Raisio looks to Russia

- Last updated on GMT

Related tags: Russia, Moscow

Raisio has opened up its first production facility in Russia.
Located just outside Moscow, the Finland-based company says it is
hoping that the move will help it to expand its margarine portfolio
in Russia and neighbouring states.

Situated in Istra, about 60 km from Moscow, the facility started production of the Voimix and Dolina Skandi bran margarines at the end of last week. The production facilities were transferred over from an existing plant in Sweden and are staffed by 60 people.

"Total investment in the project has come in at around €3 million,"​ said Kari Körkkö, director of Raisio's International Operations. "We closed the facility in Sweden because, alongside our plans to increase our market presence in the Russian margarine sector, it was looking economically unviable to continue to export."

Raisio has been present in the Russian European sector for around 10 years now. Although the sector - which currently produces around 400 million kilos a year - is a relatively stagnant market, Raisio believes that it can grow its share of the market by increasing the reach of its product portfolio.

"Currently Raisio products account for around 10 per cent of the total margarine market in Russia,"​ said Körkkö. "However we are not yet present in certain segments of the market, such as low-grade margarines used, for example, in for bakery purposes. Currently our production volumes are at 15 to 18 million kilos a year, but within the next two years we are hoping to increase that figure to as much as 30 million kilos."

The company added that with a minimal investment in the new production facilities, it would be able to treble production at the Istra facility in a very short space of time.

On a regional level, Raisio also has a significant presence in the Polish market, where it has been present since 1995 and now has a dedicated production facility.

"We are hoping that the our new Russian facility will also help to serve the neighbouring markets - in particularly that of Ukraine where there are particular benefits to be had from tax-free trade,"​ Körkkö added.

As in western Europe the overall market for margarine has not shown significant growth in recent years. Manufacturers such as Raisio will be hoping to scrape back sales from the still growing butter sector, which produces around 750 million tons each year. Growth in that sector is currently derived from the market for butter and oil blended products.

Related topics: Processing & Packaging

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