The Russian food manufacturer Essen Production AG, which produces goods under the Maheev brand, was able not only to maintain its position in the pandemic year 2020, but also to outperform Coca-Cola in the Russian market segment in the FMGG (fast-moving consumer goods) category.

GROWTH DURING A PANDEMIC

The company's annual turnover in 2020 amounted to 28.33 billion rubles including VAT, which is 22% higher than last year's results, Essen's press service said.

The growth was demonstrated by the manufacturer's entire product line. So, last year, 157 thousand tons of mayonnaise (+9.6% against 2019), 48 thousand tons of tomato products (+12.7%), 27 thousand tons of jams, sauces and seasonings (+24.6%), 40 thousand tons of confectionery products (+7%) were produced. More than 274 thousand tons of finished products were shipped in total.

"The total amount of tax deductions exceeded 2 billion rubles", - said Essen.

The volume of exports in 2020 increased by 19% and amounted to 4.7 billion rubles including VAT. The company's products are sold throughout Russia, as well as in 34 CIS and non-CIS countries.

General Director Leonid Baryshev pointed out that Essen invested a considerable part of funds into modernization of production and expected that the new lines at the plants would start working already in 2020. But the pandemic has made its adjustments. "The revenue that was generated last year was mostly generated on the old lines," Baryshev said.

SWEET STATS

According to the CEO, the coronavirus had a very serious impact on plans to launch new equipment and new production facilities. "Some of the projects had to be postponed, but we can see that the confectionery is growing even now, although less than we would like," he said.

The entrepreneur explained that the third phase of the company's confectionery production was not launched until July 2021, as there was a problem with the installation of equipment.

"We conceived the investment programme back in 2019, 2020 we had the shop built, the equipment filled and partially launched. Unfortunately, due to the fact that there were restrictions on the importation of specialists, we delayed the launch a bit and are now in a continuous mode of receiving new equipment and debugging the work. That is why now we are only getting ready to receive those investments which have been made," Baryshev said.

The total volume of investments in the third stage amounted to 2.5 billion rubles, and the total amount of funds exceeded 7 billion rubles, said Essen.

POSITION 1

It is worth noting that according to the Oil and Fats Union of Russia, in the first half of 2021 Essen Production maintained its position No. 1 in Russia by the volume of output among Russian producers of mayonnaises, mayonnaise sauces and ketchups.

"For sauces, we saw a sharp surge in purchasing activity in 2020 as households began to cook for themselves. We were not strongly represented in the HoReCa (hotel and restaurant) market and losses were insignificant, while in-store sales were abnormally high. We saw good revenue growth in the sauce group. This year we do not see such a story, but we are keeping this year's plans, "- commented Baryshev.

The company also said that in 2020, to provide the necessary goods to all consumers, the company has implemented a project to improve the speed of the process, expanded the cooking shop and put into operation the mayonnaise and ketchup production lines.

To ensure the development of production, contracts were signed to purchase new lines for the preparation and packaging of jams, sauces, mayonnaises and ketchups. In addition, in November 2020 the finished product warehouse for 7 thousand pallets with cargo portals for 8 machines was put into operation. This made it possible to promptly and in a larger volume ship products to consumers.

The production site has achieved the highest labor productivity among Russian food companies - 19.93 million rubles per person, Essen emphasized.

ONLY FORWARD

According to Baryshev, market volatility persists, but the company manages to maintain high production rates and flexibly respond to the realities of the time.

"We see that the raw materials market has not recovered, which imposes some restrictions on us both in terms of marketing and assortment. Many of the sweets that we wanted to surprise the market just don't go through, we are postponing them for a later period. The segment is under pressure: customer demand from below, raw material market from above. Here we need to adjust our plans, assortment, and strategy. This is a deterrent from a pandemic," he said.

At the same time, Essen noted that 750 people were hired in 2020. The number of employees increased to 2020, and the salaries at the production facility are among the highest in the country - line operators receive up to 40-47 thousand rubles, assistant brewery operators - 50 thousand rubles.

This year, the employees' wages are to be indexed, Baryshev assured.

Made in Russia / Made in Russia

Author: Maria Buzanakova