A food manufacturing revolution in Ukraine
food production in 2003. This is partly due to the influx of major
global food manufacturers to the country - Heinz for example has
become a major manufacturer of liquid and dry baby food in the
region.
The Odessa State Regional Administration reported that in 2003 meat processing grew by 42.3 per cent, fish processing by 34.6 per cent, fruit and vegetable processing by 46.2 per cent and the production of alcoholic beverages by 28.4 per cent. Sugar processing is also another important industry for the city and production was said to have increased by 1.7 times.
The driving force behind the major increase in output for the agriculture and food processing sector has been significant investment from companies overseas - namely US and western European companies. In 2003 an estimated 14.8 per cent of total investment in the region went into this sector, accounting for $988.3 million (€819m).
The national average increase in the processing of food and agricultural products in the Ukraine last year was 22 per cent. This figures reflects the huge growth the sector is experiencing throughout the country. In March for example, dairy culture leader Chr Hansen opened new offices in Kiev, citing strong business opportunities and the company's strategy to be the first player in a new market as a driving force behind the move.
"The food business here is consolidating with a growing trend towards more and more industrialised food products," Lars Wodschow Larsen, manager of the new Ukraine office told Foodnavigator.com.
But it is in Odessa where growth in food manufacturing is most significant. The region borders the black sea and has a population of 1.1 million people, making it the fifth largest city in the Ukraine and the conurbation along the black sea. Including the surrounding administrative districts and suburbs the population is an estimated 2.5 million people.
The region is a major industrial belt for the Ukraine and currently provides a significant amount of the country's heavy machinery, mineral and fertilizer products. Currently around one third of its output is attributed to both agricultural, food and beverage product processing.
A former USSR territory Ukraine - referred to as the 'breadbasket of Europe' - has a strong agrarian tradition. Wheat is the country's major crop, in the 2001/02 marketing year Ukraine became the 7th largest world wheat exporter and the 8th largest wheat producer. But it also produces barley, rye, oats, peas, maize, sunflower seeds, sugar beets, milk, poultry meat, pork, and beef.
The growing and processing of sunflower seeds for vegetable oil is also big business. Sunflower oil constitutes about 95 per cent of all vegetable oil consumption in Ukraine. The country remains the third largest world producer of sunflower oil.
A report published last month by market analysts Euromonitor claims that in 2003 the average proportion of spending on food by households was quite high compared to western Europe, with the majority of the population spending between half and up to 80 per cent of their wages on food.
