Even in difficult times, international providers demonstrate confidence in the Russian market

Rubber weakness, falling oil prices, and tense political situations are currently weighing on the Russian market for packaging and processing technology as well as for plastics and rubber technology, but they have by no means brought it to a halt. In Russia and neighboring countries, there remains a significant need for investment; interest in modern machinery, production and processing equipment, and high-tech materials continues to be very high. Especially the domestic food and packaging industry is challenged to improve its own competitive position in order to substitute imports. Entrepreneurs and industry experts therefore want to learn about innovative technologies and maintain or establish new business relationships with suppliers, even if investment projects cannot be realized in the short term.

Accordingly, there was great interest in the two leading trade fairs for the packaging and processing industry as well as for plastics and rubber, UPAKOVKA/UPAK ITALIA and interplastica 2015. Around 19,000 trade visitors from Russia, all regions of the CIS, and neighboring countries attended both events. Many were regular visitors, but there were also representatives from companies that see new sales opportunities for their products due to market changes. From January 27 to 30, about 950 exhibitors from 35 countries presented their offerings at the Moscow ExpoCenter in Krasnaya Presnya.

"Given the current difficult conditions, we are very satisfied," summarizes Werner Matthias Dornscheidt, Chairman of the Management Board of Messe Düsseldorf, the course of the events. "The many international exhibitors demonstrated with their participation in UPAKOVKA/UPAK ITALIA and interplastica that they still have great confidence in the Russian market. The unexpectedly high number of trade visitors has rewarded this commitment, confirming the great importance of these two events for their industries. At a time when political conditions are complicating economic relations, we were able to contribute with our two major technology fairs to ensure that business connections are not broken." Messe Düsseldorf organizes these two trade fairs together with its subsidiary Messe Düsseldorf Moscow OOO, with UPAKOVKA/UPAK ITALIA in cooperation with the Italian organizer Centrexpo.

Visitors use the four-day trade fair to gather comprehensive information about the international offerings. Overall, it was expressed that the presence of globally operating companies is highly valued. The exhibitors, for their part, mostly expressed satisfaction with the interest from professionals, given that many Russian companies are currently facing major challenges. Particularly, the financing of projects, as was unanimously heard, has become extremely difficult and is especially hard on medium-sized and smaller companies.

The German suppliers of food and packaging machinery remain the most important suppliers for Russian companies – about one-third of all machines used here are of German origin. Russia is also ranked third among the most important sales markets for German manufacturers. Even more significant is the market share for confectionery machinery – here, 60 percent of all equipment is "made in Germany." In the first eleven months of the past year, exports were still doing well, with German deliveries up six percent over the previous year. Large shipments, especially in the beverage sector, made a positive impact. According to a survey by the VDMA Food and Packaging Machinery Association in October 2014, around 70 percent of the member companies surveyed reported that the crisis in Russia was having a significant impact on their business: fewer inquiries and orders, projects being postponed.

Vera Fritsche from the VDMA Food and Packaging Machinery Association assesses the current situation as follows: "There are still many projects in the Russian market that are promising for German machinery manufacturers. Investment is especially needed in food production and packaging, as food imports need to be substituted – a situation that was already emerging before the embargo. Major problems for Russian companies are the weakness of the ruble and high credit interest rates of 30 percent and above. Some German manufacturers are therefore offering financing models to their long-standing customers. There is also renewed interest in retrofit solutions and used machinery." Many German manufacturers, Fritsche notes, have been in business for a long time and maintain good customer relationships that they want to preserve even in difficult times. "UPAKOVKA/UPAK ITALIA is the best platform to stay in contact. The Russian market still has great potential; a retreat is currently out of the question for any of the German companies. Of course, there is also great uncertainty on both sides regarding the political future of relations and the economic impacts. We have to assume that there will be a significant decline in business activity this year."

Lucia Lamonarca, COO of the Ipack-Ima/Centrexpo Group, also assesses the long-term prospects for Italian companies as positive but confirms the current restraint when it comes to concrete contract closures: "Italy is the second most important supplier of packaging, processing, and finishing technology for the Russian market after Germany. In the first eleven months of 2014, deliveries from Italian manufacturers still increased by 3.2 percent compared to the same period the previous year. Customers visit the fair, are interested, and would like to invest in expanding their systems with innovative technology, but financing remains a huge problem. Many Italian providers use UPAKOVKA/UPAK ITALIA not only to showcase their new products and services but also to signal to their customers that they want to stay in contact, especially in difficult times. The strong Italian participation in the fair, with numerous direct exhibitors and local representatives, confirms an established position in the local market and is a clear sign that it continues to be highly valued. Many Italian providers are also looking for Russian partners to have a better presence in the country. In this regard, UPAKOVKA/UPAK ITALIA remains the best event."

The professional program "Future Forum – Trends for the Russian Market" in Hall 2.3 once again received positive feedback. In this trend showcase, selected exhibitors presented their innovations, with a focus on topics such as disposal and recycling of packaging and packaging materials. Industry visitors could discuss market needs and solutions directly with the providers.

The next UPAKOVKA/UPAK ITALIA will take place from January 26 to 29, 2016, again parallel to interplastica.