How to succeed in the dairy business in our difficult time

Andrey Romanov, APH “Zalesye” In the current situation, you need to find a balance at the expense of your own feed
Streda Consulting and Milknews talked with Andrey Romanov, Chairman of the Board of Directors of one of the most successful farms in the Kaliningrad region, APH Zalesye, about how to succeed in the dairy business in our difficult times.

On November 26, at 12:00, an online presentation of the first rating of dairy farms by productivity, compiled by the consulting agency Streda Consulting and Milknews together with Soyuzmoloko, will take place. On the eve of this event, we talked with Andrey Romanov, Chairman of the Board of Directors of one of the most successful farms in the Kaliningrad region, APH Zalesye, about how to succeed in the dairy business in our difficult times.
Milknews: In your opinion, what is the key to the success of dairy farming these days?

A. Romanov: In the field of animal husbandry, as well as in the agro-industrial business in general, it is important to introduce technological innovations. The use and combination of technologies allows you to open up new opportunities and horizons.
Milknews: What technological innovations are you implementing in milk production?

We see two main directions of innovation implementation. The first is work in the direction of breeding and genetics, which makes it possible to improve feed conversion, livestock health, and, as a result, reduce veterinary costs, while increasing the effective life expectancy of cows.
The second is work in feed production. Obtaining our own high-quality feed allows us to reduce the cost of purchased, primarily high-protein concentrates. This is especially relevant in the current market situation, when the growth rates of prices for such feeds are measured by tens of percent.
Milknews: What innovations and technologies do you use to develop breeding and genetics? Is the geography of supplies of the cattle you have raised expanding?
A. Romanov: We are trying to use all modern achievements in the field of breeding and genetics. But our main goal is to increase the effective life expectancy of cows and reduce culling. This gives us the opportunity to increase the supply of breeding stock to other regions of the Russian Federation. The geography of supplies is expanding, and we see this as a prospect.
Milknews: In 2020, you implemented a rather unique project for Russia – you opened a modern breeding and genetic center. What has been achieved in the first year of work, and what are the plans for further development of this project?
A. Romanov: First of all, we have gained invaluable experience. After all, this is a completely new type of activity for us, which, like everything new, required a lot of effort to launch. Plus, the conditions of the pandemic also overlapped, which we could not take into account in our plans in any way.
The sale of genetic material is connected with direct contacts between the buyer and the seller. This is not a product that can be sold through advertising in the media. When the possibility of these contacts was interrupted, it directly affected sales volumes, and we were unable to reach the planned targets. But now the situation is improving. We are adapting to work in new conditions, and I am sure that we will achieve our stated goals.
Milknews: Do you plan to expand production capacity in the raw milk segment?
A. Romanov: We are planning to build another complex for 35 thousand tons of milk per year. Now the object is in the design stage. We expect to build and put it into operation in 2022-2023. The milk produced there will be processed at the LLC “DMS-Vostok” plant, which will also be launched in 2023.
Milknews: How will the opening of the DMS Vostok plant affect the Kaliningrad region’s milk market?
A. Romanov: The appearance of this enterprise in the Kaliningrad region will give a new impetus to the development of dairy farming in the region and bring new products both to the Russian market and for export.
Milknews: What volumes of milk production do you plan to receive by the end of the year? Will the volumes increase or decrease compared to 2020?
A. Romanov: We will increase milk production to the level of 2020 and plan their annual growth in the future.
Milknews: Profitability in the dairy market has been falling recently, due to an increase in the cost of raw materials due to the rise in price of its components. How do you manage to maintain a high level of efficiency in such difficult conditions?
A. Romanov: First of all, at the expense of their own feed, which, with high quality indicators, allow not only to save on purchased raw materials, but also to maintain the health of the herd. In the current market situation, given the rising prices for feed additives, veterinary drugs, and care products, it is necessary to find a balance at the expense of their own feed, careful preparation of the diet and monitoring of the company’s own economy.
Milknews: What advice could you give to other farms to improve production efficiency?
Go ahead boldly. There have been crises in our industry more than once, and when the situation stabilizes, the dairy farming sector reaches an economically high level. Also, of course, you need to believe in your business. We produce food for the population – we do hard but noble work. It has always been and will always be an important component of society.
You can join the online presentation of the first rating of dairy farms by productivity by registering at the link.
The project was supported by industry leaders: the general partner of the rating was the company “Kocent Rus”, the official partner is the company Pecus International. The rating partner is Cargill.
All ratings can be found on the website: /
© Milknews – Dairy Market News

