The Soyuzstarch Association held the VIII international conference “ProStarch 2024: market trends for deep grain processing” in Moscow on April 19 at the site of the Chamber of Commerce and Industry of the Russian Federation. At the event, the current situation and current issues in the grain processing industry were discussed.
The conference consisted of three parts: two thematic sessions and an expert panel “Directors’ Club”, in which heads of leading enterprises in the industry took part. The event brought together more than 70 representatives of enterprises in the grain processing industry. The conference participants discussed the experience of different countries in the field of advanced grain processing and exchanged views on the prospects for the development of the industry.
Chairman of the Committee for the Development of the Agro-Industrial Complex of the Russian Chamber of Commerce and Industry Peter Chekmarev delivered a welcoming speech and stated that in recent years Russia has been confidently conquering the world grain market, constantly increasing the volume of supplies of plant raw materials abroad. However, due to overproduction, product prices have already fallen below production costs, creating big problems for agricultural producers. Therefore, the growth of grain production needs to be stopped and focus on the development of the processing industry within the country. He emphasized that the Russian Federation annually sells 40-60 million tons of grain to more than 100 countries. At the same time, we import a huge amount of products that are made from these raw materials abroad - amino acids, vitamins, protein products. According to Chekmarev, today Russia processes only 2,5 million tons of grain, but should reach at least 15 million tons. To do this, we need to work more actively with science, master new technologies, and also develop cooperation with foreign partners by creating joint ventures in Russia.
Oleg Radin, President of the Soyuzstarch Association, opening the conference, said: “Russia has all the necessary resources for the large-scale development of the deep grain processing industry. The state has also laid down all the mechanisms to support our industry. And although “at the moment” the industry remains insufficiently attractive for investment due to the high key rate, complex logistics, high capex, long-term payback of projects, interest from investors is growing. We are at the beginning of the evolutionary path of industry development and the next decade will be decisive for the industry.”
The vice president, head of the analytical department of Gazprombank spoke about what challenges will remain in the agricultural industry in the coming years. Daria Snitko. She voiced three main problems that the state and business will have to focus on. The first is the shortage in the labor market. Against the backdrop of growth in economic output, Russia is experiencing a shortage in the labor market, including in agriculture. Companies traditionally solve this issue by raising wages. The second difficulty is the cost of money, which, according to experts, will remain high in 2024. This factor greatly constrains investment activity in the industry, especially in the deep grain processing industry, which requires the creation of new capacities. Finally, the third challenge is the rise in cost of logistics. Agriculture, like other sectors of the economy, is undergoing a restructuring of exports from West to East (the same applies to imports, because the same equipment now has to be imported from friendly countries). The use of longer routes leads to a significant increase in the logistics costs of enterprises.
The situation on the Russian grain market was presented by the General Director of the Institute for Agricultural Market Studies Dmitry Rylko. He predicts that the export volumes of wheat and barley will reach their maximum, and the share of corn exports will reach a historical figure of 40% of production volume. “Great things,” according to Dmitry Rylko, are also happening in the pea market. Since 2021, Russia has been actively expanding the area under this crop - this season it will increase to 2,2 million hectares. The main export-oriented “pea-growing regions” are the Stavropol and Krasnodar territories, as well as the Rostov region. Currently, the Russian Federation exports more than half of the peas grown, mainly to India and China. This season, the forecast for the export of this crop is at least 2,7 million tons, next season - about 2,8 million tons, if there is a good harvest. So far the situation is quite alarming - drought is possible in the south. But at the same time it is necessary to develop the internal processing of this culture.
The conference was sponsored by Myande Group, Grain Improvers and ZAVKOM-ENGINEERING LLC. Dmitry Arsenyev, a representative of Myande, shared with the audience the company’s experience in implementing deep grain processing projects. Myande has implemented more than 1000 projects in more than 80 countries, including Russia. Anastasia Sigeeva, Technology Director of Grain Improvers, presented a report “How to process complex grains while maintaining starch yield.” Anastasia spoke about the company's scientific developments - enzymatic grain improvers, the use of which makes it possible to neutralize the effects of using complex and damaged grain in production. Enzyme grain improvers make it possible to maintain and improve the quality and quantity of starch and gluten.
