A la Home­made

In 2012 com­pa­nies af­fil­i­ated with Bel­go­spishche­p­rom Con­cern are set to de­velop and pro­duce 46 new im­port sub­sti­tu­tion prod­ucts

Economy of Belarus - - CONTENTS - Ta­tiana LOBAS

In 2012 com­pa­nies af­fil­i­ated with Bel­go­spishche­p­rom Con­cern are set to de­velop

and pro­duce 46 new im­port sub­sti­tu­tion prod­ucts

Do­mes­tic Foods Taste Bet­ter

In 2011 Be­laru­sian food pro­duc­ers made Br819.2 bil­lion worth of im­port sub­sti­tu­tion prod­ucts (cig­a­rettes are not in­cluded), up 2.3 times com­pared with 2010. They in­clude con­fec­tionary, bot­tled vegetable oil, potato chips, cream soap, li­censed beer, baby foods from ex­otic fruits and veg­eta­bles, pureed veg­eta­bles with meat, juices and nec­tars in Te­tra-pak pack­ages, other foods.

Ap­pre­cia­ble changes were ob­served in the baby foods seg­ment. It is no se­cret that some years ago many moth­ers pre­ferred im­ported baby foods. To­day, pref­er­ences are shift­ing to­wards do­mes­tic prod­ucts. Price is not the only rea­son for the trend. In re­cent years, Be­laru­sian baby food com­pa­nies have been up­graded and equipped with the lat­est tech­nol­ogy and equip­ment.

As a re­sult, they de­vel­oped new types of world-class prod­ucts, in­clud­ing a va­ri­ety of dry baby for­mu­las, fer­mented dairy prod­ucts with ad­di­tives, pre­serves with vi­ta­min C, beta-carotene, zinc, io­dine, and cal­cium. Do­mes­tic pro­duc­ers now of­fer 10 types of baby foods that were im­ported in large quan­ti­ties be­fore. This in­cludes pureed car­rots and green peas with chicken and buck­wheat, pureed pump­kin with beef, pureed mar­rows with beef and rice, pureed car­rots with liver, pureed pump­kin with liver and semolina. In 2011, lo­cal pro­duc-

Ac­cord­ing to sta­tis­tics, do­mes­tic prod­ucts ac­count for 95% of Be­larus’ food mar­ket. How­ever, in Be­laru­sian stores you can find prod­ucts from vir­tu­ally all parts of the world, like olive oil from Greece, mar­malade from Poland, le­cho from Hun­gary, mar­i­nated champignons from China, toma­toes from Spain, cit­ruses from Egypt, co­gnacs from Ar­me­nia, sweets from Ukraine… No­body minds the di­ver­sity of foods on Be­laru­sian store shelves. How­ever, you would prob­a­bly agree that not all of them are the crit­i­cal im­ports con­sumers and pro­duc­ers can­not do with­out. Many im­ported del­i­catessen can be re­placed or ousted by Be­laru­sian tra­di­tional foods. That is the goal of the gov­ern­ment im­port sub­sti­tu­tion pro­gram im­ple­mented by com­pa­nies af­fil­i­ated with Bel­go­spishche­p­rom Con­cern.

ers made 10.8 mil­lion stan­dard cans of baby foods.

The most pop­u­lar baby food brands to­day are Top­tyshka, Vyras­tai-ka, Novka, Detka, Ne­poseda, Gamma, and Nash. By the way, these brands are fa­mil­iar to for­eign cus­tomers, too: Made in Be­larus pre­serves, purees and juices sell well in many coun­tries of the CIS.

Do­mes­tic pro­duc­ers have re­freshed the as­sort­ment of con­fec­tionary prod­ucts to chal­lenge for­eign pro­duc­ers. The joint ven­ture Spar­tak has launched the pro­duc­tion of white choco­late, in­clud­ing choco­late with green tea and straw­berry fill­ings. The Slodych con­fec­tionary of­fers in­stant cook­ies for chil­dren that used to be im­ported be­fore.

The pro­duc­tion of li­censed beers by the Krynitsa brew­ery is an­other im­port sub­sti­tu­tion suc­cess story: in 2011 the com­pany started brew­ing the OET­TINGER brand to add to Kal­tenberg Pils which pro­duc­tion was launched some time be­fore. In 2012 the com­pany plans to pro­duce at least 1 mil­lion de­caliters of the OET­TINGER beer brand.