The Russian Agricultural Bank starts financing the construction of an apartment building in the Polessky district

The Kaliningrad branch has signed a loan agreement with kAshtanovka LLC for the construction of a 36-apartment residential building in the village of Zalesye, Polessky district.
Financing of a low-rise apartment building is the second project in the territory of the Russian Federation, implemented with the participation of JSC “Russian Agricultural Bank”. The Bank is an authorized bank in the implementation of the state program of the Russian Federation for the Integrated Development of Rural Areas for the period 2020 – 2025 to improve the quality of life and the level of well-being of the rural population and became the first participant in the new mechanism of preferential lending within the framework of the Decree of the Government of the Russian Federation dated December 24, 2019 No. 1804 “On approval of the Rules for granting subsidies from the Federal budget to Russian credit organizations, international financial organizations and the State Development Corporation “VEB.The Russian Federation” to compensate for the income they have not received on loans (loans) issued to individual entrepreneurs and organizations registered in rural areas (rural agglomerations), for the development of engineering and transport infrastructure, construction of residential buildings at a preferential rate.”
The construction of a three-storey two-section residential building is an example of modern integrated development of rural areas. The purpose of the project is to create comfortable conditions for employees of the large agro-industrial holding “Zalesye”, which has been cooperating with RSHB since 2002 and jointly implements investment projects with the bank. The volume of the loan portfolio currently exceeds 7.5 billion rubles.
“The loan agreement for construction was concluded with kAshtanovka LLC, which is part of the Zalesye Agricultural Complex. Our client has successfully implemented 2 investment projects for the construction of dairy cattle breeding complexes with the financial participation of the bank in the amount of 4 billion rubles. The amount of financing for the construction of an apartment building is 128.5 million rubles. The project is designed for 10 years,” commented Vladimir Vlasenko, Head of the Department for working with large business clients of the Kaliningrad branch of RSHB.
“The construction of an apartment building is aimed at creating comfortable living conditions for specialists in the field of agriculture, both attracted from other regions and residents of our region. When a specialist has solved the housing issue, he is confident in the future and directs his forces to creation. Thanks to the support of the Rosselkhoznadzor, we will be able to provide safe, modern and comfortable living conditions for those who choose such a complex, responsible, and very important for all activities to ensure the food security of our country,” said Andrey Romanov, Chairman of the Board of Directors of APH “Zalesye”.
“Integrated development is a new reality in the development of rural areas, a unique project, the implementation of which will improve the quality of life, will help attract qualified personnel,” said Inessa Musina, director of the branch Inessa Musina.


Top 100 largest milk producers in Russia 2021

The Center for the Study of the Dairy Market (DIA) represents the top 100 largest milk producers in Russia. In 2020, the volume of raw milk production in Russia amounted to 20.7 million tons, 5.4% higher than in 2019. The growth rate of raw milk production in 2020 was higher than the average level of the last seven years.
The share of the TOP 100 largest producing companies in the total volume of milk production in 2020 was 30.3%. The share of the first hundred companies in the Russian market continues to grow, in 2019, the TOP 100 companies occupied 28.4% of the market. In 2020, the TOP 100 companies produced 6.3 million tons of raw milk, which is 12.9% more than in 2019. EkoNiva remained the undisputed leader, 925 thousand tons of milk were produced on the holding’s farms in 2020, which is 21.9% (+166.4 thousand tons) more than in 2019. The growth rate of EkoNiva milk production in 2020 slowed down, in 2019 the growth was 56.7% (+274.5 thousand tons).

