Pava has announced plans to widen its sales overseas into countries in Asia and Africa after boasting of successfully boosting sales abroad last year by 77.5 per cent.
It said that “high-margin exporting” was a priority business and it will focus its efforts on countries where the traditional food ration includes wheat flour and wheat-based goods.
The company believes there is strong growth potential for exporting to these regions and is particularly looking to cooperate with large traders that already have large networks abroad, which it believes “increases chances to venture into new markets”.
Angela Kiseleva, Pava commercial director, said that talks with UAE, Guinea, Benin and South-African Republic were already underway.
She added: “The company is constantly on the lookout for large-scale tenders.”
The announcement is the latest move by the firm to gradually transform itself from a major grain processing company in Russia into a leading vertically integrated agro-industrial holding company.
It is also another step towards protecting itself from world market fluctuations by achieving full control of its wheat processing chain, from growing its own wheat supply, through to milling and fractionation.
This is expected to be boosted by its new grain fractionation plant in Altay Territory, which will provide wheat gluten, starches and alcohols to both Russian and international markets and is scheduled to be operational in 2010.
Kiseleva said: “We maintain stable relations with 13 countries shipping flour not only commercially, but also as humanitarian aid.
“However, in view of the global economic turmoil our policy definitely seeks to diversify the client base.”
Partnerships
It already collaborates with companies in Thailand, Afghanistan, Tajikistan, Kenya and Ethiopia, among others.
And as part of its plan to develop its export business, the company signed a contract with Lebanon earlier this year for a shipment of protein-rich flour for bread production.
The flour, called Zhitnitsa, is made using a special processing method that preserves the nutrients in the flour.
The company said it was singled out by an unnamed large trader looking for opportunities to replace soya flour, which is more commonly used by Lebanon bakers, or incorporate Zhitnitsa in a blend.
It said there has also been interest for Zhitnitsa in Iran.
Price competitive
Pava claims it can offer competitive prices to Asian and African markets and said it is willing to adjust the quality parameters of its products to suit local tastes.
It said in a statement: “The scope of activities, enhanced cost controls and transition to a vertically integrated production chain will contribute to maintaining a good price/quality ratio.”
In 2007 the company’s International Business Department was expanded and re-organized into Pava Export Ltd – a separate structural unit – which it said allows it to co-ordinate effective logistics and pricing.