Ukrainian flour to enter the market of Indonesia

APK-Inform

In these latter days, participants of Ukrainian market of wheat flour often declare about difficulties of work on the domestic market, about periodically emerging problems with exports of the product. At the same time, journalists of АPК-Inform Agency made sure that the situation is rather better during the interview with Valeriy Belonogin, the director of "Bakery products complex "Talnoye" Ltd., who shared with achievements and plans of development of the enterprise.

"Bakery products complex "Talnoye" Ltd. is one of the largest processing enterprises in Ukraine, has become famous for own products since 1988. The main activities of the complex include production of top grade flour, 1-, 2-grade flours from wheat, and wheat bran in pellets, storing and shipment of agricultural products. The enterprise is one of the leading Ukrainian exporters of wheat flour.

- Valeriy Viktorovich, how can You estimate the work of Your enterprise during recent several years?

- During recent years, and especially last marketing year, the work of the enterprise improved greatly. We increased grain processing volumes, widened the range of produced commodities. Besides, we managed to provide our products on the foreign market, and we permanently expand the geography of export trading.

- But, as far as I know, recently the enterprise has been on the verge of literately extinction…

- Yes, that's it. But to date, we faced the essential growth of production and economic rates compared to the previous seasons. Investors brought own financial resources to the development of the enterprise, the complex started growing. We have very selfless crew at the enterprise. People did not lose hope that the complex will start working at high rates. Thus, to date, the enterprise has become activated at full capacity, and we plan to develop our facilities in future.

- Who is the main buyer of wheat flour on the domestic market to date?

- Producers of bakery products, macaroni plants, private entrepreneurs, large-scale confectionery complexes are the main consumers of flour milling products on the domestic market. In total, we sell nearly 40% of produced flour on Ukrainian market.

- Rather often market participants inform to experts of APK-Inform Agency about belated payment for already supplied products. Did You face such problems?

- The enterprise does not feel any serious problems with payment on the domestic market. We try to cooperate with the companies, which discharge faithfully own payment commitments. Our partners mainly cooperate with us for many years, and had time to approve themselves from the best part. Though, as many other companies of Ukraine, we sometimes face dishonest buyers.

- To date, Ukrainian domestic market has the problem of oversupply of flour milling products, which affects sale rates and volumes. Did such difficulties touch Your enterprise?

- Of course, the general flour milling market of Ukraine feels the presence of the problem of oversupply output finished goods. As a reminder, the USSR founded grain processing enterprises in main grain sowing regions, such as the territory of Ukraine and Kazakhstan. To date, many flour milling enterprises still continue operating on the market.

Another serious problem is the presence of rather high number of mini flour mills, which usually produce low-quality flour, with rather low price compared to the average market price.

At the same time, our enterprise is able to afford worrying concerning flour sales on the domestic market, because we have our constant buyers of flour in Ukraine, and the majority of our commodities is exported.

Trading rates also depend on flour quality. If an enterprise have high qualitative indices, corresponding to all qualitative requirements, if an enterprise approve oneself as rather reliable partner, such producers will avoid all problems concerning overstocking of storage facilities. For example, our enterprise did not experience such problems. In the nearest future, we plan to increase our production facilities and optimize technical equipment of our enterprise.

- How did the world financial crisis affect the activities of Your enterprise?

- The financial crisis almost did not touch the agricultural industry. From the beginning of the crisis period, incomes in grain and flour milling industries did not fall considerably as opposed to metallurgical and coal industries. Bakery products in Ukraine always were one of the main foodstuffs. In the crisis period, we even managed to launch additional grain processing capacities.

- You mentioned that Your enterprise is mainly oriented on export trading. How did You come to the decision to enter foreign markets?

- We took the decision to export our products due to opportunities to increase total incomes and profitability of the enterprise. Besides, Ukrainian market is rather inert, and the number of offers greatly exceed the rate of demand. In our country, buyers also prefer purchasing cheap products, not qualitative ones. Our enterprise does not produce low-quality flour, and con not form low prices for the product.

- What countries are the main consumers of Your flour?

- When we only started export trading, mainly the CIS countries were interested in our flour (Azerbaijan, Georgia, Moldova, Uzbekistan). Then countries of the South-East Asia started interesting in purchasing of the product - the Philippines and Malaysia, then the export geography in the region widened (Thailand, Vietnam, United Arab Emirates).

To date, Kenya and Madagascar are also interested in supplies of the product despite rather high distances to the countries.

The EU countries also estimate the quality of Ukrainian flour, however, the markets experience very high level of import duties. European countries support own production.

- Recently, Your company successfully completed the project of preparation and SNI audit passing for the product shipment to Indonesia and other countries of the Asian region. Would You add more details concerning the project…

- It is very difficult to receive the international certificate of SNI. The authorities in Indonesia carefully choose enterprises for the certification, and we had to spend many efforts to get the show on the road. We had additional difficulties in the work synchronization according to the qualitative certificate ISO 22000 in SNI requirements.

However, after the receiving of the certificate our enterprise will get the possibility the ship top grade flour to Indonesia (previously we sold 1-grade flour there).

- Would You tell us about the plans of Your enterprise…

- The main tasks of our company include the modernization of production facilities, improvement of technical base of the enterprise. We plan to organize the meeting with representatives of the company Bulher for negotiation concerning reequipment of our enterprise, equipping with modern technologies of grain processing. The optimization of the existing technologies, and even the reduction of the number of production machines are the main task of our company. We plan to reduce power-intensity of engines, install modern granulation lines, humification systems, lines of grain quality analyzing.

- How can You estimate the future development of the grain industry in Ukraine?

- It is obvious, that the grain industry is rather prospective. In the nearest year, the industry will continue developing rather actively. Ukraine has many foreign investments,many European companies operate at the territory of the country, they are ready to invest to the agricultural business. I think, that the agricultural business will stay rather attractive for both Ukrainian and foreign investors.

Interviewed Olga Pryadko