Nevertheless, the company’s share in the production of raw milk in Russia has grown to 4.5% (in 2019, the share was 3.9%). Taking into account the eco-reserve, the growth of milk production in Russia in 2020 amounted to 5.4%, without the eco-reserve 4.9%. If we subtract the indicators of the economy from the volume of milk production in the agricultural sector, the difference will be even more significant. In 2020, the growth of milk production in the segment of agricultural enterprises with EkoNiva was 5.3%, excluding the company 4.7%.

The first three of the rating remained unchanged, EkoNiva-Agro-industrial Holding took the first place, the State Property holding took the second place, the Tkachev Agrocomplex Company JSC took the third place, all three players continued to increase the volume of raw milk production. Public sector enterprises increased milk production by 12% (+52.8 thousand tons) to 490.3 thousand tons compared to 2019, the agricultural complex increased production by 15% (+40.6 thousand tons) to 312 thousand tons.

The St. Petersburg Piskarevsky dairy plant remained in fourth place, among private companies, although the growth of milk production on the holding’s farms in 2020 was small, only 1% (1.5 thousand tons).

Rusmolco Holding (Olam Int) rose to the fifth place in the rating. The company increased milk production by 43% (+39.4 thousand tons) in 2020 and climbed six steps up. The company entered the top ten participants of the rating with the fastest growth in milk production in 2020. In general, the top ten of the rating has undergone changes in 2020.

Ak Bars dropped from the fifth place in the ratings to the seventh, reducing the volume of raw milk production by 12.7% (-17.1 thousand tons) to 117 thousand tons. The Kirov company APH Doronichi continued to grow and rose from the eighth to the sixth place in the rating, the volume of raw milk production amounted to 125.5 thousand tons, by 14.8% (+16.2 thousand tons) more than in 2019.

CJSC Kirov Dairy Plant rose from the tenth place to the eighth with an indicator of 116.9 thousand tons, by 15.5% (+15.7 thousand tons) more than in 2019. JSC Concern Pokrovsky went down from the sixth place to the tenth, milk production on the company’s farms increased, but only by 1.8% (+2 thousand tons) compared to 2019 to 112 thousand tons. JSC Krasny Vostok Agro went down two steps in the rating to the ninth place, despite the fact that the volume of milk production on the holding’s farms increased by 5% (+5.6 thousand tons). The Green Valley Group of Companies left the top ten.

Belgorod holding Green Valley in 2020 increased milk production by 1.6% (+1.6 thousand tons) to 104 thousand tons, but this was not enough to remain in the top ten of the rating. The company went down from ninth to 11th place in the TOP 100 milk producers. It is noteworthy that Efko Group, which became a part of the shareholders and founders of the holding several years ago, decided to leave this project in 2021 and focus on plant products. In general, the TOP 10 companies produced 2.7 million tons of milk in 2020, which is 18% (+416.4 thousand tons) more than in the 2019 rating. The share of the top ten in the production of raw milk in Russia in 2020 was 13% (in 2019 it was 11.7%).

It is curious that the” second echelon ” of the rating (tens from 51-100 places) it grew faster than the first one. The fastest growth compared to the 2019 rating was shown by the penultimate ten of the rating (81-90 place), enterprises increased milk production by 30%.

The” second tier ” of the rating is regional milk producers, which show growth rates no worse than giants. The top ten companies with the fastest growth were led by Lipetsk LLC KoloSS, +71.2% (+36.9 thousand tons) to the level of 2019. The company plans to build a cheese factory with a production capacity of up to 23 tons of products per day. The player has moved from 86 to 51 places in the rating. Another example of growth is Sarmich Holding, whose farms produced 58.4 thousand tons of milk in 2020, by 70.2% (+24 thousand tons), more than in 2019. The company rose from 46th place to 26th. In the rating of the TOP 100 milk processors, the holding took the 15th place.

