Mixed fortunes for Russian flour sector
through mixed fortunes, with many companies struggling to compete
while others are performing well, writes Angela Drujinina.
The survey, carried out by the Moscow-based consultancy Market Advice, questioned the 50 leading flour millers in Russia, including the EKaterinburg flour milling plant, Dalnaya Melnitsa, St Petersburg flour milling plant and Nijnii Novgorod flour milling plant.
The majority of respondents said that their customers preferred to buy flour produced according to Russian state standards, suggesting a high level of confidence in the quality of flour thus obtained. However, a quarter of those questioned said that their industrial customers preferred to buy flour made to specific technical standards for further refining or processing.
These industrial customers are also interested in verifying the gluten content, the granule size and the whiteness of the flour, while others gave particular importance to price.
Most of the companies questioned by Market Advice said that they had worked continuously throughout 2004, suggesting a flour sector in good health, although some companies flagged up periods of 'down time' caused by a downturn in sales - suggesting that the good times are not being shared by everyone.
The Russian grain market is going through a period of consolidation, but the survey showed that not every flour miller is happy about forging closer ties with other companies in the chain, in particular grain processors. Some millers said that their partnerships with grain producers had been unsuccessful, while others said that such partnerships were vital because it was impossible for them to survive on their own.
Tough as domestic competition may be at times, the flour millers questioned by Market Advice are not yet concerned about rising competition from foreign players, with just a handful of non-Russian companies operating there, and focusing on the premium end of the market.
