Confectionery producers in Ukraine are confident that they will be able to increase output by 10 per cent this year, mainly as a result of a recovery in exports to Russia.
According to the latest overview of the market by Moscow-based consultants Market Advice, Ukrainian producers made 715,000 tons of confectionery products last year, a 5 per cent drop compared to 2001, due mainly to a decline in Russian sales during the first half.
But a recovery in the second half of last year has continued into 2003, and market Advice suggests that output should be up significantly as a result.
Total Ukrainian confectionery output is estimated at around 1 million tons, according to Market Advice, with annual growth potential seen at 20-25 per cent. There are few confectionery imports - around 2 per cent of total consumption.
Local producers continue to dominate the market, although two major international food groups have a growing presence: Swiss group Nestlé owns a facility in Lvov and has an 8 per cent market share, while the US group Kraft Foods owns a factory in Trostyanets and accounts for 5 per cent of total output.
Roshen is the domestic market leader with four production plants and 26 per cent of total sales. Roshen is also a major player in the Russian market with two production facilities there. The company currently produces around 180,000 tons of confectionery a year in Ukraine, and last year posted sales of $205 million, up 10 on the previous year.
Such is the success of Roshen that it is planning to begin exporting its sweets to the US and other European countries this year, according to Market Advice. AVK is the number two player in the Ukraine market with a share of around 13 per cent, while Kiev-Konti has around 10 per cent.
All three companies have big plans for expansion into Russia and other European countries, Market Advice said.
This expansion has become possible because of the major steps taken by the companies to improve the quality of their confectionery products. The Russian market had far higher quality levels in 2000-2001, but experts suggest that Ukrainian production is now at least on a par with that of its larger neighbour, and for some products it is even higher.