products & Ingredients №9 (95) October 2012
At the beginning of the new season "Products & ingredients "asked the industry association confectioners on the state of affairs, problems of the market and how these issues may affect the Ukrainian kondprome.
On this and many other things told us President of the Association "Ukrkondprom" Alexander Baldynyuk and Advisor to the President of the Association Yuri Kozhanov.
– What are the market trends sugar confectionery products in Ukraine today?
Alexander Baldınyuk: The last two years is a decrease in production of almost all groups of confectionery products.
There are several reasons: governance philosophy, which is an excessive tendency toward statism with the regulation of the economy, and through our industry in particular,. It is superimposed on the systemic corruption in the country and creates a difficult market environment for the development of any industry.
In the last couple of years, Ukraine has narrowed export markets for exports of confectionery products. Also on the level of sales and production adversely affected by reduced consumer purchasing power.
Due to the combination of these factors decreased the consumption of confectionery products expensive and mid-price category, They fall in sales of chocolate and cream products. Since they are not products of first importance in the food basket of Ukrainians, customer, possibly, He abandoned them in favor of cheaper-suharno Donuts, cookies and cakes. There has been a contraction of consumer demand and. Today we are significantly lagging behind Europe in per capita chocolate consumption population.
Due to the often ill-conceived public policy, or simply corruption, confectionery production have become cost more.
Yuri Kozhanov: Traditionally, exports greatly influences the production of confectionery industry. In this sense, the situation is alarming for the market: restrictions, imposed by Russia and Kazakhstan, It has a negative impact on the confectionery market.
Still decent demand pastries (and in Ukraine and abroad). Chocolate and sugar-containing products have dropped in sales, but the company leaders have not changed their position.
The volume of manufacture of confectionery products as of January-August this year amounted to 655 462 tonnes. It is almost 6 thousand. tons less, than in 2011 year. Volume production of flour confectionery products in the same period was 325 207 tonnes, saharystыh - 140124 tonnes, chocolate - 190 131 tonnes.
In general, all the vectors of development of the industry, we are dependent on the economic situation in the country and thoughtful policy of the state, aimed at supporting the national producer.
– As the market develops in the light of the above trends? What are the changes in terms of exports and imports kinds of confectionery products? Which market segments show growth, what a loss?
Alexander Baldınyuk: Among the leaders of exporting companies have not changed in the last two years: Three or four large companies are actually doing 60% export of confectionery country. In the structure of exports the first place for chocolate products - about 40,9%, the second - for mealy (34,5%) and the third - for sugar (24,6%) as of January-July 2012 of the year. According to the first and the third group have a slight increase, and powdery confectionaries slipped almost 4% compared to the same period 2011 of the year.
– Some of the major market players noted a sudden surge in the summer of confectionery sales. With what do you associate it?
Alexander Baldınyuk: In fact, this happened in the summer drop in sales. This is generally a seasonal trend, but this year the fall was deeper. Of course, u kogo-to, possibly, turned out to get a plus in the offseason due to successful marketing moves, or even for some reason, but in general the market sector slipped.
– The main objective of the Association, in an interview at the beginning of the year you were called to establish a dialogue with the authorities of the confectionery business and promotion of Ukrainian products in foreign markets (in particular in the EU). What is achieved in this regard since our December interview? What are the challenges for the Association added?
Alexander Baldınyuk: Our function - protecting products against negative influences from the outside, including from the state, if it impedes the development and consolidation of the industry. If we talk about the changes, we just added the problems from the beginning of the year.
So, NOW is preparing co echoed in BP reading the bill "On Amendments to the Law of Ukraine “On Customs Tariff of Ukraine” (to bring import duties to WTO criteria)», according to which the increase duties on more than a thousand commodity positions. For our industry it is mainly commodity groups of goods and equipment.
The bill plans to significantly increase the tariffs on imported goods, citing the alleged protection of domestic producers. In fact, it is more about filling the budget at the expense of, withdrawn from the sector at odds with the real interests of the producers.
After all, the bill raises tariffs on many commodities, which is simply not produced in Ukraine: tropical nuts, peanut, if-if, and most importantly - the imported equipment for kondproizvodstva. But low prices for imported raw materials - one of the reasons, why our confectionary products are well compete in the global market.
Besides, in recent 10 years, the industry has undergone full technical modernization (which continues today). On the majority of the country's large enterprises equipped with the latest equipment, which replace the Ukrainian market can not offer, in principle,. Due to increasing rates of tariffs for equipment grow advantages importers kondizdely, especially from the Russian Federation, which applies a zero rate of customs when importing foreign equipment. This would weaken the position of national producers on the domestic market.