In 2011, the Kletsk-based Gamma Vkusa com­pany started mak­ing juices and nec­tars for chil­dren in 0.2 liter Te­tra-pak pack­ages with a plas­tic straw. The prod­ucts were a sales hit: dur­ing the first year over 2.8 mil­lion stan­dard cans were pro­duced to the tune of Br10.3 bil­lion. Af­ter the up­grade and ex­pan­sion of con­tract pro­duc­tion of world fa­mous to­bacco brands, Grodno To­bacco Fac­tory Ne­man man­u­fac- tured over 22 bil­lion im­port sub­sti­tut­ing cig­a­rettes es­ti­mated at over Br1 tril­lion. In fact, Be­larus turned into an ex­porter of fa­mous to­bacco prod­ucts which are im­mensely pop­u­lar abroad.

The vig­or­ous ef­forts to pro­mote im­port sub­sti­tu­tion helped meet the do­mes­tic de­mand for high qual­ity prod­ucts, boost ex­ports and re­duce the for­eign trade deficit. In 2011 Be­larus dou­bled the ex­ports of ketchup, may­on­naise, mar­garine, and soap from $900,000 to $1.8 mil­lion. The im­port of beer shrank con­sid­er­ably: over the 11 months last year Be­larus im­ported 8.2 mil­lion de­caliters to the amount of $51.6 mil­lion, or 62.4% as against the same pe­riod in 2010.

The con­fec­tionary in­dus­try re­duced the for­eign trade deficit by $41.5 mil­lion, in­clud­ing $17.4 mil­lion due to the pro­duc­tion of pas­tries, $20.2 mil­lion in choco­lates and choco­late prod­ucts, $4 mil­lion in sugar-based con­fec­tionar­ies.

Pri­or­i­tiz­ing Qual­ity

In 2012 com­pa­nies of Bel­go­spishche­p­rom Con­cern will boost the pro­duc­tion of 46 im­port­sub­sti­tut­ing com­modi­ties. These in­clude white choco­late with var­i­ous ad­di­tives, caramel and tof­fee, coated jelly can­dies, new sorts of cook­ies, liquors, oil and fat prod­ucts.

Ac­cord­ing to head of the con­cern Ivan Danchenko, im­ports must be re­duced by in­creas­ing

the as­sort­ment and im­prov­ing the qual­ity of prod­ucts, us­ing nat­u­ral in­gre­di­ents and en­hanc­ing the eco­log­i­cal safety of Be­laru­sian-made food­stuffs, es­pe­cially those made of lo­cal raw ma­te­ri­als, namely milk, sugar, syrup, flour, pota­toes, fruit, and veg­eta­bles. With this in mind, Bel­go­spishche­p­rom Con­cern is go­ing to up­grade ex­ist­ing fa­cil­i­ties or even launch the man­u­fac­ture of more pop­u­lar goods.

The in­dus­try is cur­rently im­ple­ment­ing an ac­tion plan to grad­u­ally sub­sti­tute im­ported goods. The first group, for ex­am­ple, com­prises seven types of prod­ucts: vegetable and an­i­mal fats and oils; baby food made of pow­dered milk; tomato ketchup and sauces; dress­ings and may­on­naise; sauce in­gre­di­ents, fla­vor­ing agents or mixed spices; cig­a­rettes.

The sec­ond group in­cludes food­stuffs, which im­port is cur­rently in­creas­ing. The list has been drawn up in line with the rec­om­men­da­tions of the Trade Min­istry in or­der to meet the con­sumer de­mand. The third group con­sists of prod­ucts that are not man­u­fac­tured in the coun­try or pro­duced in small amounts.

The 2012 im­port sub­sti­tu­tion pro­gram en­vis­ages the man­u­fac­ture of four new prod­ucts in the brew­ery, can­ning, potato in­dus­tries, three prod­ucts in the liquor in­dus­try, two prod­ucts in the oil and fat in­dus­try. The ma­jor­ity of im­port-sub­sti­tut­ing prod­ucts (23 items) will be man­u­fac­tured by con­fec­tionery com­pa­nies.

How­ever, it is worth say­ing that not all im­ported in­gre­di­ents can be sub­sti­tuted by lo­cal prod­ucts. Food com­pa­nies will have to im­port cer­tain goods, namely ca­cao beans and but­ter, raisins, al­mond, sesame, com­mon wal­nut, dried apri­cots, sun­flower seeds for halva, agar, cit­re­ous pectin. But fill­ings can be pro­duced do­mes­ti­cally. Spe­cial­ists be­lieve that food pro­duc­ers should use more lo­cal ap­ple sauce, berries, ce­re­als, honey, syrup, mush­rooms, herbs, and spices. Be­laru­sian com­pa­nies can start the pro­duc­tion of pectin. Spe­cial­ists of the NASB Re­search Cen­ter for Food are cur­rently work­ing on this is­sue.

