Russia: opportunity worth trying

We, Russians, have always been fond of cheese and nowadays suffer from shortage of quality imported cheese eager trying the products of Russian cheese-makers – all in vain. We must admit, however, that domestic manufacturers with sharp eye for fresh opportunities are developing this market rapidly. Yet, currently, technological base-level evidently is lagging behind European and needs to be improved as well as technologies, assortment, packaging. Thankfully, local companies in the field are supported by the state. Manufacturers of cheese are not satisfied with the quality and availability of the main ingredient –  fresh milk.

According to statistics (www.dairynews.ru), production of milk in Russian Federation, during the first half-year 2018 has increased by 3,7% in comparison with the same period in 2017. Thus experts predict further growth of dairy cattle. The ground for this optimism is a growing cheese production with its steady demand for high quality fresh milk.

The new cheese cluster is expected to produce as many as 25 thousand tons of cheese per year, the amount provided by four big manufacturers, also from Italy and Spain. Valio plant in Russia is also going to increase its output up to 15 tons. Dairies, located in the Moscow region complain about a shortage of local fresh milk so they have to buy from producers located as far as over 1000 km away.

In the line with the visible trend towards healthier food the demand for whole milk, milk with short shelf-life has increased significantly. For instance, in the premium  supermarket chain VKUSVILL as much as 70% of milk is fresh with shelf-life less than 5 days, which naturally is highly appreciated by customers. Also, demand for high- quality lactose free and A2 milk is on the rise.

Despite the steady demand for dairy products, there is a shortage of milk farms around Moscow. To meet this demand TH Milk Group from Vietnam is going to invest over $630 mln in dairy cattle in the Moscow and Kaluga regions. Russian EKONIVA is going to increase the number of dairy cattle on their farms. The estimated shortage is an impressing figure of 47 t cattle heads. It is no secret that the average annual basic yield indicator, enables us to assess the situation of dairy cattle breeders in Russia, which is lagging far behind the countries with developed animal husbandry.

What is making the matter worse, is the fact that – due to a long payback period, the milk cattle raising does not seem to be as attractive enough to investors as other branches of agriculture.

However, according to the Minister of Innovations and Investment of the Moscow region Denis Butsaev (www.kommersant.ru), there is yet a shortage of such projects in the region, although.  Favourable conditions are being offered to new farms: up to 35% of capital investment is returned and for the existent farms the compensation for modernization is going to be up to an impressive 50%.

The day-to-day consumption of dairy products by Russians people has sunk and is currently under the recommended dosage. While annual consumption of milk and dairy products for 30 years ago was estimated at 380 kg per person a year, nowadays it does not exceed 233 kg. The market is also witnessing a fast development of high quality powder milk, as well as special dairy products (i.e. for sport diets), A2 milk.

Taken as a whole, we clearly see that the dairy products market is developing, and there is also an Internet platform for trading milk to shorten delivery time.

The Minister Skvortsov said that right now high-tech sector of dairy branch is developing in Russia, now it is in investment phase (Interfax). By 2020 production of milk is projected to be 32,5 mln ton.

Based on this trend, Russia badly needs cutting- edge technologies, equipment in this sector. All this could be a worth trying opportunity to Finnish companies!

 


Julkaistu 29.10.2018