IDM ¦ Markets
"This is because the Russian dairy industry is undergoing profound
changes related to both the decrease in real incomes of
the population and the consequences of the Covid-19 pandemic,"
Petrova said.
Russia imports 38% of milk powder and 21% of milk whey.
Import-dependence in these segments is believed to be the highest
in the entire Russian dairy market. To achieve self-sufficiency
on these products, at least four processing plants must be built
with an overall investment value of 32 billion rubles ($450 million).
More importantly, milk, whey, and powder will offer bright export
prospects in the future.
"Although the Russian dairy market is considered to be conservative,
changes occur every day, even if they are not noticeable
at first glance. In the near future, they will lead to a significant redistribution
of market shares. As small and medium-sized processors
find it increasingly difficult to compete with the leaders, they
will be forced to change their product range from a classical line to
niche dairy products," Petrova said.
One of the first projects in the field of advanced milk processing
has already been rolled out by RM-Agro. The company harbors
plans to build a plant to process 2,000 tonnes of milk per annum
to obtain micellar casein, whey proteins, isotonic concentrates,
lactose, and dry cream. As explained by Artem Belov, 80% of the
world trade in the dairy industry accounts for dry dairy products,
but in Russia, this segment remains significantly underinvested.
24 · January/February 2022 ¦ international-dairy.com
By allocating some additional state aid to investors willing to
pump money into advanced dairy processing, the Russian government
could secure the inflow of investments worth 50 billion rubles
($800 million) in this segment in the next few years, Belov
estimated.
Advanced milk processing is believed to be among the factors
promising to push the Russian dairy export up in the coming
years. In 2020, Russia exported 872,000 tonnes of dairy products
for $361 million. In physical terms, export climbed by 24%, compared
to the previous year, the Russian Federal Customs Service
estimated. So far, Russia exports primarily cheese, sour cream, and
some fermented products to the CIS countries. Milk powder and
whey open bigger export opportunities in the Middle East and
Asia, market participants are confident.
Old habits die hard
Some dairy products in Russia are predicted to die out gradually.
The main outsiders are so-called cheese-like products – those not
containing milk fat. Before the pandemic, the demand in the segment
had been seen falling, but tides changed in 2020, when their
production increased by 9%, reaching 190,000 tonnes.
Belov explained that the resumption of growth in this segment
was associated with a drop in the Russian population's purchasing
power. A similar opinion was expressed by Anatoly Losev, CEO of
Molvest, who admitted that Russians switch to cheese-like products
at times when they have to increasingly spare money on food.
Russian dairy companies have to adjust their
product range due to new trends
/international-dairy.com