The holding company Zalessky milk from the Kaliningrad region rose from 28th place to 18th in 2020, the growth of milk production amounted to 43.4% (+22 thousand tons). There are quite a lot of newcomers in the rating who have entered the last ten: from the Leningrad region, CJSC Rabititsa Plemzavod (85th place) and LLC Bugry Plemzavod (96th place), LLC Base JV from the Republic of Bashkortostan (87th place), LLC Donskoye JV from the Volgograd Region (94th place) and LLC Molchnik (98th place) from the Kursk region.

Left the rating: Grand-NN LLC (93rd place in the last rating) from the Nizhny Novgorod region, Gomontovo Plemzavod JSC (100th place in the last rating) from the Leningrad Region, APK Rus LLC (96th place in the last rating) from the Ryazan region, Belgrankorm LLC (97th place in the last rating) from the Belgorod Region and Sovagrotech LLC (54th place). Someone has reduced the volume of raw milk production, someone has not grown enough to stay in the rating.

The companies of the dairy market, the first hundred and other players, survived the storm of 2020, but poor visibility remained in 2021, and even the market leader has problems with a tailwind.

In 2021, the growth of raw milk production slowed down. In the first half of the year (January-June) of 2021, 10.5 million tons of raw milk were produced in Russia, which is only 2% more than in the corresponding period of 2021. For comparison, in 2020, the growth of milk production in the first half of the year was 6.4% compared to the level of production in 2019.

According to DIA estimates, the volume of milk production in Russia in 2021 will exceed 21 million tons, an increase of 2-2. 5%. The future is preparing new challenges and the strongest, but not necessarily the largest players, will survive.

Read more at ©


Fashion for “nemoloko” and selling at a loss: an interview with the head of “Zalessky milk”


Andrey Romanov, the head of the Zalessky Milk Group of Companies, told about modern approaches to doing business, price restraint and the fashion for refusing milk.
— At the round table organized by the Royal Gate magazine, at the end of last year, you said that the marginality of sales of dairy products in the outgoing year has decreased significantly and some positions have to be sold at a loss. Has the situation changed?
– It has changed, the marginality has decreased even more. There are a number of positions that we are currently selling at a loss. In general, the marginality of both dairy farming and dairy processing continues to decline. The trends that developed at the end of 2020 have worsened in 2021. We continue to record an increase in the cost of high-protein feeds: soy meal, rapeseed meal, beet pulp. The cost of mineral fertilizers and packaging is growing. We are holding on with the last of our strength and are trying not to radically change the cost of our products yet. I want to emphasize that this is determined not by the cost of the product, but by the real solvency of the population. We produce social products, and this indicator directly affects our sales opportunities. The current state of affairs encourages us to look for new products, new markets. At the same time, it is impossible to work with such a falling marginality for a very long time, so we expect that the situation will somehow stabilize during 2021. Now a certain hope is inspired by the decline in the exchange rate, because there is still a fairly large currency component in the cost of our products.

– Digital labeling of dairy products began in Russia on January 20. From June 1, it gradually becomes mandatory. Does this label already appear on your products? How did this affect the price for the final consumer?
– Since June 1, labeling is mandatory for products such as cheeses and ice cream. “Mozzarella” and processed cheese, which we produce, are already labeled. We have invested and are acting within the new rules of the game. This did not affect the price of finished products, but we already bear these costs today.
— In your opinion, will these measures really help to defeat falsification? Have you ever encountered falsification of your products?
— The dairy industry has got into a very interesting situation. We have two product tracking systems working almost in parallel. The Mercury system, which was implemented by the efforts of the Rosselkhoznadzor and the Ministry of Agriculture of the Russian Federation, has already shown its effectiveness. The mandatory labeling system is a parallel system that controls only finished products. Before the introduction of Mercury, we had a problem with falsification. When, under the guise of dairy products, they tried to sell products using milk fat substitutes. “Mercury” has successfully worked out the problem. The task of labeling is the fight against counterfeit goods. When someone else produces products under the name of a well-known brand. This problem is irrelevant for the region. Maybe it is relevant in the country as a whole. Let’s see, within a year and a half it will be clear whether this has given something to the market and the consumer in terms of increasing transparency and quality.
— How many products of “Zalessky milk” are currently supplied outside the Kaliningrad market? How promising do you think this direction is for yourself?
— We are slowly growing. If in 2020 we had 8-9%, now it is 12-13%. The share of products will increase. The additional volume that appeared last year is primarily intended for foreign markets, because the Kaliningrad region is provided with milk. Of course, maybe we will introduce some new product lines, this is also being discussed, but this is not a prospect for 2021.

