Factors influencing the decline in product output in the processed foods sector

摘要

Analysis of the performance of food processing enterprises in Russia since 1993 indicates a progressive reduction in output. Causes include inflation, increased reliance on expensive bank credit, high tax burdens, ageing plant, increasing settlementarrears, falling incomes, import competition, and changes in consumer preference. By 1996 there had been an overall reduction of 63.9%, though the rate of decline was beginning to lessen. Ready meals and dishes, which constitute 64-68% of production, should, given existing profitability of 8-12% and appropriate adjustment of the product range, generate appreciable profits. Cereal and coffee products, representing respectively 20-28% and 6-10% of the total, require a more flexible approach by commercialservices to developing links with purchasers. Output of children's and special diet foods is very low and needs substantial capital investment, together with tax concessions, because of its social importance. In general, processors should gear themselves to those products which generate at least stable profits, advertise, win new markets, strengthen existing ones, and keep abreast of changes in demand, researching the reasons for these if necessary. If finances allow, the importation of new technologymay be advisable.