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