This year, a new format for communication with experts was introduced at the conference - “Directors’ Club”. Top officials of leading companies in the industry took part in the club meetings: Roman Kozyrev, General Director of Rustark, Sergey Mamontov, founder of the Yubileiny Agroholding, Andrey Adamchuk, Head of the project office of JSC Donbiotech and Vasily Byzov, Director of the All-Russian Research Institute of Starch and Processing of Starch-Containing Raw Materials. They shared their personal experiences, told what challenges the industry is currently facing and how they are solving them at their enterprises. We discussed what the industry lacks for development, and whether the deep grain processing industry can repeat the experience of developing the grain industry. The session experts gave the speakers' forecasts about the directions of industry development.
Vasily Byzov, director of the All-Russian Research Institute of Starch and Processing of Starch-Containing Raw Materials, spoke about the activities of the institute, scientific developments, areas of work of scientists and interaction with enterprises. “Our industry is developing very actively and there is a need for personnel, and now it is felt especially strongly. We continue to actively interact with industry companies on HR issues. In particular, due to the fact that our institute is part of the Soyuzstarch association. Our employees constantly participate in industry events and the Association of Advanced Grain Processing Enterprises,” explained Vasily Byzov. Among the popular areas of scientific development, he noted the production of modified starches, both food and industrial, inulin, protein products, and glucose.
Pavel Paramonov, Head of the strategic marketing group at Cargill, analyzed the work of the starch and related industries in Russia. He said that the average annual growth rate (CAGR) of demand for starches over the past 5 years was +6.5%. During this time, starch production in Russia almost doubled. Growth factors in this area are demand from the growing corrugated industry, the oil sector, increased exports, and the development of production of food modified starches. Pavel also noted that the production of molasses and syrups has seen record levels for 4 years in a row. Growth factors for them are the continued increase in the production of fructose syrups against the backdrop of expensive sugar.
She made a report on the needs of the Russian market for feed amino acids and vitamins Lyubov Savkina, CEO of FEEDLOT. According to her, in 2023, the total import of feed amino acids into Russia is estimated at 127 thousand tons, which is 18% lower than the figure for 2022 or 6% higher than the level of 2021. The total import of feed vitamins is estimated at 31 thousand tons, which is 19% lower than the figure for 2022, but exactly the level of 2021. In the overall structure of amino acid supplies to Russia, threonine accounts for the main volume - 29%, but its consumption over 4 years has decreased by 6%, while the demand for other amino acids, such as valine, arginine, isoleucine, has increased significantly. The total share of imported lysine exceeds 40%, but in recent years the consumption format has changed: the demand for lysine HCL has decreased, but the demand for sulfate has increased, which was facilitated by supplies from BNBC.
She spoke about the Russian market of plant proteins Sofia Murzina, project manager for food raw materials market research at the Center for Investment and Industrial Analysis. She named the main factors hindering the development of the plant protein market in the food industry: low awareness and their negative reputation, as well as the price of plant protein compared to animal protein. As for the prospects for plant proteins in Russia, domestic demand is limited by the lack of government demand stimulation programs. As for external demand, Russia’s new industry specialization on a global scale has not been defined. It is worth noting the lack of strategic understanding of demand development in export markets and competition with China.
Polina Semenova, Executive Director of the Union of Food Ingredient Manufacturers, noted that global challenges to ensure food security have been resolved, but food ingredients are the vulnerable link. Currently, 30 items out of 349 permitted are produced in Russia, which does not cover 3% of domestic demand. To achieve the long-term goal in the field of food security, it is necessary to achieve technological sovereignty - the development of production, technology and competencies in the ingredients industry.