According to Lybov Savkina, commercial director of Russian consulting firm Emeat, to establish an economically feasible feed additives production base, Russian businesses would need to develop export sales since the size of the domestic market remains relatively small.
Savkina was speaking at the recent Agroinvestor conference in Moscow.
Russia consumes only 175,000 tonnes/year of feed additives, which is not enough to justify building feed additive plants serving only local customers, Savkina said.
Other market players share the same opinion. Vladimir Manaenkov, executive director of the Russian Union of Feed Manufacturers, agreed that short-term import replacements mainly for the vitamins market is an unrealistic task.
"Do you know how much money you need to invest in such production? Such an idea will not simply cross the mind of a normal businessman. You need to invest an unlimited amount of funds and still try to compete with the Chinese and Europeans," Manaenkov said.
He did, however, add that reaching self-sufficiency for feed amino acids and enzymes could be within reach in the next five years.
Last year, Russia saw a 16% rise in feed additive imports. Supplies from China surged by 48%, while deliveries from the EU plummeted by 67% compared with the previous year, Manaenkov estimated. Savkina, however, said that in the past two months, EU feed additive exports to Russia started to pick up again.
Sergey Mikhnyuk, executive director of the Russian National Feed Union, agreed that aiming to have the full feed additives production chain domestically based will be very difficult to achieve in the next five years. He explained that initiatives in this field are stalled by “substantial uncertainty, owing to a need to allocate huge investments in the background of vague export prospects."
On the other hand, Russia could see some progress in making the production of microbiological synthesis-based feed additives more local, Mikhnyuk said, adding that when it comes to chemical synthesis, "there are more questions than answers."
Russian feed companies could ramp up the domestic production of products like probiotics, antioxidants, and fats, Mikhnyuk added.
Domestic feed additive production has been widely discussed in Russia during the past year, as Western sanctions caused temporary supply disruptions in some market segments.
