Produkty Pitania Company is on Russia’s side. Lessons by a Croatian businessman
— 2004-10-01 —

We once again touring the Kaliningrad factory constructed by Produkty Pitania Company.

Produkty Pitania President Stefano Vlahovich is our guide.

The president of the company is a Croat. He was born in Trieste near the Croatia border. He speaks over three languages. So Mr. Vlahovich gave an explanation in Russian with a soft southern accent.

Several facts from his biography: having received some prestigious diplomas, he began the business by importing chickens and other foods to Russia. However, soon through careful calculation he decided that better economic feasibility would be available if he organized his manufacture locally.

The management of the firm was careful in approaching project strategy development. The above economic reasoning was considered along with Russian gastronomic traditions and low solvent demand combined with the need to diversify family meals with modern courses. The Croatian team of top managers was convinced that tasty meals should not be exclusive to western inhabitants. This is the reason for the program slogan of Produkty Pitania: “Affordable high quality product for a reasonable price."

“I doubt that registering as a Russian entity would entail any advantages,” says Stefano Vlahovich. “A western firm importing foodstuffs into the country aiming to reduce costs is compelled to offer standard product. We, those who work here locally, understand better what meal Russians will prefer. It's clear to us that the problem of Russian food market’s flexibility exists at different levels of solvent demand in different regions. Our purpose is to enrich culinary range of Russian families, to offer them an opportunity to avoid dullness in their meals.”

Construction of the whole complex of the company is not yet complete. However, today the factory produces 340 tons of delicious products a day. From the very beginning the company decided to create of distribution centers across Russia. Today such centers operate in Moscow suburbs and in Kuban. Construction of facilities in Novosibirsk is in its final stage.

The company President says Produkty Pitania will deliver its products throughout Russia all the way to Vladivostok and Kamchatka.

Produkty Pitania follows its strategic slogan and operates three trade marks and produces almost forty convenience products, ready-made products and ready-to-eat dinners. These meals are designed for Russians with different food expenses, i.e. average, high, and low income consumers. The quality of the goods thus remains invariably high.

The emphasis is made on quality. Only high-class professionals work at the factory.

The governor of the Kaliningrad region, Vladimir Egorov, describes Produkty Pitania as the major foreign investor in the economy of the region. He emphasizes that it has already created 1,800 workplaces.

The factory uses advanced equipment which is custom-made by the best European and international manufacturers. After the fourth building is in place the construction phase will be complete. Then the factory will be certified under EU requirements.

When asked about the potential expediency of producing their own raw materials, Mr. Vlahovic said the best food processing experts are employed at the factory. Production demands completely different competencies. Such a transition would involve a number of additional professionals that would grow, store and deliver grain and other raw products and so on.

The turnover of the company exceeded $100 million within a project funded by European Bank, after which the Bank rated the company at the higher level.

Mr. Vlahovic believes that understanding the rules of the game is crucial for people doing business and investing in Russia. It is also important to be sure that these rules are in place for a long time and that they will not vary...

Konstantin Mesentsev
Krestyanskiye Vedomosty
Moscow - Kaliningrad - Moscow