"They are attracted by the image of endless fields": how Omsk pasta conquered China and Vietnam

What and where does Omsk export? What familiar goods are being sent abroad as exotics? The Omsk Region Export Support Center is launching a series of materials about Omsk companies successfully conquering foreign markets. The first example is pasta with a Russian flavor on the packaging, which was enjoyed by residents of Asian countries.

We are talking about JSC Omsk Pasta Factory, which produces products under the Dobrodeya trademark. Andrey Mamonov, the company's manager for the foreign market, told how the company managed to establish exports to Asian markets, what difficulties it faced and how much the mentality affects trade relations.

How old is the company? How did we start production?

The company has been in existence since the 70s. It was a planned economy, working for the needs of the state. In the 90s, the factory received a rebirth, the Dobrodeya trademark appeared. We have purchased Swiss equipment and launched new production lines. They began to produce flour. We were gradually gaining momentum in terms of sales volumes, capturing territories across the country. In the early 2000s, they entered the markets of some foreign countries — Kazakhstan, Mongolia, Tajikistan.

Are you well known in Russia? In which regions are you present?

Our positions in the country are stable. One way or another, we are present in all regions, but greater reach requires greater production capabilities. The most popular brands can afford to stand in every store in every city. Our volumes are still smaller. In Omsk, we are represented in absolutely all segments, and we work more in other regions through distributors, entering some local networks, retail, and partly wholesale. As for federal retail chains, the task of expansion is now underway, but within the framework of production capabilities. We are currently present in federal networks in three regions — Omsk, Yekaterinburg and Tyumen.

When did you decide to export?

There has always been a desire, and it has partly worked out — with the same Kazakhstan and Mongolia that are next to us. We have also been working with Tajikistan for a long time, albeit intermittently. And it became possible to export en masse in 2015, when the dollar rose sharply. Previously, we could not afford to enter the same Chinese market — the difference in exchange rates did not allow. Our flour and our products were very expensive for the Chinese. If they were sold there, it would be in a minimal volume. Accordingly, when the ruble became cheaper, our product became more accessible there. We have entered the huge Chinese market. Not immediately, of course. We started with one wagon of flour per month, and a year later we switched to two wagons. And last year, about 2 thousand tons of flour were already sold. Deliveries to Vietnam have been launched since last year.

 

Are our wheat pasta in demand in China?

Pasta to a lesser extent, they really like our flour. It is considered environmentally friendly (and this is true), and it is appreciated, despite the fact that it is much more expensive than the local one. We supply flour regularly and in good volumes. It's a slightly different story with pasta, while we're trying to gain a foothold in this direction. Pasta in its classic form, pasta, is not much eaten in China — they are bought mainly by foreigners and young people. The indigenous people are used to their noodles. It can be rice or wheat, but it differs from ours — white and flat. But we are trying to move forward. A few years ago, there were the first tentative attempts to interest the Chinese in our pasta, we shipped several containers in a year, but this did not develop into a long-term cooperation. Since this year, we have been trying to gain a foothold there with small shipments of pasta. There, spaghetti, spiral, feathers, oddly enough, a children's alphabet, and bows are in demand from the types we are familiar with. And, for example, horns, which every child knows here, are perceived as exotic and absolutely not popular there.

And Vietnam?

We discovered Vietnam in 2019 thanks to the Export Support Center. We went to an exhibition in Ho Chi Minh City and found a worthy partner there, agreed on supplies. And this is the second year we have been working with him, entering new retail chains, capturing new territories. Of course, we have a limited assortment — so far we only supply spaghetti — but we are already standing in almost all significant cities in Vietnam. The next step will be to expand the product line, we will offer mass items — spirals, children's assortment.

How did you start working with the Export Support Center? How else did he help?

He helped me quite seriously. In principle, it was a discovery for us that such a center appeared that helps exporters. We started cooperating in 2017, when they offered to visit the exhibition in China for the first time, and we found new partners at the first exhibition. At that time, we had already started deliveries to China, and thanks to this trip, many customers were transferred to an existing distributor, which allowed us to increase sales. Then in 2018, together with a large delegation from Omsk, we went to an exhibition in Shanghai, where we also had fruitful contacts on pasta and flour. We have already established a second distributor in China, and the volume of supplies has begun to grow. We also participated in Russian exhibitions, Prodexpo and others, where we found Russian clients. And we are especially grateful to the Export Support Center for Vietnam, because it was only thanks to it that we discovered this market for ourselves. We didn't even have plans to look for partners there on our own.