— What types of your products do you consider to be a priority?
— Here the consumer determines. We consider it a priority that the consumer buys more. Of course, the lion’s share of our line is still occupied by milk in different types of packaging. This is more than 50% of the total sales volume, our main locomotive, but there is a minimum marginality. For example, long-term sterilized milk is sold at a loss — this is how the market has developed.
— Are you planning to open a chain of your own stores?
– no. We discussed this ten years ago, when we started to engage in milk processing. We periodically discuss when we sum up the results of the year and make plans for the next one. After all, the consumer in the store should see the assortment. Making a store only with dairy products is pointless, and making a supermarket is a separate type of business that professionals should be engaged in. Today, the competition in the retail market is very high.
– Often local small cheese factories complain about the quality of raw materials. How do you rate it?
— This topic is separate, we were also very closely engaged in it at the time. They even planned to build a milk processing plant, but so far they have left this idea. Here the question is primarily about a serious technologist and building a technological process. Of course, some specific raw materials are required for cheeses. For example, we are ready to do this. Today, several small enterprises buy raw materials for cheeses. If someone has specific wishes and criteria specifying what indicators they need in milk, we are ready to work in this direction. These are issues of certain feeding diets and certain genetics. Now, using genetics, it is possible to form a herd in which there will be more raw milk.
— How do you feel about the growing interest in vegetable milk and the rejection of cow’s milk? Can vegetable products compete with traditional dairy products in Russia?
— It seems to me that sometimes people are led to openly advertising things. A person surrounded himself with domestic animals at the dawn of his life, and the cow was always there, she was one of the nurses. Why it suddenly became fashionable to refuse milk, I don’t really understand. Secondly — we do not feel that the demand for milk and dairy products is steadily falling. The trend for the appearance of dairy products not from milk is not so massive yet. Although the growth rates are quite high, they are high relative to the minimum base, which was, say, five years ago. Probably, in the future, these consumers will have some market share, but we do not see this yet.
— What areas do you plan to develop?
— First of all, this is a new project with our Moscow partners, the VMI company. The project is related to the production of exchange-traded goods, these are not B2C, but B2B goods, for further processing. It is planned to produce skimmed milk powder, whole milk powder, butter. This is a product that will go either to the rest of Russia or for export.
— Is the development of exports being considered?
— We are working with this constantly. We have products without preservatives, with a short shelf life. Here, the limiting factor for us is logistics. At one time, we were working on the market of Southeast Asia, China, but we are not yet able to enter there. Now we are discussing some reconstruction, the purchase of new equipment, which, due to new technologies and higher sanitary requirements, allows us to slightly increase the life of products without the use of preservatives. After that, we will receive new products, with which we will make another attempt to enter new markets.

