World meat industry news

The special operation that began in Ukraine and the subsequent sanctions from the West affected all areas of the domestic economy. The heads of Impress Art LLC and Impress Flexibls LLC Victor Kulik and Vitaly Petrovsky told RIAMO how the restrictions have affected the production of packaging in Russia and what new challenges their business faces in these difficult times.

According to Viktor Kulik, the founder of Impress Art LLC and Impress Flexibls LLC, it has always been difficult for him to run his own business, but entrepreneurial hardening helps to overcome this next wave of turbulence.

“As for deliveries to everyone this year, I say the following: if earlier, as the owner of the company, I was mainly involved in the development strategy and the improvement of operating systems, now 70% of my time is spent on finding and bringing raw materials and equipment,” the businessman says. .

This year, Vitaly Petrovsky became the General Director of Impress Flexibls LLC and Deputy General Director of Impress Art LLC, to whom Victor delegated a share of operational management. They met and studied together at the RANEPA on the Executive MBA program.

“When we were studying, the phrase was very popular: “Culture eats strategy for breakfast.” It seems that now is the time to replace “culture” with “supply chain”, because if there are no raw materials and materials for production, then you don’t need culture or strategy, and there will be no breakfast or dinner. Of course, the sanctions severely slowed down the supply chains, and it took several months to rebuild,” says Vitaly.

According to Viktor Kulik, many European suppliers have already been replaced by alternative ones from India, Turkey, China, the United Arab Emirates and other countries. Russian manufacturers, with whom his business had not previously cooperated, also began to supply raw materials and equipment to companies.

Vitaly Petrovsky notes that many tests of new samples of raw materials have been added to the production process, and this, in turn, requires a restructuring of the entire planning. The previously systemic production chain today must be flexible and mobile in order to meet the needs of customers.

“For the needs of the company, three units of new equipment have already been brought and launched. Four more units are expected to be delivered by the end of the year, and two more at the beginning of 2023,” the source says.

According to his colleague, the demand for the companies' products has increased significantly.

“For us, this year is generally a record year, since we launched another plant at the beginning of the first half of the year – Impress Flexibls. With the growth of demand and orders, we are constantly increasing our capacity. We are actively growing in the nomenclature, a complete list of manufactured goods is presented on our official website. It informs about changes in the very structure of manufactured products,” notes Kulik.

This year, the entrepreneur is seeing a significant increase in demand for Pet food (cat, dog food - ed.) and baby food due to a decrease in the supply of products from abroad.

Vitaly Petrovsky notes that in a situation of uncertainty in terms of supply chains, it is planned to increase stocks of raw materials for three to six months in advance. Companies are also actively expanding their staff in connection with the growth of orders.

Victor Kulik defines the number one task as providing raw materials for the uninterrupted operation of production 24/7.

“Due to production capabilities, due to an experienced team of the technology department and our flexibility, we were able to reduce our dependence on the supply of imported raw materials, which fell under the fifth sanctions package, and continue to work to replace or localize the production of components that are required for the manufacture of packaging,” reports businessman.

According to him, product prices cannot but rise, as the cost of raw materials and logistics costs have risen. Nevertheless, the company provides customers with various loyalty programs and widely uses an individual approach aimed at long-term partnerships.

“We are also constantly working to improve operational efficiency. Now we are actively implementing a new version of ERP production management, which digitizes a maximum of business processes. This allows our companies to be not only competitive, but also high-tech,” adds Vitaly Petrovsky.

The management of Impress Art LLC and Impress Flexibls LLC observes the positive effect of sanctions. Firstly, the imposed restrictions prompted businessmen to actively seek access to producers of raw materials directly (previously, companies acted more through brokers as a third link). Secondly, in the current environment, dependence on Western companies in the Russian market has decreased, which has opened up new opportunities for domestic business.

“It's not for nothing that the Chinese translate the word 'crisis' as 'opportunity',” Viktor Kulik notes.

He predicts that the Russian packaging market will consolidate and grow, and the client will become less demanding on packaging in terms of beauty and marketing.

“And of course, the vector for eco-packaging will continue to move. And we, the manufacturers, will pick it up, and we are already picking it up and working in this direction,” the entrepreneur sums up.