COVID19: EBRD advice for Cyprus flourmill to help cope with 20-30% decline

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A rapidly growing flourmill in Cyprus is coping with a downturn in business due to the coronavirus crisis and is adapting to the ‘new normal’ resulting in the new trend of ‘home baking’ because of lockdown measures with advice from the European Bank of Reconstruction and of Development.

Hadjigiorkis Flourmills, a third generation family-run business in Frenaros, is one of 56 small to medium-sized enterprises that has tapped into an EBRD-supported fund of €390,000 that is subsidising consultants to help restructure or re-organise companies.

Advice for Small Businesses (ASB) Facility is a three-year initiative implemented by the EBRD on behalf of the Ministry of Energy, Commerce and Industry since May 2017, to support Cypriot SMEs in improving competitiveness, strengthening performance and boosting growth. The programme is co-funded by the European Regional Development Fund (ERDF).

Heading the Hadjigiorkis Flourmills, established in 1945, is CEO Savvas Koshis, grandson of the company’s founder, Savvas Hadjigiorkis, and employs more than 85 highly qualified staff.

When coronavirus-related safety measures were first introduced in Cyprus in March, 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-kilo bags of flour 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%, 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.”

Throughout the crisis, there has been a big emphasis on the health and safety of staff.

Savvas Hadjigiorkis said the company took “immediate and necessary measures as soon as the scale of the pandemic became clear.”

Employees were initially divided into 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,” said the CEO, while “restrictions have also been placed on members of the public entering our premises, to minimise the probability of infection.”

Even pre-coronavirus, in order to serve the company’s important role in the local production of wheat in a more efficient way, Hadjigiorkis Flourmills had created a national distribution network for their products, providing availability throughout Cyprus.

The company continues to invest in new technologies and follow market trends to stay ahead of the competition, while expansion and growth are being helped by innovative programmes such as contract farming, to help maintain its edge in the market.

During the pandemic Hadjigiorkis Flourmills has also been engaged in 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.