The company said that 70% of sales in the Russian confectionery fats market came from sweets, 25% from waffles and 2-5% from other sectors.
Russian market development
“Generally, the market has been already formed, so we’re able to say that the growth of these segments is uniform,” said Evgeny Lyashenko, CEO of EFKO Group.
“In the first half of 2014 customers’ demand for confectionery products in Russia has increased by 2% compared to the same period of 2013. Sales growth of EFKO Group for this period equals 10%,” he said.
“The company was able to achieve such results due to the sales development program with transnational corporations, capacities of which are based in Russia, as well as due to the increase of export sales.”
Companies grow capacity in Russia
There is a number of large confectioners present in Russia. In 2010, Mars opened a $107m factory in the Ulyanovsk region, while Ferrero started producing at a new $267m Russian factory in the Sobinsky Region at the turn of the decade.
In April, Mondelēz International also announced a $110 factory in Novosibirsk that will produce chocolate brands Milka, Picnic and Alpen Gold, as well as Jubilee, Barni and TUC biscuits. The plant will be operational in 2015.
Import substitution
Lyashenko said that EFKO anticipates growth in the confectionery sector through Russia’s import-substituting program.
The Russian government has proposed to find alternative sources for some imported goods after imposing trade sanctions on the Ukraine and the EU.
Changing regulations
Lyashenko added that regulations set to take effect from January 1 2015 will mean trans fats in oil and fat products should not exceed 20%.
“That’s why along with other producers we have been creating new recipes and expanding the range of fats we already offer.”
However, he said the majority of the company’s fats already met this requirement.