Russian Agribusiness Survey
SOLUTIONS
PROBLEMS
STAGE
7.3 Problems and solutions by stages of the vegetable oil value chain Production of oil seeds • Growing and harvesting of • Sunflower • Rape • Flax • Storage of oil seeds
Extraction of vegetable oil • Unpacked oil • Further processing • Industrial use • Bottling for direct consumption by the population • By-products • Extraction cake
Processing of oil • Margarine • Industrial use • Direct consumption by the population • Mayonnaise • Direct consumption by the population
1. Limited sown areas (exhausted soil) 2. Low yield of oil seeds 3. Inefficient use of resources; losses; obsolete equipment for growing and harvesting 4. Limited use of fertilizers 5. Decreasing quality of oil seeds 6. Inefficient storage of oil seeds
1. 2. 3. 4.
1. Obsolete equipment and technologies 2. Low volume of specialized margarines production 3. Lack of funds 4. Poor professional skills of staff and management
1. • • • 2. 3.
1. Financing of investments in new technologies of oil 1. Financing of the investments in new technologies 2. Leasing of equipment for oil processing extraction 2. Leasing of equipment for processing of oil seeds 3. Development of new margarine products and 3. Personnel training recipes 4. Personnel training
Introduction of the high-yield varieties Test of different varieties Import of high-yield varieties Improvement of selection of varieties Personnel training Introduction of high efficiency cultivation and harvesting 4. Reduction of losses 5. Financial support - crediting
Obsolete equipment and technologies Insufficient capacities for refined oil production Lack of funds Poor professional skills of staff and management
Market of bottled vegetable oil (rise 12-14% annually): domestic products - 40% of the market, imported - 60%; rise of prices and demand. Market of mayonnaise (rise 18% annually). Domestic products – 94% of the market, imported – 6%; rise of prices and demand. Market of margarine (rise 6% annually). Domestic products – 71% of the market, imported – 29%; rises of prices and demand. 1. 2. 3.
1.
2.
3. 4.
Large volume of imported products (in the market of bottled vegetable oil and margarine) Weak brand promotion and advertising Strong price competition
Improvement and enlargement of the distribution and retail network of producers of vegetable oil and fat products Improvement of the work of marketing departments; active advertising and brand promotion Integration with retail traders Improvement of the storing facilities of retail traders
Note: Distribution is not included in the above table, as there are no serious problems in the distribution that require investment support.
52 Peja International B.V.