Con­fec­tionery Pro­duc­tion

To­day the ma­jor­ity of im­port sub­sti­tu­tion projects are im­ple­mented in the con­fec­tionary in­dus­try for a rea­son. Be­larus’ im­port of con­fec­tionery has in­creased to 35-40% lately. At the same time, the anal­y­sis of con­fec­tionery im­port in­di­cates that 90% of im­ported goods are sim­i­lar to Be­laru­sian-made ones.

This is an un­healthy trend, ac­cord­ing to Chair­man of Bel­go­spishche­p­rom Con­cern Ivan Danchenko. Be­larus’ food in­dus­try can meet the de­mand for con­fec­tionery on the lo­cal mar­ket. How­ever, the ob­jec­tive is not to stop im­port com­pletely. For in­stance, it makes no eco­nomic sense for Be­larus to man­u­fac­ture chew­ing gum as the con­sump­tion of this prod­uct is rel­a­tively small. Lo­cal com­pa­nies are plan­ning to launch the pro­duc­tion of other pop­u­lar goods, namely fon­dant, sand­wich cook­ies, and even choco­late eggs, in the near fu­ture.

The con­fec­tionery in­dus­try has the po­ten­tial not only to re­duce im­port but also to be­come the ma­jor ex­porter. Be­laru­sian com­pa­nies pro­duce the ma­jor­ity of raw ma­te­ri­als, in­clud­ing sugar, milk, flour, oil and fat prod­ucts. They are build­ing new fa­cil­i­ties to make caramel syrup from corn. It is note­wor­thy that Be­laru­sian con­fec­tionery prod­ucts are very pop­u­lar in the CIS, East­ern Europe, and Asia be­cause of high qual­ity, ex­cel­lent taste, and nat­u­ral in­gre­di­ents.

In 2011 Be­laru­sian con­fec­tion­ers pro­duced 10,400 tonnes of im­port­sub­sti­tu­tion prod­ucts, 106.8% on 2010. A to­tal of Br183.3 bil­lion of in­vest­ment was put in the up­grade and tech­ni­cal re-equip­ment of na­tional con­fec­tionary fac­to­ries, new pro­duc­tion fa­cil­i­ties.

Krasny Mozyryanin launched a speed-up pro­duc­tion of marsh-mel­low and glaz­ing and packing lines, which helped the com­pany ex­pand its lineup and in­crease the an­nual out­put ca­pac­ity from 600 to 2,000 tonnes. Ac­cord­ing to head of the com­pany Lyubov Bobr, the in­stalled equip­ment worth nearly € 1.4 mil­lion is by right con­sid­ered unique. There are only three lines of the kind on the post-soviet ter­ri­tory – in Be­larus, Rus­sia and Ukraine.

The whole man­u­fac­tur­ing cy­cle of marsh-mel­low takes no longer than 30 min­utes. The prod­uct is of high qual­ity.

This is the sec­ond im­port­sub­sti­tu­tion project of Krasny Mozyryanin. The com­pany has ear­lier in­stalled a tech­no­log­i­cal line to pro­duce jelly mar­malade with the ca­pac­ity of 2.5 tonnes per shift. To­day the com­pany pro­duces jelly mar­malade and jelly sweets that cost 20-25% less than those made in Rus­sia and Ukraine.

The as­sort­ment of Mozyr con­fec­tion­ers in­cludes over 120 de­scrip­tions. Recipes of some items in­clud­ing en­riched marsh-mel­low and tof­fee for chil­dren have been de­vel­oped in co­op­er­a­tion with the NASB Re­search Cen­ter for Food. Krasny Mozyryanin sells into Rus­sia, Is­rael, the USA and other coun­tries.

Thanks to a new line to pro­duce dairy and fon­dant sweets, the Ivkon con­fec­tionary has con­sid­er­ably in­creased the out­put of sweets and de­vel­oped new sorts that have never been pro­duced in Be­larus be­fore, says Oleg Gluskin, the ex­ec­u­tive di­rec­tor of the com­pany. These are sweets with jelly and fon­dant fill­ing in dif­fer­ent forms and bright packing. Among them are Oira, Kon­fetis­simo, Goldi, and a se­ries of Ori­en­tal sweets Creamy Log.

