Mohan Shrestha, Director General of the Meat Industry Carnex: It has been shown how important it is for each country to have its own food production
Media: Magazine Nedeljnik
- How has coronavirus affected your business activities – practically and strategically?
Like the others, we also were caught by the pandemic, so we had to focus on the most important things at the moment: the health of employees, maximum protection and uninterrupted continuation of production to meet the needs of the market. As usual, work in the meat industry requires the strictest standards of hygiene and safety, which has prevented the spread of coronavirus within the work environment, and with additional measures we have effectively provided physical distance and prevented contacts of employees from different shifts. The meat industry did not have a decrease in demand for its products, even at the beginning of the epidemic there was a huge jump in demand, especially for canned food (ready meals, pâté, cold cuts), because people provided food stocks with products with longer shelf life. Even at the peak of increased demand, Carnex has managed, with the responsibility and commitment of employees, optimal planning and efficient supply chain, to meet market demands. The strategy of vertically integrated business systems has proven to be a great advantage, because it provides the entire production process, from raw materials to the finished product, so that Carnex has never had difficulties in procuring raw materials.
- How important is it in such situations, during a dangerous disease pandemic, to build trust among your consumers in terms of product safety and security and how did you do it?
Consumers are increasingly opting for the most needed products and choosing brands from them that they trust, and they trust them because they have never been let down by quality. This is the strength of our connection with consumers, because Carnex is a brand that is trusted, which is confirmed by decades of consumer choice, especially when it comes to traditional products such as pâté, cold cuts or hot dogs. These times have confirmed that such a brand will always remain the first choice.
We expect that in the future, for the very reason of the smaller volume of purchases and the focus of consumers on what they need most, one of the criteria will certainly be “best buy”, which means quality at an affordable price. Carnex provides exactly that to consumers – the highest quality products at an affordable price.
- In which way did the coronavirus revise your plans for 2021??
The corona virus has ruined our plans at least a little, but it has had the greatest impact on slowing down the projects started in 2020. That is why we have planned numerous new products in different categories for 2021, a new line for ready meals, as well as marking the 50th anniversary of pâté, which will be redesigned. Liver pâté is a feature of Carnex, it is a combination of tradition of taste and quality of trust, which we carefully nurture, with innovations and new recipes that we also develop as a leader. We apply this principle in almost all categories, for example, the category of ready meals includes our traditional dishes, which have been awarded many times, but also the tastes of the world that bring new challenges and trends and have a huge group of consumers.
In particular, we will invest in the resources of the organization in which development and investment are what pushes the company forward. As in these unpredictable market circumstances we have a good financial result, in 2021 we have planned to increase EBITDA by another 10% and profit by about 5%.
- Do you see this social context as an opportunity or as a stumbling block in the race with other major European manufacturers?
During the epidemic, it was shown how important it is for each country to have its own food production. In periods of high demand from several different markets, when it is not possible to respond to all requests at the same time, it is quite natural that a domestic producer, as a priority, chooses to supply the domestic market where families, friends, business partners and compatriots live. In the context of a pandemic, I would not competitively compare the competitiveness of Carnex with meat industry producers from Europe or the world, but the fact is that many, large producers from the USA, Germany, Canada, France, Australia, etc. had major problems due to the epidemic and failed to maintain continuity of production.
When it comes to market expansion, there is interest in our products, especially in the EU, Russia, Asia, but we also need the support of state institutions, primarily the Ministry of Agriculture and the Veterinary Administration, because it is necessary to establish interstate protocols between the exporting country and the importing country. I am sure that the institutions of the Republic of Serbia will soon enable placement on the markets of other countries, because it is of great importance in this period of record low market prices of pigs in Serbia, which aggravates the situation in pig breeding, slaughter industry and meat processing industry.
Also, as the import of pork and meat products has been growing for a long time compared to exports from Serbia, without support for the production chain of primary pig producers and slaughterhouses and meat processors, Serbian production will be smaller, instead of using the chances of possible export placements. Therefore, more effective subsidies in animal husbandry should be considered, which will be based on the quality of cattle, e.g. percentage of meatiness.
- What is the strategy for further expansion of your business outside Serbia in the moments when the whole world is hermetically sealed? How important is the meat industry in something called “fighting the economic consequences of the coronavirus”?
Due to the great needs for pork and interest in our products, the countries with which the bilateral-technical and legal framework for opening cooperation should be established as a priority are China, with which harmonization began in 2014, Malaysia, South Korea … Export potential only for the Chinese market is between 50 and 100 million euros annually.
Carnex has products whose quality can compete with the best manufacturers anywhere in the world. This has already been shown on the Russian market, which is still one of the largest and most important, where we have been present for a long time and have been awarded many times. For example, at the prestigious fair in Moscow, we last won five gold medals and one silver medal. Carnex is also present in Europe, with pâtés and ready meals, and our products are on the shelves in Australia and Kazakhstan. We have ambitious plans for the next period and further expansion, because we are focused on export markets.
If it is known that the total annual turnover of the first 10 producers of the meat industry in Serbia is over 600 million euros, it is clear how important it is to support the meat industry, and that again means support not only for large producers but also for small farms and families living from the meat industry.
- Can our products be competitive with European ones?
Serbia really has quality meat products, which is why we were one of the initiators of the Association for the development of quality of meat and meat products, which was founded in 2016 and has six members – Carnex Meat Industry Vrbas, Meat Industry Topola, Yuhor, Zlatiborac , Neoplanta and Moritz. The association is focused on the protection and promotion of higher quality meat products on the Serbian market and the certification of the label “Serbian Quality”, which is awarded by the Ministry of Agriculture. In this way, Serbian products are protected, which with their special properties clearly differ from products of the same category, and are produced from domestic raw materials and have a quality higher than products of the same category in terms of relevant regulations and standards. This is especially important for one of a kind education of the domestic public, because it encourages the strengthening of trust in domestic quality, and certainly in order to promote Serbian quality at the international level.
We are extremely glad that three of the eight certified products are Carnex: Carnex Homemade Meat Bacon, Rustic Sausage and Homemade Sarma.
- Except in the economic sphere, where does Carnex still exert its influence? How important is social responsibility towards the community which you are an integral part of (in some parts its initiator) and where do you see your role?
The MK Group and Carnex are companies deeply committed to caring for and supporting the environment and the community, especially to healthcare. Carnex is particularly active in solving the problems of the local community and health protection, and to that end, two years ago we invested 70,000 euros for the construction of a caesarean section in the hospital in Vrbas. At the local community level, we especially support sports activities and other educational and environmental actions together with the city and local institutions.
As a Company that is among the largest food producers, we fight hunger and food waste, and strive to help vulnerable groups as much as we can. In that, we are partners with the Food Bank, to which we have donated about 60 tons of products in the last three years, worth about 220,000 euros, and thus provided at least one meal for about 360,000 people.
Part of our social responsibility that we are especially proud of is energy efficiency and environmental protection. Carnex is one of the first companies in general to recognize the importance of the wastewater problem and back in 2012 we invested more than 2.5 million euros in the construction of a wastewater treatment system. Today we can proudly point out that completely purified water of appropriate quality is discharged into the Delta I-64 of the Grand Bačka Canal.
