Information for fruit and vegetables business in CIS
Ukrainian canned vegetable market increases volumes
Out of total canned corn delivery volumes into Ukraine, 96% of produce is supplied by Hungary, and 4% by Thailand and Russia. Hungary is also a major supplier of canned beans and peas into Ukraine. Import shares of Hungarian canned beans and peas amount to 92,1% and 97% respectively.
Market is covered at only 60%. “Nowadays, canned produce market of Ukraine is very promising and has enough great potential”, - Tatyana Tkachuk, Head of Analytics Department of “Sinergiya”, notes.
According to T. Tkachuk, canned peas, corn and beans are the only produce facing unchanging demand at canned fruit and vegetable market. “In the following years, growth of demand for these products will remain, notwithstanding some decrease in production volumes of some market participants”, - the expert thinks.
However, for the present, Ukrainian producers do not manage to win over Hungary at the market. This is a result of insufficient development of domestic production capacities. Besides this, Ukraine faces lack of education system of fruit and vegetable sector personnel, and shortage of required tare. Some enterprises try to solve this problem by organization of their own tin-and-jar production.
Canned vegetable market participants traditionally have high needs in circulating assets, as process of their turnover is prolonged in time: within the season of June through September, companies invest money in production, then within a year, they sell their production output. Since the beginning of 2009, producers have faced financial troubles as a result of decrease in sales of their produce, as well as of problems with obtaining credits. According to canned vegetable producers, small enterprises face more troubles, than large companies.
However, as to market operators' expectations and analysts' forecasts, domestic canned produce market expects further stabilization and decrease of import produce share. Nowadays, most of those suppliers that placed orders in Vietnam or India search for partners in Ukraine. Canned peas and corn will remain the most products in demand. Further growth of consumption in this category is directly depended on improvement of economy situation in the country and wealthiness of citizens. According to operators' estimations, growth rates will be modest and accounted to 3-8%. “But this is inevitable due to further urbanization of population”, - T. Tkachuk notes.
Currently, domestic producers already increase capacities and strengthen their positions at the market. So, till 2011, the company “Bonduelle” plans to construct canned vegetable production plant in Ukraine. Investments into the project amount to EUR 40 mln. The company is about to equip the plant with sweet corn and green peas canning, and vegetable freezing lines.
The company “Chumak” plans expansion of production too. The producer is about to purchase a canning plant in Cherkaska region.
“Smart-holding” intends to keep on active development of agrarian direction within framework of the group of companies “Veres”, one of the major producers of canned foods and sauces.
Process of new canned foods brands development became more active. According to market operators' forecasts, after few years, there will be practically no unbranded products at the market.
As to experts, annually, Ukrainian companies significantly increase advertising support of their produce. Producers mainly invest funds for advertising into holding various BTL-promotions directly in sale places. According to players' estimations, such kind of promotions is the most effective. When designing of commercials, market operators mostly stress attention at healthiness and naturalness of canned foods just under their trademark.