The com­pany has also launched the pro­duc­tion of choco­late sets “Choco­late” and “Sweet En­cy­clo­pe­dia” as part of its im­port­sub­sti­tu­tion pro­gram. Gen­uinely French dessert Oranzhetki from Ivkon, thin cook­ies in a choco­late coat­ing with or­angeado, have gained great pop­u­lar­ity among con­sumers. Ear­lier such sweets have been avail­able only abroad: they are made mainly by hand.

When this large-scale up­grade project is com­pleted, the com­pany from Ivenets will be­come one of the most tech­ni­cally equipped con­fec­tionar­ies in Be­larus. By late 2012 the com­pany is ex­pected to dou­ble its out­put com­par­ing to 2010. The ef­fort will sat­u­rate the do­mes­tic mar­ket and in­crease the ex­port. Now Ivkon ex­ports nearly 70% of its pro­duce.

Be­larus-style Sur­prise

By 2015 the na­tional con­fec­tionery in­dus­try is ex­pected to in­stall 28 new pro­duc­tion lines. The move will in­crease the ca­pac­ity 1.5 times from 161,900 tonnes (in 2011) to 245,400 tonnes. The share of im­port-sub­sti­tu­tion prod­ucts will ex­ceed 30%.

This year’s plans in­clude the in­stal­la­tion of two new pro­duc­tion lines at the Kom­mu­narka con­fec­tionary to man­u­fac­ture waf­fle and so-called whisked sweets. The daily ca­pac­ity of the first one will make up six tonnes of waf­fle sweets with dif­fer­ent fill­ings such as Kras­naya Shapoc­hka. Ac­cord­ing to Deputy Di­rec­tor Gen­eral Ta­tiana Sa­gain­ova, to­day this is one of the most pop­u­lar prod­ucts of the com­pany. The pro­duc­tion line is to op­er­ate in a new build­ing of the fac­tory.

In spring Kom­mu­narka is ex­pected to launch the pro­duc­tion of whisked sweets. Spe­cial equip­ment and tech­nolo­gies have been bought for this pur­pose. The com­pany also plans to start the man­u­fac­ture of Be­laru­sian choco­late eggs. The man­u­fac­tur­ing tech­nol­ogy has been tested in the pro­duc­tion of choco­late Easter eggs. Now the is­sue is to se­lect a de­sign and toys for these pop­u­lar chil­dren’s prod­ucts.

The Spar­tak con­fec­tionary is also pre­par­ing sur­prises for peo­ple hav­ing a sweet tooth. This year the com­pany is set to sup­ply the mar­ket with many-layer sweets and candy sticks with dif­fer­ent fill­ings, in­clud­ing nougat, caramel and nuts. Ac­cord­ing to Spar­tak Di­rec­tor Gen­eral Olesya Sam­sonova, it will be a brand new prod­uct that will not yield to its im­port ana­logues in taste and price.

Spar­tak will also con­tinue the pro­duc­tion of its “best­sellers” –

candy sticks with choco­late and cream fill­ing. The com­pany be­lieves that di­ver­si­fi­ca­tion will help boost its ex­ports far be­yond its tra­di­tional Rus­sian mar­ket. In 2011 Spar­tak started to sell into the Czech Repub­lic, Italy and Ukraine.

The Slodych con­fec­tionary is mount­ing an Ital­ian au­to­mated line to pro­duce large-sized sugar cook­ies with dif­fer­ent fill­ings – raisins, popped rice, sesame seeds, choco­late drops. Krasny Pis­chevik in­tends to ac­quire equip­ment to man­u­fac­ture soft caramel and com­mis­sion new lines for pro­duc­ing pastille and mar­malade.

The Valzhan com­pany, which is part of Gorodeya Sugar Mill, started to man­u­fac­ture heat-re­sis­tant fruit fill­ings for con­fec­tionery and bak­ery in­dus­try. A pro­duc­tion fa­cil­ity in Nesvizh is rapidly ramp­ing up the pro­duc­tion of jams and jelly, in­clud­ing the ones in small pack­ag­ing for ho­tels.

There are plans to build two con­fec­tionery fac­to­ries un­der the im­port sub­sti­tu­tion pro­gram in Be­larus. One of them to be called Sweet Coun­try will be built in Vitebsk Oblast. Its in­vestors in­clude the well-known com­pany Vitba and the Vitebsk Oblast Ex­ec­u­tive Com­mit­tee. At first the new en­ter­prise will pro­duce 5,000 tonnes of con­fec­tionery an­nu­ally.

The sec­ond project is in the pipe­line. Search for in­vestors is un­der­way. One of the Pol­ish com­pa­nies has al­ready shown in­ter­est in the new project. Most likely the sec­ond con­fec­tionary will be lo­cated in Lo­goisk Dis­trict. Both com­pa­nies are ex­port-ori­ented.

