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Rodion Rybchinsky, Union “Millers of Ukraine”: “We’re Completely Open for Cooperation”

08 March 20176 min reading

“During 5 recent years Ukraine continued actively investing funds in construction of new flour milling and groats companies, and modernization of the existing companies. The market developed in such way, due to the fact that Ukrainian flour and groats production started actively conquering foreign markets.”

ukrayna_rodinrybchinskyIn this issue, Miller Magazine interviewed Rodion Rybchinsky, the President of The Union “Millers of Ukraine”. Poducing nearly 3.5 million tonnes of flour per year, Ukraine produces excellent wheat growing on black earth soils which are the best in the world. The Union “Millers of Ukraine” also represents 18 legal entities, which cover the interests of 28 companies such as flour mills, groats mills, mixed feed plants, enterprises producing bread, pasta and fancy confectionary products, semi-finished flour foods.

Expecting that in the medium term Ukraine will reduce the number of flour milling enterprises, Rybchinsky also expects the share of export-oriented companies will somewhat increase. With Rodion Rybchinsky, we talked about the Ukrainian flour milling industry, the union’s activities and targets in the industry. We take the details from Rodion Rybchinsky…

Dear Rodion Rybchinsky, firstly could you please give us some information about The Union “Millers of Ukraine”? How many members do you have and what are your activities as an association in the industry? The Union “Millers of Ukraine” includes 18 legal entities, which cover the interests of 28 companies. In particular, various types of such companies’ members in the association structure includes flour milling plants with daily capacities at 100-700 tonnes, groats mills, mixed feed plants, enterprises producing bread, pasta and fancy confectionary products, flour semi-finished foods, etc. The share of companies’ members in general flour production in Ukraine totals nearly 50 percent and the export shipments of flour is more than 45 percent. The major tasks of the association are rather common. They are completely specified in the charter of the organization:

• Establishing and promoting to enhancing of cooperation between enterprises, government agencies and other industry associations; • Mutual assistance and support between enterprises of the industry; • Impact on formation of the state economic policy at the grain processing industry; • Advance training and raising the educational level of specialists of the association members; • Organization of legal and social safety of the members of the Union

Could you please give us some information about Ukrainian flour milling industry? What can you say about the number of the mills, milling capacities, technology usage level, and manufactured product groups? Ukraine produces nearly 3.5 million tonnes of flour per year. At the same time, the share of industrial enterprises covers nearly 2.2 million tonnes of the reporting production volumes. Therefore, small-scale milling plants produce the remaining volumes with daily processing capacities at below 50 tonnes. The raw number of industrial companies in Ukraine totals almost 400. But they really have very different level of work load. There are companies which work with the load of 95 percent of their capacities, and there are some companies that have loading at 35 percent. Basically, if all industrial milling enterprises of Ukraine managed to work at full capacity, they would produce nearly 5 million tonnes of flour.

Top-grade, 1st and 2nd grade flour form nearly 95 percent of all flour types produced in Ukraine. Rye flour covers another 4 percent, and corn, buckwheat, oats, rice flour types and others total the remaining 1 percent.

Over 90 percent of Ukrainian flour mills are equipped with technical equipment manufactured in 1980-1990 period. And nearly 10 percent of flour mills have technical equipment of the last decade with modern machinery of Turkish, Swiss, Czech and Italian origin.

How is the approach of the milling companies towards the new technologies? Is there any increase in the recent milling and technology investments? Yes, during 5 recent years the country continued actively investing funds in construction of new flour milling and groats companies, and modernization of the existing companies. The market developed in such way, due to the fact that in the reporting period, Ukrainian flour and groats production started actively conquering foreign markets. Therefore, Ukrainian products have to demonstrate high-quality parameters and low cost price.

Do all of the mills in Ukraine realize their production completely for the domestic consumption? Are there any export activities of the mills in your country? If there are, which countries are the export targets and what is the amount of these exports? In 2016 calendar year, Ukraine exported over 369.6 thousand tonnes of wheat flour, up 20 percent compared with the figures in 2015 (305 thousand tonnes). I think that in 2017, we will exceed the level of 400 thousand tonnes of flour exports.

North Korea, Angola, Palestine, Israel and Moldova are the main importer countries of Ukrainian flour. The reporting countries cover nearly 75 percent of the general export shipments. Generally, in 2016 Ukraine exported flour products to 45 countries.

What is the level of raw material in your country? How much of the raw material processed in the mills is produced in your country, and how much of it imported? Which countries do you prefer for the imports? Ukraine produces over 22 million tonnes of wheat per year. In particular, the country supplies 12-15 million tonnes for exports in the form of raw materials, and Turkey is one of the major importers. So, the remaining wheat volumes are consumed on the domestic market. Therefore, we are working with domestic raw materials only.

Could you please give us some information about flour consumption amount and consumption culture of Ukraine? For instance; for which food products the flour is used and how is it consumed? What are the preferences of your consumers in bakery product consumption? Industrial bakery complexes are the major consumers of flour in Ukraine, because they produce a very large variety of bread and bakery products, flour confectionery products, etc. Also, households of the population which produce bakery foods at home cover nearly 10 percent of the domestic market. And the HoReCa market segment covers nearly 5 percent.

What do you think about the future development of your country in terms of both the improvement of the milling industry and consumption amounts, and preferences of your country? What are your future expectations about your industry? We expect that in the medium term Ukraine will reduce the number of flour milling enterprises through exit from the market of old outdated companies with high production costs, and the share of export-oriented companies will somewhat increase. I am sure that by 2020 the export volumes of flour from Ukraine on the global market will reach nearly 800 thousand tonnes.

As an association, do you have any project for your industry, which is being realized right now or will be realized in the future? The major goal that we have in the medium term, is assistance in promotion of our flour milling products on export markets through participation in various food fairs and trade missions in the countries, which are very interesting for us as consumers of Ukrainian products.

Finally, what would you like to add about your association and the flour milling industry in your country? I would like to add that we are completely open for cooperation with all interested partners, and that Ukrainian flour is produced from excellent Ukrainian wheat growing on black earth soils which are the best in the world!

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