Olam Insights

    Issue 2/2015: Transforming Rusmolco Into a Modern, Reliable Supplier of High Quality Milk and Agricultural Crops

    Russia has long had a structural shortage of raw milk despite possessing favourable conditions for dairy farming. The country’s milk deficit is likely to be more acute than that suggested by supply and demand data, as over 30% of domestic production has been deemed unsuitable for processing to meet the high quality standards of international processors. This issue is exacerbated by the political restrictions in food imports, further raising the call for high quality raw milk.

    In this second issue, we ask our Dairy team in Russia to share how our presence in the country through Rusmolco is making an impact in the dairy farming industry as it overcomes challenges and capitalises on the long-term competitive advantages in the sector to deliver high quality milk for the local dairy processing industry.

    Russian Diary: Taking a long position in a short market
    Vivek Verma, Managing Director & Global Head, Diary, Coffee & Funds
    A high demand for milk and a large, growing demand-supply gap has made Russia one of the largest importers of milk in the world. Russia’s recent food import restrictions have only exacerbated the situation causing the supply of locally produced high quality raw milk suitable for processing to become ever more critical. We believe it is a golden opportunity for Rusmolco to rise to the occasion and take a leadership role in servicing the demand gap with increased supply of high quality milk. Read more here.

    Investing in Russia: Aligning our focus for win-win outcomes
    Raj Vardhan, Senior Vice President & Regional Controller, CIS Region
    It is in the interest of Russia to support greater investments in the local farming sector as this leads to import substitution. Notwithstanding these support structures, long term success and responsibility rests on investors to prove their mettle. To succeed, corporate investments should be directly aligned with the objectives of the Russian government. Our investments in dairy and crop farming are a case in point. Read more here.

    A sharp learning curve but unfazed
    Sumanta Kumar De, Vice President and CEO, Rusmolco
    There was never a doubt that operating in Russia would be an enormous challenge. From living in harsh winters, working with a new partner, getting the right people at the right places, to the varied technical challenges faced in the dairy farms and organising the team to focus on key deliverables, there were many obstacles, especially in the initial years. We are very pleased with what the team has been able to deliver and the rate of progress we see across the board. Read more here.

    Rusmolco’s contribution to Russian agriculture
    Vladimir Raznichenko, Deputy CEO, Rusmolco
    Rusmolco has had a significant positive impact on the development of the Penza region in Russia. In fact, Rusmolco’s dairy and agri projects have become among the key locomotives driving the agri sector of the region forward through dairy and crop production, logistics infrastructure development and growing the supply of high quality agricultural raw materials to meet the growing domestic demand. Read more here.

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