We are not interested to do business, guided only by figures and market shares - EFKO
In the recent few years the fat-and-oil industry of Russia has significantly improved its positions by increasing the general production and the processing capacities increase, so as the veg oils production and exports. Note the main position on the market is being taken by EFKO company – one of the largest sun seed processors in Russia and the top-producer and exporter of fat-and-oil commodities. Thus the General Director of EFKO company – Eugeniy Lyashenko would tell us about the current activity of the company and share the plans for future activity.
EFKO Group is Russia's largest vertically integrated company producing specialised fats used in confectionery, baking, and other sectors of food industry. The Company is also a leader on the Russian mayonnaise and vegetable oil markets, with well-established brands like Sloboda and Altero. Our integrated business model enables us to perform the full production cycle, from the procurement of raw materials to the marketing of ready products.
- EFKO Company is the largest fat-and-oil commodities processor on the Russian market and takes the TOP positions on veg oils production and exports. Please tell what was season-2012/13 for your company and what successes did you reach?
Season was rather hard because the veg oils and seed prices correlation was unfavorable for processors. It is clear a lot of companies have had losses in the previous season. Note even our company has earned the small profit. But in the current season the company has improved its positions on the market and has taken the second line in TOP exporters of sun oil.
- Considering the large experience of your company activity on the oilseed market please tell what are the key moments of the Russian fat-and-oil industry development have been the recent few years and what is it condition to date?
In the recent five years Russia has increased the oilseeds production. In 2009 the country harvested 6.5 mln tonnes of sun seed, 946 thsd tonnes of soybean and 667 thsd tonnes of rapeseed. This year the stated rate to total for sunflower 10.3 mln tonnes which is the record for all the times of Russia. At the same time the soy and rapeseed crops to total 1.5 and 1.4 mln tonnes correspondingly. The stated trend was formed owing the yield increase and the planted areas widening.
Besides in the recent few years Russia has increased the oilseeds processing capacities: in 2008 the stated rate totaled nearly 9-10 mln tonnes, and by 2012 – 13-14 mln tonnes.
The other key moment is the export potential increase. In 2008/09 MY Russia exported nearly 660 thsd tonnes of crude sun oil, and in 2012/13 MY – 802 thsd tonnes.
As for the other part of fat-and-oil industry – the industrial use fats, the main trend for them was the import decrease: in 2008-2012 the share of imported commodities decreased to 11% as opposed to 24%.
- In 2013/14 MY Russia to harvest the record crop of sunflower. What is your estimation of it? How did the weather conditions impact on the rate formation?
Thus owing the favorable weather conditions during the growing stage and ripening of sun seed we forecast the oilseed crop at the level of 10.3 mln tonnes. But still rainy autumn has negatively impacted on the raw-material quality. Due to the moisture exceed there is the acid value rise.
- Since the beginning of 2013/14 MY has little time passed, but can you please specify the features of the current season. What will be the price situation on the sun seed and oil market in 2013/14 MY? What factors to impact on the prices formation?
Despite the record crop the prices remain high. The November and December price correlation for oil and seed and also high prices for meal allowed the processors to reach almost the normal level of profitability – 7-8%.
But in the second half of December there has been veg oils prices decrease which may cause the modern plants profitability decrease, meanwhile the old ones to bear losses causing the further seeds' demand lowering.
To date the oilseeds prices are under the pressure of the record soybean crop in Southern Hemisphere. So the current world prices and impacts on the oilseed market of the Russian Federation.
- What is your opinion on the Russian transport infrastructure condition, are there any problems with logistics while veg oil transporting on the domestic market and abroad?
According to our estimation the current infrastructure in the Russian Federation is able to provide logistics. But note the bulk cargoes capacities on the Black Sea have significantly increased owing the putting into operation Marine terminal Taman LLC.
- In order to finish our conversation please share the company's plans for nearest future, and what does your company aim to reach in the current MY?
In the beginning of 2014 we plan to put into operation the new plant on soybean processing wit the capacity of 2 thsd tonnes per day which will let to provide the growing demand on fodder by the meat industry. The plant to be placed in Alekseevka.
Besides there is great potential of the fat-and-oil commodities market in the Russian Federation.
Interviewed by Svetlana Gnoevec
You should be authorized to post comment