— You are one of the mentors of the new season of the Business Battle startup competition, organized by the Western Press media Group. Why do you, an already successful entrepreneur, need this project?
— The very word “entrepreneurship” was born from “undertake”. You need to look ahead, learn new things that are not always related to your type of activity. For me, participation in the” Business Battle ” is primarily an acquaintance with the trends that exist in the youth environment in terms of entrepreneurship. I will not hide it, I told my team members this: despite the high rank of mentors, we ourselves learn, communicate, learn something new. This is probably the general philosophy of the project.
— As part of the previous stage of the “Business Battle”, you and another mentor, Evgeny Morozov, supported the participants who did not go further. What interested you in their projects?
— We have said that we are ready to provide certain, including financial, support for the implementation of these projects. They are, of course, relatively small, but interesting. I do not know how much they will shoot and will be economically profitable, but we will make such attempts.
The general partners of the Business Battle project are the government of the Kaliningrad Region, VTB Bank and the Institute of Business and Business Administration (IBDA) of the RANEPA.
Project partners: My Business Center, Kaliningrad Chamber of Commerce and Industry.

Organizer: media group “Western Press”
Partner material


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TOP-30 milk producers in Russia


GC “Rusmoloko”, APH “Zalesye”, GC “Agropromkomplektatsiya”, GC “Damate”- we have dramatically strengthened our positions by actively investing in the construction of new industrial complexes.



The three leaders in the production of commercial milk in Russia included the company “Rusmolco” with a yield for 2020 of 131 thousand tons. In the first place is still “EkoNiva” by Stefan Durr (924.7 thousand tons), in the second – the Firm “Agrocomplex ” named after N. I. Tkachev (312.1 thousand tons). The three leading companies together produced about 1.37 million tons of milk last year, or about 6% of the total commodity volume. This is evidenced by the data of the rating of the largest milk producers prepared by Soyuzmoloko, the Milknews news agency and the Streda Consulting consulting company.
The top ten in terms of raw materials production also includes the Agro-industrial holding “Doronichi” , the Holding company “Ak Bars”, “Kirov Dairy Plant”, the Concern “Detskoselsky”, “Piskarevsky Dairy Plant”, the Concern “Pokrovsky”, as well as the Agricultural Holding “Krasny Vostok”, which last year took third place in the rating.
“There have been serious changes in the positions of players even in the top five,” said Artem Belov, CEO of Soyuzmoloko. – Firstly, the positions of companies that actively invest in the construction of new industrial complexes – Rusmolco Group of Companies, Zalesye Agricultural Complex, Agropromkomplektatsiya Group of Companies, Damate Group of Companies have sharply strengthened. Secondly, there was a decrease in the volume of companies from Tatarstan due to the optimization of livestock. Third, all the players are successfully working to increase efficiency and increase volumes due to the increase in livestock productivity.” As a result, the most successful players, according to him, strengthened their positions. In particular, the success of “APK Prodprogram”, GC “Shakhunskoe moloko” and Agrogroup “Good Business” allowed them to significantly increase their positions in the rating.
“In general, the production of raw commercial milk remains positive, in 2020 the growth was 5%, up to 23.5 million tons, and in 2021, according to our forecasts, the volume will grow by another 3% – up to 24.2 million tons,” Belov believes. “However, an increase in the cost of production will lead to the withdrawal of small weak players from the market and its further consolidation.”
The Dairymaster company became the general partner of the rating of milk producers. The official partners are the companies “VERUMBIO”, “ATP TLP architects and Engineers” and “Zoetis”. The parterre of the rating is “Mustang of Feeding Technology”.

The agro-industrial Holding “Zalesye” takes the 17th place in the rating. Congratulations!

See the RATING of the TOP 30 milk producers in Russia Source:
© Milknews-Dairy market News







Happy Russia Day!

Dear friends,
congratulations on the upcoming holiday!
Happy Russia Day!
This is a significant day for all who are true citizens
and true patriots of Russia, who dearly love their country and are proud of its centuries-old history,
spiritual and cultural heritage, and work tirelessly for its prosperity.
This holiday is a great occasion to remember the importance of national unity.
Together, going to the goal, we are sure to find success, well-being and prosperity.
I wish you confidence in the future, good health, happiness, peace and goodness!

12 июня

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Let this majestic holiday fill your heart with bright feelings of hope and love, give you happiness and kindness.

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