How much are you currently exporting in numbers?

Last year, we supplied about 2 thousand tons of flour to China. We only supply pasta to Vietnam, about 50 tons of spaghetti. Mongolia — 600 tons of flour per year, Tajikistan — 700 tons, Kazakhstan — 400 tons. In terms of flour, we have already exported almost 10% of the total volume. The pasta is much smaller.

Is the trademark abroad the same, or are you adapting it to local standards?

We don't adapt it, on the contrary, it is very well received there. Our brand is a kind of personification of what the Chinese want to see in the product — Russian beauty, endless Russian fields, natural wheat grown in environmentally friendly conditions. That's what gets them hooked.

What difficulties do you face in foreign markets?

The main point is economic. There is no stable grain situation in Russia, we are heavily dependent on nature and weather conditions — either excessive drought or excessive humidity. Often, when there is not enough quality wheat harvest, the price increases. This slows us down, including in the development of foreign markets. This is the main thing. All other points, including customs, do not cause problems.

Is there any difficulty because of the difference in mentality?

We have several Chinese partners. There is complete mutual understanding with some of them: probably, this is due to the fact that they are located in border regions, understand our mentality better, and speak Russian themselves. And there are partners from deep in China. There are difficulties of a mental nature: they have their own vision of the processes, we have our own. For example, we strive for scheduled shipments — just a little bit, but every month - in order to plan production volumes. They don't fully understand this. They may not show themselves in any way for six months, and then say: "Give me a thousand tons of flour at once." It's technically difficult to implement, and it takes a while anyway. And then there is a misunderstanding: "We order a lot from you, why don't you want to give it to us?" But economic nuances also play a role here. In Russia, tariffs for transportation and rail transport are regularly increasing. Depending on the harvest, the cost of wheat may vary. In China, everything is stable in this regard. Therefore, it is difficult for them to understand why our price increases periodically.

Do you have to immerse yourself in culture, learn traditions, and ceremonies in order to communicate more effectively? After all, Eastern cultures are sensitive to this.

This is necessary because some elementary things for us can offend them, and seriously. Even the form of greeting is that he shook hands incorrectly or started hugging, which is not welcome on their part. Or they changed something in the packaging without agreeing with them — there are various formalities related to customs clearance. At their level of perception, this can be regarded as an insult, they treat it very reverently. It is necessary to take into account the mentality, without this it will be difficult to move forward.

Are you considering other markets for export?

When everything is fine — there are no exchange rate nuances, the sales situation in Russia is stable, and China is active — then we no longer have the production capabilities to cover new markets. Under standard conditions, we sell everything we produce. Naturally, if new production opportunities appear, we will step up and look for new territories.

Has the pandemic affected your development plans?

At the beginning of the journey, when everything was uncertain, essential products were sold out at a rapid pace, including ours. We felt both a sharp surge in sales and a certain drop afterwards — not to say that it was a big one. The situation is now stabilizing, and we are working as usual. As for the development plans… Now more attention needs to be paid to stabilizing the situation, because the time is not easy. Both people and manufacturers have a misunderstanding of what will happen next. Now we are not talking about some kind of large-scale development. The priority is to strengthen positions in retail chains — apparently, this is due to the fact that the product is more accessible to the masses in connection with the pandemic. That's where the main buyer is now, the main sales.

What are your suggestions for improving conditions for exporters?

Now, as far as I know, the tariff policy is also being supported, and rail transportation to the Asian destination is being subsidized. It would be better to work out these points. As far as I know, difficulties arise, it takes a long time to reimburse the tariff, and it is difficult to receive a subsidy. The assistance of such structures as the Export Support Center is very important here. In any case, a lot depends on government support.

Help: You can also use the services of the Export Support Center free of charge: translation of materials into foreign languages, organization of participation in international exhibitions, business missions, search for partners abroad, placement on international trading platforms and much more. Learn more on ved55.ru in the "Services" section. The Center carries out activities within the framework of the implementation in the Omsk region of the national projects "Small and medium-sized entrepreneurship and support for individual entrepreneurial initiative", as well as "International cooperation and export".