EU accession : A driving force of change
some 17 million litas (€4.9m) in a new plant to be located in
Vilnius, according to a report in the Baltic Business Weekly. It
would appear that the prospect if EU integration is acting as a
catalyst in the modernisation of Eastern Europe's food processing
industry.
"The plant has been built. We expect to complete all installation work and launch the facility before [Lithuania's] entry into the European Union," said Arnoldas Vysniauskas, CEO of Vilniaus Mesa.
He added that a host of Polish and Nordic companies have already shown interest in Vilniaus Mesa's products, a factor that the company hopes will fuel its plans for further expansion once the new plant is up and running. The company says that construction has already started and that the plant is due to go into production in May next year.
Integration with the European Union (EU) and its effects on the food processing industry is a big issue. Accession requires Eastern European food processing industries to conform to EU quality, technological, sanitary and environmental standards. These requirements are leading to higher levels of investment in the industry in general and in state of the art food processing equipment and technologies.
The new plant will aim to produce about 50 tons of meat products daily and is hoping to achieve sales in the region of 41 million litas in 2004. Vysniauskas added that the new plant is being opened with a view to obtaining permission for exports to the European Union and expanding the company's sales into the 25 Member States.
The company received around 5 million litas in EU from the SAPARD programme to fund the project, while the rest of financing was provided by the company. The firm is now owned by Finland's largest meat processor, Atria, having been bought out last August.
This year the company is targeting sales of about 36 million litas for the full year 2003, having posted a loss of 2.165 million litas on sales of 29.02 million litas for 2002.
Despite this slight dip, Vilniaus Mesa's ambitious new project illustrates how much Eastern Europe has become a dynamic market for the food processing industry. Investment in the Eastern European market have tended to concentrate on the modernisation and replacement of production assets.
There is also growing competition from food products produced in Western Europe. This has forced domestic producers to increase the quality of their products. The agrifood sector of Central and Eastern Europe entered the post-communist era with obsolete production and processing technology. But immense progress has been made, and Vilniaus Mesa is confident that the new plant will set new food production standards in the region.