Also, artificial rise in the cost of imported raw materials and equipment by increasing the tariffs will increase the total costs of enterprises and, respectively, the acceleration of inflationary processes.
– What therefore takes Association, producers?
Alexander Baldınyuk: We have repeatedly appealed to the authorities with a demand not to use such measures, We wrote letters. Ministry of Agricultural Policy and Economic Development, by the way, kondproma manufacturers supported the opinion of inappropriate tariff increases for raw materials and equipment. This issue was raised at UMB, FRU, at a meeting of the Verkhovna Rada Committee. The interests of manufacturers of sweets now and protects the Federation of Employers of Ukraine. It seems to be able to negotiate with the Verkhovna Rada Committee on Finance, banking activity, tax and customs policy, amending a bill to leave duty rate at the same level for some raw materials. But as long as the final position of power is unclear.
– What other problems in the industry?
Alexander Baldınyuk: Also remains the problem of chronic and protracted defaults State of export VAT. Confectionery in Ukraine export-oriented (more 35% of the total produced in the country is exported sweets), because this issue is very topical. The very philosophy of taxation is not conducive to the development of the industry.
As for the promotion of our products to the world markets, Our industry is one of the three sectors of the food, providing the highest positive balance of trade with foreign countries. 1 100 million. dollars - the annual amount of confectionery exports against 200 million. Doll. imports in value terms.
Yuri Kozhanov: add, that one of the components of the environment to promote our products to the EU have to harmonize the sector to EU regulatory requirements. With the support of the state, Most national standards harmonized with the European requirements.
This year the Association "Ukrkondprom", Institute of Postgraduate Education of the National University of Food Technologies in collaboration with the Technical Committee 152 "Confectionery Products & FOOD CONCENTRATE" is developing a new standard for chocolate.
As the market and its needs, technology, chocolate production itself changing very rapidly, The creation and approval of DSTU on chocolate is very serious. After all, any production need to be adjusted according to the requirements of time. Some basic standards, already developed by the Technical Committee of the number 152, past all the state examination and proofreading, by 3-4 year years lie, waiting for the approval of Ministry of Economic Development of Ukraine and publication.
A few days ago, the regular meeting of the Technical Committee number 152 for confectionery and food concentrates production, at which representatives of all the major countries kondproizvodstv discussed comments on the draft of the new standard. In fact, this normative document, which should lead Ukrainian chocolate production in line with European norms.
Among the main differences between the European standard: allowed the use of vegetable fats instead of cocoa butter (in volume 5% – fats, Cocoa butter equivalent). In our DSTU still remains a total ban on the use of vegetable fats in chocolate.
– Which countries are most readily buy our sweet products?
Alexander Baldınyuk: This is our traditional market - the CIS countries. Although, as you know, December in Ukraine there were problems with the market of Russia and Kazakhstan. Russian Federation last year decided to apply protective measures in respect of our caramel products. The fee for our product has increased from zero to 294,1 dollars per ton, and it is about 25% from the value of the product! Considering that, that caramel - a product of the low to medium price range, can say, that the Ukrainian caramel ousted from the market. Besides, these measures were extended to the markets of all member-states of the Customs Union.
Kazakhstan conducted its investigation in a much larger list of codes, including chocolate group and also introduced protective measures against Ukrainian products (before 49%). "Dislike" our confectionery products in Kazakhstan because, there it is very popular, It uses consumer demand and takes a leadership market share. In fact, such a decision - lobbying and protection of national interests of several Kazakhstan companies. While, that the economic justification for such measures was not, and the investigation itself was carried out with gross violations. Our Association has applied to the Ministry of Economic Development and Trade of Ukraine to conduct an investigation regarding the legality of actions of Kazakhstan and recognition of their actions hostile and discriminatory.
Interdepartmental Commission on International Trade under the Ministry of Economic Development of Ukraine has confirmed this fact and today the level of the two countries are negotiating a compromise out of the situation.
– Your predictions about the future of our "sweet market"?
Alexander Baldınyuk: certainly, negative trends in our industry will affect the adjacent sector. In particular - sugar, milling, starch. In the first place will be reduced sugar purchases, that goner could eventually lead to higher prices for sweet crude and the final confectionery product. Here, everything is logical: State increases the manufacturer's costs, and he has nowhere to go but to make them in the cost of the product.
October will - a vector of the elect government. but we, certainly, We hope for a wise and informed decision.
Elena Bochkovskaya
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