. The medium-sized companies fill about 35% of the market. The small companies fill 5% of the market. It’s necessary to mention, that this structure doesn’t consider the team of cleaners, which prefer being promoted by references. It’s difficult to estimate their part at the market; it’s not higher than 5-7%.

This year the companies, which do the cleaning not as outsourced service, appeared. For example, the shopping mall opens the cleaning company, which sooner will be able to serve not only its own shopping mall, but also the other companies. For example, the capital shopping mall Karavan refused from the services of cleaning company Den and created its own cleaning structure. The cleaners think that this trend can lead to increasing of expenses for business organization and deterioration of services quality.

Vladimir Kucherov, the general manager of capital company Kiev-Berlin-Service, which does the supplying of equipment and materials for cleaning industry, said:

— Lots of managers think that they can embrace all kind of activity, including the cleaning of premises. They suppose it’ll be cheaper. However they don’t take into consideration the expenses on staff hiring, schedule making, salaries, buying of equipment and support consumables. They need to hire the administrators for that. Even if they buy the expensive equipment, they also need to train their staff and teach them how to deal with this technique.

After appearing of new companies at the market the experts noticed the reducing of profitability of some kinds of services. Despite of the growing of expenses, connected with transportation, salaries, materials and equipment, the cleaners have to reduce the prices of their services.

At the moment, according to the International Institute of Building Care, some operators have the profitability of their services 10%, more often – 5-6%, sometimes – 1-2%. The big companies reduce the cost of their services in order to get a big order, which guarantee the monthly profit. At the same time there’re lots of niches at the market. For example, there’re not much orders for cleaning of Venetian Blinds, ventilation systems etc., because the clients know less about these kinds of services, there’s a lack of specialists and money for buying of specialized equipment. However the profitability of these jobs may exceed 50%.

As Iryna Kladko said, this year the cost of services closed to the amount, which the clients are ready to pay. Each cleaning company reacts at the increasing of prime cost in a different way: some immediately increase the price; the others keep the old prices to keep the clients. Everything depends on the goal, which the players of the market have.

The Ukrainian market is getting more attractive for the foreign companies. According to the operators’ opinion, this year three service companies of the world level came to our country to “check the situation”.

Staff Rules

The weakest chain of each cleaning company is staff. People consider cleaners as dirty and non-prestigious job. Besides, the salary in this sphere has grown, but it doesn’t exceed 500 grivnas in province, 750-900 grivnas in the capital. That’s why the fluidity of staff is really high. The big cleaning companies have to keep the big HR-departments, which always do the hiring, and pay for the training of specialists, especially if the company specialized on the difficult jobs or use lots of cleaning technique. Naturally, the trained staff has to get higher salary, in order to keep it from seduction to work in the other company.

There’re no educational institutions in Ukraine, which prepare the managers and specialists of higher qualification for cleaning business. Because of the lack of knowledge, lots of companies fail at the cleaning market.

One of the ways to solve the staff problem, according to Vladimir Kucherov, is getting of effective technique, by means of which you may reduce the number of cleaners and increase the salary of the rest.

Ukraine Don’t Deal With Cleaning Equipment

The cleaning technique isn’t produced in Ukraine, that’s why the native cleaning companies generally use the equipment of German, Italian, American, British production. The most popular amongst the Ukrainian cleaners is the technique of German company Karcher (80% of machine fleet). At the moment the products of the company is represented by seven official dealers. The next year Karcher is supposed to open in our country its own department and change the structure of supply. The other equipment is also presented in Ukraine: Numatic (Great Britain), Portotecnica (Italy), Nilfisk (Dania), HAKO/Minuteman (Germany-US).

The vacuum cleaner was considered to be the main cleaning equipment for a while. At the moment the floor-washing-machines and sweeping machines are of bigger demand. They are especially essential in the companies, which do the cleaning of big areas and adjoining territories of trade and entertaining centers, stations and other public places. The diapason of prices for equipment is pretty big: the private businessmen sell those for no less than $200 (brushes, chemicals) and the big companies sell those for EUR20-100 thousands (machines for cleaning of big areas).

Clean Everything!

The experts of the market foresee, that 2006 the temps of growth of market and the quantity of operators leaves the same. The market will cost $75 millions. The main clients of cleaning companies will still be the trade, entertaining and office centers, industrial enterprises with the foreign capital (smoking, food and others branches). Because of the high competition the cleaners will search for the new clients, first of all amongst the successful native companies, which don’t use the cleaning services right now. Besides, the cleaning expansion has spread on the other branches: for example, the cleaning of big objects, prestigious apartments and adjoining territories. The cleaning companies is about to clean the public transportation, including the railroad and aviation ones.

The cleaners don’t mind to cooperate with the communal services for cleaning the living houses and adjoining territories (the same experiments are already held in Odessa and Lugansk), however they are frightened with a competition of maintenance offices, which have already included the cost of this service into the bills, and it’s much lower. The cleaning companies are also interested in governmental, educational, medical and pharmacy institutions, holiday hotels and the others sanitary centers. However it’s still early to speak about the cleaners as real professionals: our country is a bad businessman, it always has lack of money.

About Prospects

Vladimir Fevralev, 42, the scientific manager of International Institute of Building Care (Kharkov, since 2003, 8 people), the general manager of Budtechnologia Ltd. (Kharkov, since 2000, 38 employees, the annual turnover is more than 500 thousands grivnas):

“Cleaning is a wide business. It embraces the cleaning of private house, apartment, cleaning of the biggest enterprise, from the inside and outside. This is also the cleaning of territory, cleaning of engineering communication. In a word, the field for cleaning companies’ activity is really big. You may also notice that the Ukrainian cleaning market is growing much faster than the possibilities of cleaning companies. Right now the cleaners can’t embrace the all new projects. Instead of looking for the new clients, they’re more often stealing the clients from each other by reducing the price.

Against Cleaning

Vladimir Jurov, 59, the manager of administrative department of Publish-House “Blits-Inform” (Kiev, since 1992, 4.6 thousand of employees, the volume of production in 2004 is 616.95 millions of grivnas):

— Our publish-house doesn’t use the services of cleaning companies. We have a couple of reasons for that. Any mediator makes the cost of services higher, that’s why these jobs are done by the staff. Correspondently we know how influence them and increase their responsibility and speed. Besides, we do have a lot of information sources in the office, and the cleaning companies may get an access to them.

Source: “Business”