Strictly Un­der Li­cense

En­ter­prises af­fil­i­ated with Bel­go­spishche­p­rom Con­cern have been work­ing to in­crease the pro­duc­tion of dis­tilled bev­er­ages. The first to be pro­duced lo­cally were co­gnacs from co­gnac spir­its brought from Moldova, Ar­me­nia, Ge­or­gia, and Azer­bai­jan. To­day the as­sort­ment in­cludes 33 items. Most co­gnacs are pro­duced from spir­its 5 years of age or older.

In 2011, Bel­go­spishche­p­rom Con­cern man­u­fac­tured 218,000 dec- aliters of brandy, which was sold solely on the do­mes­tic mar­ket. This year the pro­duc­tion of brandy will ex­pand 1.4 times.

A few years ago it was dif­fi­cult to imag­ine that Be­larus would man­u­fac­ture whiskey, an ex­otic drink on the lo­cal con­sumer mar­ket. Minsk Kristall was the first to start li­censed pro­duc­tion of Scotch whisky. The Minsk-based pro­ducer was fol­lowed by Gomel Dis­tillery. In 2011, they made 18,000 de­caliters and 2,300 de­caliters of whiskey re­spec­tively. This year Mali­novshchiz­nen­ski Dis­tillery Ak­vadiv will start to pro­duce the bev­er­age un­der the li­cense.

As part of the im­port sub­sti­tu­tion pro­gram, in 2011 Minsk Kristall launched the pro­duc­tion of rum. In H2 2012, the com­pany will be­gin pro­duc­ing te­quila, an­other “over­seas” bev­er­age. Minsk Kristall is plan­ning to sell 5,000 de­caliters of this strong agave bev­er­age on the do­mes­tic mar­ket.

All dis­til­leries strictly ad­here to the re­quire­ments of li­censed pro­duc­tion. First of all, they are thor­oughly tested for com­pli­ance with the qual­ity and safety re­quire­ments. All al­co­holic bev­er­age fac­to­ries ex­er­cise strin­gent in­com­ing con­trol of raw ma­te­ri­als and out­go­ing con­trol of fin­ished prod­ucts. No com­plaints have ever been filed re­gard­ing the qual­ity of bev­er­ages made by Be­laru­sian man­u­fac­tur­ers un­der li­cense.

Other im­port sub­sti­tu­tion pro­grams in other branches of the food-pro­cess­ing in­dus­try in­clude the projects to up­grade the vegetable oil re­fin­ing and de­odor­iza­tion sec­tion at the Bo­bruisk plant and to com­mis­sion the new oil shop with the ca­pac­ity of 140 tonnes per day at Gomel Oil-fat Plant. These projects will al­low the in­dus­try to cre­ate a “re­serve” of this im­por­tant prod­uct and re­duce de­pen­dence on im­ports and price risks.

Grodno To­bacco Fac­tory Ne­man will in­stall a new line to man­u­fac­ture Com­pact King Size cig­a­rettes. Mash­pishche­p­rod Fac­tory will com­plete mount­ing the equip­ment to pro­duce frozen potato prod­ucts.

As a re­sult of im­port-sub­sti­tu­tion projects, Bel­go­spishche­p­rom Con­cern en­ter­prises will con­sid­er­ably ex­pand the prod­uct range, in­crease the out­put, and man­u­fac­ture new orig­i­nal and tasty prod­ucts of high qual­ity that were not pro­duced in the coun­try be­fore.

Ex­ports of food prod­ucts la­beled “Made in Be­larus” will in­crease sig­nif­i­cantly. By the way, the over­all ben­e­fits of the im­port sub­sti­tu­tion projects are es­ti­mated at $2 bil­lion in 2011-2015. This is com­pa­ra­ble with the amount of Be­larus’ food ex­ports in 2010.

In 2012 Spar­tak will di­ver­sify the range of ex­clu­sive con­fec­tionery by launch­ing the pro­duc­tion of mul­ti­layer can­dies and candy bars filled with nougat, caramel, and nuts

A fruit pro­cess­ing

shop has been opened at Gorodeya

Sugar Re­fin­ery. It pro­duces jams, mar­malades, and fill­ings for con­fec­tionery prod­ucts and bread

Over 140 items of con­fec­tionery are man­u­fac­tured by Vitba Con­fec­tionery in Vitebsk. Its pro­duce is ex­ported to Rus­sia, Ukraine, Latvia, Kaza­khstan, and other coun­tries

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