The Russian dairy market has seen phenomenal growth in recent years, driven largely by the development of Wimm-Bill-Dann and other western dairy companies. France-based dairy equpment supplier Erca-Formseal shares its experiences dealing with the sector there, resting future hopes on the strength of the economy.
Alan Soussokho is currently area sales manager for France-based Ecra-Formseal. With the rise and rise of the Eastern European dairy industry he has spent a significant amount of time years doing business in the region over the past few years.
The company's business dealings with WBD recently culminated in a major contract to upgrade equipment at the WBD dairy plant in Kharkov, Ukraine. Wimm-Bill-Dann installed an ERCA-47001 for the filling and packaging of cheese desserts. The $6.1 million line has a production capacity of three tons of finished products per hour and fills 125g and 200g tubs.
"We have now been doing business in Russia for 15 years. During this time it has been Wimm-Bill-Dann that has been the driving force behind growth in the supply of dairy equipment, closely followed by other major western European companies such as Campino and Danone, which have also established themselves there," said Soussokho.
"WBD's objective has been to buy up old dairy plants and modernise them, a formula that has proved to be highly successful. It has proved to be a work-in-progress which has helped towards the modernization of the sector as a whole."Soussokho went on to explain how in the past the dairy sector had been extremely antiquated, but he stressed that great leaps forward have been made in recent years. Now many of the larger plants are just as modern as their western European counterparts.
"You will still find Russian dairy plants with old equipment, but this is becoming increasingly rare," he said. "Doing business in Russia is the same as any other Eastern European region now. The same problems come up and on top of that you have to take into account cultural differences, too."
"Form filling machines and pattern machines have proved to be popular with Russian dairy company, following the trends set by western dairy companies some years ago. This reflects the increasing demands for a wide variety of dairy-based goods, especially desserts."
The growth of the dairy industry in Russia over the past few years has largely reflected the strength of the economy. However, whether or not that momentum can be maintained remains to be seen, as Sousskho stressed.
"For our company Russia has been a very strong market for the past three or four years. Things gradually picked following the economic collapse in 1998, but with the strongest growth behind us, it is clear that the economy is starting to slow up. We do have a number of major projects in the pipeline, but whether or not we can maintain the same level of business in the future will entirely depend on the state of the economy."