Belarus Market Research

As the economic recession which had threatened most part of the world in 2009 begins to show signs of recovery, the food and beverage sector in Belarus is picking up with the confidence of new investments pouring in. By the mid... view more

Belarus Market Research

As the economic recession which had threatened most part of the world in 2009 begins to show signs of recovery, the food and beverage sector in Belarus is picking up with the confidence of new investments pouring in. By the middle part of the year 2010, the research shows facts and figures that both international, as well as national companies, are showing interest in expansion, in spite of the fact that Belarus is considered to be one of the poorest countries for business. Firstly, going by international investors, the Confederation of Italian confectioners announced that it would start production of pastries in Belarus. This announcement was made in March 2010. Most of the companies in the food and beverage sector are drawn towards Belarus due to the abundance of raw materials and capacity of manufacturing goods. According to the plan laid down by the Italian confederation, Belarusian raw materials like eggs, milk, wheat and other materials will account for 70% of all the ingredients which are to be used in manufacturing. The primary reason for this would be the low cost of raw materials in Belarus coupled with modern technologies in production. These reasons make it a lucrative chance for international investors. After the March announcement, there followed an announcement in April made by a major Lithuanian investor who was interested in investing US$100 mn in the nation’s meat processing industry.

Next in line are the local investors who are also showing renewed interest in pumping money into Belarus’s food and beverage sector. In April, local brewery Krinitsa announced that it had already completed the third phase of a large-scale reconstruction program which it had begun. This helped the company to increase its beer production levels from 18 mn decaliters to 24 decaliters. The total funding for the expansion was to the tune of US$18.79 mn, out of which US$ 14.66 mn was through a loan. The company reasoned that the expansion plans were for upgrading the market structure and taking a bigger part of the competitive landscape. This is in direct retaliation to the number of foreign investors entering the beer business in Belarus. After this, Krinitsa also announced in May that it would be increasing the production levels of kvass tenfold, to 500,000 decaliters to capture a greater share of the non-alcoholics market. This move was a direct response to the government’s move to consume beer in public places which could reduce sale of beer in Belarus. The Polotskoe Pivo unit is expected to start production of kvass by next summer in bottles and kegs. Since kvass produced in kegs won’t be using chemical preservatives, they will have a shelf-life of only 48 hours and will be shipped to specific areas, primarily around the Minsk area. The kvass produced in the bottles will be sent to the St. Petersburg region. Now that the main effects of the economic crisis are over and Belarus showed 0.2% growth in 2009, the signs are positive in 2010. The research shows that the government’s growth levels will be around 10% in 2010 which will be higher than before the crisis hit Belarus.