Europe, Russia and The Middle East

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Europe, Russia and The Middle East

• Richard Ali
• Phoenix November 8, 2001

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Total US Pork Exports To Europe and Russian
Regions

• In 2000 Region Accounted For 4 of total U.S.
  pork exports
• By August 2001 this had increased to 8
• Exports to area forecast to grow by over 500
  between 2000 and 2008 (around 14 of total pork
  exports)

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Europe

• European Union, Western Europe, Central Eastern
  European Countries

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Market Snapshot - Economy

• Population
• EU 373 million
• CEECs 121 million
• Poland 39 million
• Romania 22 million
• Hungary 10 million
• Bulgaria 8 million
• Switzerland 7 million
• EU and Western Europe growth forecast around 1.6
  in 2002
• CEECs growth forecast 3 in 2002

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Market Snapshot Consumption / Import

• Consumption
• EU 44.4 kg / year (imports 1)
• (processing, offals petfood)
• CEECs 40.1 kg / year (imports 4)
• Poland 47.2 kg (US processing, offals)
• Romania 28.3 kg (US processing, offals)
• Hungary 51.4 kg (US processing, offals)
• Bulgaria 33.0 kg (US processing, offals)

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Tariff Rate Quotas
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The Euro Effect
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Europe Pork Objectives

• Build buyer loyalty among targeted importers,
  distributors and processors in the region
• Increase the purchase of U.S. pork loins and
  tenderloins by up-scale and trend-setting
  restaurants

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Europe PorkStrategies

• Build relationships with European importers and
  processors and facilitate contact with U.S.
  suppliers to establish supply chains for U.S.
  pork.
• Demonstrate the profitability of continuously
  purchasing U.S. pork to processors with emphasis
  on yield, consistency, availability and
  suitability.
• Promote U.S. pork in trend-setting restaurants
  and hotels through targeted menu promotions.

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Key Strategic Questions

• Why Activities In Europe? Isnt it a small
  market?
• Europe, both the EU and CEECs, is a vast market
  with huge potential. A barrier to entry in the
  CEECs is establishing distribution channels.
• The EU has a massive impact on the rest of the
  world. USMEF plays a key intelligence (eg BSE,
  FMD, GMOs) and representational role on behalf of
  the U.S. pork industry.

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Key Strategic Questions

• European traders are important in moving product
  to the FSU and beyond. (eg USMEF assisted a UK
  trader source US pork for its established
  customer base in Korea)
• Europe is a major competitor as well as a market.
  USMEF provides competitive information.

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U.S. Pork Exports To Bulgaria

• Trade Teams
• Pork Processing Consultant
• Account Development
• Salted pork lower tariff
• Duty-free quota, work with importers / FAS

13
Russia

• Russian Federation, Commonwealth of Independent
  States, Baltic States

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Market Snapshot - Economy

• Population
• Former Soviet Union 291 million
• Russia 147 million
• Baltics 7 million
• Ukraine 50 million
• Other 87 million
• Economic Growth Forecast
• 2001 4.9
• 2002 4.0

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Market Snapshot Consumption / Import

• Consumption
• Russia 11.3 kg (imports 30)
• US pork for processing (picnics, trims, hams.
  (retail trade) Pork livers)
• US share of Russian pork and pvm imports forecast
  at 9 for 2001

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Russia Pork Objectives

• Build demand for U.S. pork in the processing
  sector in Russia.
• Test market selected and underutilized cuts that
  are well suited to the Russian wet market system.

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Russia PorkStrategies

• Convert Russian processors from trial users of
  U.S. pork to continuous users.
• Test market selected underutilized cuts that are
  well suited to the large Russian wet market system

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New York Sausage
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New York Sausage

• First Russian-made sausage containing and
  advertising 100 U.S. pork
• Trial in May / June 2001
• Registered Summer 2001
• Launched November 2001
• More products to follow.

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Key Strategic Questions

• USMEFs Main Target Market in Russia Is For
  Processing. Is this the Best Use of Resources?
• Russian import restrictions mean that the
  majority of US pork has to go for further
  processing.
• Around 60 of Russian demand is for sausages

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Key Strategic Questions

• 70 of pork and pork items consumed in Moscow and
  St. Petersburg are from imported product
• US pork industry has surplus of underutilized
  (processing) cuts
• Need to build relationships to ensure continuous
  purchases of US pork overcome resistance to
  identifying US pork

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Black Sea Cold Store Update

• Bulgarian Company Acted on USMEF study
• Currently Refurbishing Site
• Freeport access to Balkans, Southern Russia,
  CIS