Coronavirus and home baking's renaissance in Cyprus

By Nick Thompson

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The EBRD and EU help Hadjigiorkis Flourmills respond to market changes

In a short space of time, the coronavirus pandemic has forced us all to adapt to new ways of living and working, often from within the confines of our homes. While some seek momentary respite through YouTube workouts, board games or gardening, others have embraced baking, reviving an ancient instinct to knead our own dough.

Hadjigiorkis Flourmills: a coronavirus case study

In recent years, the Bank has extended its support to flour producing company Hadjigiorkis Flourmills, through local and international advisory projects co-funded by the European Union’s European Regional Development Fund, launched by the Ministry of Energy, Commerce and Industry, and implemented by the EBRD.

Founded in 1945 by Savvas Hadjigiorkis, Hadjigiorkis Flourmills is a family business located in Frenaros, Cyprus. The company is run by third-generation family members including CEO Savvas Koshis, grandson of the company’s founder, and employs more than 85 highly qualified staff.

When coronavirus-related safety measures were first introduced in Cyprus, the business had to deal with a rapid increase in demand for its products as people rushed to procure basic provisions. Sales of its 1 kg bags of flour – produced then sold directly to supermarkets – surged, and the company has recently been able to resume selling to its largest export market, the UK, where demand for flour remains unabated. Savvas believes that these sales increases are being driven by the rise of home bread-making and baking more generally.

However, while this growing market has become more profitable, the company estimates that the overall decline in their sector will range from between 20 to 30 per cent, and that this is a best-case assessment.

In response, through international advisory projects, the EBRD is helping the company improve its sales and marketing strategy, which will be critical going forward.

The sector is at the mercy of external forces over which it has no control; however, Savvas remains upbeat and resilient, insisting that the company is in a good position to meet the challenge, noting that “Adopt, Adapt and Improve, is the way to respond to any crisis as serious as Covid-19.”

Impact on staff

Throughout the crisis, there has been a big emphasis on the health and safety of staff. Savvas says the company took “immediate and necessary measures as soon as the scale of the pandemic became clear.”

Employees were initially divided into two groups, working in two fortnightly shift rotations. Everyone was required to wear masks and use hand sanitisers, while employees in high-risk categories remained at home.

“The company’s well-established network facilitated communication among the employees and each department,” says Savvas, while “restrictions have also been placed on members of the public entering our premises, to minimise the probability of infection.”

The reorganisation of company staff was made easier by the delivery of local advisory project HR policies and procedures, which helped introduce these coronavirus-related adjustments more efficiently.

Local needs and investing in the future

The mill was initially conceived to meet the needs of locals and the current situation has served as a reminder of the company’s important role in the local production of wheat.

Even pre-coronavirus, in order to serve local customers in a more efficient way, the company had created a national distribution network for their products, providing availability throughout Cyprus.

In order to sustain products of the highest quality, Hadjigiorkis Flourmills has to continually invest in new technologies and follow market trends to stay ahead of the competition. Digitalisation is one area in which the owners plan to invest. Savvas says that “while face-to-face interaction can never be replaced, we always need to be ready to communicate using other methods to satisfy our customers.” This is true now more than ever, and the company will also be running new programmes in the future, such as contract farming, to help maintain its edge in the market.

During the pandemic Hadjigiorkis Flourmills has helped the community by donating products to several non-profit organisations and local municipalities, as well as funds to the Paralimni Hospital, which treats all Covid-19 patients in Cyprus.

It is clear that despite the present uncertainty and prevailing economic headwinds, Hadjigiorkis Flourmills has navigated the challenges posed by the crisis well so far, and the support from the EBRD and EU has helped plot a course for future growth.  

 

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