Swedish group Semper to double its presence in Russia
to Russia, as the market there is growing much faster than in many
other countries, writes Angela Drujinina.
In fact according to Christina Hedstrom, director of Semper's export department, Russia and the CIS have been the priority export destinations for Semper's products since 2003. And now exports to the region are set to increase further.
"Semper is planning to increase its share in the premium segment of the Russian and CIS baby food market to 30 per cent before 2008,"she said. "Our current market share in the region is 17 per cent."
According to Hedstrom, the company is well on track to achieve this target. The growth rate of baby food sales in Russia and CIS is about 17 to 19 per cent a year, which is a lot higher than the average European growth rate of 7 to 10 per cent, according to figures from UK marketing research company Rubicon.
Semper's exports to Russia are concentrated around two key products - around 50 per cent of all exports is milk substitute, while canned baby food makes up 45 per cent. Semper intends to strengthen its position in these two key sectors by increasing the effectiveness of its marketing strategies and further developing its distribution network, particularly in the provinces.
In addition, the company plans to increase its market share in the region by increasing the range of products on offer. In 2002, Semper offered in the region of 57 articles, which in 2004 was increased to 72.
The company expects to introduce a further 10 brands of baby food before the end of the year. The new range will be specially formulated for children living in different regions of the vast Russian and CIS territories.
The company has also studied the possibility of producing baby food in Russia. At present all Semper products are manufactured at the company's three plants in Sweden, and establishing Russian production could lead to various cost savings.
However, the company concluded that despite the potential efficiencies of such a move, the problems of guaranteeing the quality and safety of raw materials are at present too prohibitive.
Semper is the leading baby food manufacturer in Sweden and one of the largest players within the Scandinavian sector. It has been operating in Russia and the CIS for eight years, and recorded a turnover last year of €116 million.
The company sells 79 per cent of its products in Sweden, 9 per cent in Finland, 5 per cent in Russia and CIS, 3 per cent in the UK and 4 per cent elsewhere.
