Specifics of the Russian market of food and processing industry equipment

The food industry, with its 43,263 enterprises, is one of the most vibrant economic sectors in Russia.

• equipment for the meat industry, including the poultry industry (94%);
• equipment for the fat-and-oil industry (90%);
• equipment for the sugar industry (81%);
• packing and weight measuring equipment (79%);
• equipment for the dairy industry (70%).

• production of animal fat (92%);
• production of cacao, cacao butter, cacao fat, cacao vegetable oil, and cacao powder (81.6%);
• production of processed rice (80.4%);
• production of chilled poultry (77.9%);
• production of beer (77.5%);
• production of margarine (76.5%);
• production of non-alcoholic beverages, either flavored and/or with sugar, except for mineral water (76.5%);
• production and canning of poultry (74.8%);
• production of malt (74.7%);
• production of bread and short-lived bread products (72.9%).

Large Russian food companies, which are in demand of foreign equipment including second-hand goods, usually can afford them. Considering tight competition on the food market, manufacturers seek to make quality mass products and prioritize high productivity and capacities of purchased equipment. They also have a vast opportunity to sell used equipment, which bolsters their investment capacities and allows a more frequent renovation of fixed assets.

Main consumers of Russian-made equipment in many segments of the food industry are small and medium companies, which often use more affordable equipment with lower production capacities (with either medium or low yield).

• higher automation of production processes;
• implementation of resource saving (primary energy saving) technologies;
• transfer of foreign technologies;
• higher quality of service.

1. Absence of trade barriers for foreign manufacturers:
   • many types of equipment are exempt from import duties;
   • import duties on component parts are up to 10% of the customs value.
2. Interest in research and development, possibility of implementation of high-tech projects;
3. Tax terms and benefits (relatively low cost of land and workforce, relative proximity to the huge Chinese market, etc.);
4. A great variety of special economic zones and rapid development territories with advantageous tax regimes and assistance to new businesses;
5. Developed transport system;
6. Proximity to promising markets. Foreign investors could be interested in both the Russian market, which they view as strategic, and in foreign markets, and in the latter case our country is viewed as a convenient platform for manufacturing and exporting goods;
7. Possibility of dialogue with the regional authorities;
8. Availability of skilled workforce.

(Source: materials of the Development Strategy for Food and Processing Industry Machine Building in the Period until 2030.)