I believe that this material is a unique illustration of the real problems of the industry, because its representative did not name EVEN A SINGLE ONE of the problems which are really important.
I will give explainations to each of the positions:
1. “Constant misunderstanding between milk producers and processors”. This is the standard and natural situation. For the buyer it is always expensive, and for the seller it is cheap. This is the standard situation in all countries of the world. A good processor has the appropriate relationship with suppliers. So there is no problem.
2. “Insufficient control by the controlling bodies on the quality of the raw milk”. I would like to think that this was a joke, but it really was written !!! Dear processors, YOU youself decide what raw milk to purchase !!!! If so, then you would write that processors do not have enough control over the quality of products and counterfeit, it would be closer to the truth :). In general, many processors are engaged in the purchase of “black” milk. Is this also the problem of controlling bodies ?!
3. “Increasing competition from illegally operating enterprises”. These include the milk, sour cream and cottage cheese sold by “babushkas” on the markets. I have shown many times that about 20 billion UAH are being rotated in this segment and this figure is growing. But this is the problem of not just controlling bodies but the dairy processors !!! What, dear ones, prevents you from creating one normal association of processors, your own quality control system and promotion of quality raw materials? For $2 million you can organize an excellent information campaign, which will explain to Ukrainians, why it is dangerous to buy such products in the markets and so on. So, once again – it’s a banal shifting of your own problems to others.
4. “Constant reduction of the amount of milk production”. Generally, this is not a problem, in my opinion. Most of the dairies had problems with sales of finished products in recent years. After all, I will repeat once again, 20 billion hryvnyas – this is the turnover that goes past dairy processors. Just do what I wrote above and you will not have problems with the raw milk. One more point – pay more for extra quality milk ipand professional milk producers will have a stimulus to develop production. The third point is to manage your business effectively. Not just logistics, but also marketing, and you will immediately have money for raw milk and milk producers will increase production volumes more actively.
5. “Limited access to financial resources”. This is not a problem for the dairy industry only, this is a problem for all industries. But dairies should not complain about it at all !!! I will explain why : for many years in a row they earned a 100% margin on cheese exports to Russian Federation. At the same time, no new plant was built for this money (ok, a couple of new ones were, but just these dairies have no problems)! There has been neither efficiency increase, nor investment in marketing. Where did these finances go? Just guess.
Here are my top 5 dairy industry problems:
1. Management. This is a huge problem. Failures in efficiency at every stage of production, and especially in marketing.
2. Lack of an association of processors, which would really work for the industry and deal with the promotion of exports, promotion of domestic consumption and fight against low-quality products, etc.
3. Lack of systematic work on the export of products. There are certain signs of progress, but in principle, this factor holds back the development of all the industry. Now the world prices have gone up a bit, and immediately the dairy sector relaxed. The systematic work involves creating a strong position in strategic markets. And again, there exists a big problem with personnel!
4. Lack of focus on the quality of both end products and processes within the enterprise. The biggest problem is lack of systematic work to improve the quality of raw materials. It discredits the industry in the eyes of the consumer and negatively affects efficiency of the entire chain. This is a problem for almost all manufacturers. Only some of them work in other way.
5. Sounds banal, but the problem is also outdated equipment and technology. We have built up 2-3 new plants for the years of independence, and we continue to modernize and reconstruct the dairies that have no prospects.
I would also add the lack of cooperative dairies, but this is a problem for milk producers, not processors. And I will do my best to make the cooperative dairies appear. Then processors will have even less raw materials, and new competitors will appear on the market! And then, in my opinion, they will really get busy solving their own problems, and not shift the responsibility for their problems on some external factors!
facebook, Andriy Yarmak