After posting disappointing financial results for the third-quarter earlier this week, Danish ingredients company Danisco announced on Wednesday that business is booming in Russia.
The company reports that only six or seven years after Danisco established its own sales office in Moscow, annual sales of food ingredients have reached three-digit million figures in DKK terms. And sales are increasing by 20 to 25 per cent a year.
The Moscow sales office and the Russian sales force report to Danisco in Brabrand and Frederik Gejl-Hansen, president, Eurow. On the back of strong growth in Kazakhstan, Gejl-Hansen holds great expectations for the coming years - not only in Russia, but in several states within the Caucasus region.
"Russia is a rich country and with a population of 140 million it holds huge potential. In his time as prime minister, Putin has generated stability and a sense of optimism in the Russian people and the Russian industry, which is vital to generate growth and increased welfare," he said.
According to Danisco, "progress" in Russia has led to an increasing number of imported ingredients on the Russian market. In order to be able to compete with these ingredients, the Russian food industry has had to produce ingredients of similar quality. The company adds that because many food manufacturers have never used food ingredients, Danisco has a challenge on its hands to inform businesses about how to use the ingredients. A close dialogue between Danisco and Russian consumers will clearly play a major contributory factor to Danisco's success or failure.
According to the company, Russian consumers represent a broad section of the food industry: dairy products, bread and cakes, meat products, beverages, chocolate and confectionery, margarine, ice cream, mayonnaise and dressings.
The food ingredients sold by Danisco in Russia are, among others, flavours, emulsifiers, starter cultures, enzymes, pectin, carrageenan and sweeteners, as well as the functional systems (typically integrated blends of emulsifiers and thickeners). These ingredients are produced at Danisco production plants in Mexico, the Czech Republic, Germany, Sweden, Finland and Denmark, where production takes place in Grindsted and Haderslev and development in Brabrand.
"We deliver food ingredients from the corporate production sites that are able to do the most efficient job, but who knows, in time we might establish a Danisco production site in Russia, seeing the potential that exists over there," said Frederik Gejl-Hansen.