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September 6 2007, 12:17

Polish largest juice producer enters Ukrainian market

Kommersant Ukraine informs, Polish beverage producer Maspex Wadowice Group decided to launch own production capacity in Ukraine although the company earlier claimed to purchase Kyiv "Rosinka" enterprise. The periodical got information that a new plant worth to EUR 50 mln. will be constructed in the village Grigoryevka, Kyiv region. Yuri Kolbasyuk, Deputy Chairman of Kyiv Region State Administration, told to the periodical that Maspex company would construct its first Ukrainian plant - juice producer on the territory of the bankrupt sugar plant in the village Grigoryevka, Obukhov district, Kyiv region. "Maspex has already become the co-founder of Ukrainian company which purchased sugar plant after its bankruptcy. They need only the decision of the session of Grigoryevka Village Council to complete the legalization of the property ownership right of the company for the land plot. The Council promised to consider this question till the middle of the next week " Liliya Bilyk, the Chief of Economics Department of Obukhov district told Kommersant Ukraine. According to Mrs. Bilyk, Maspex plant will be constructed on 50 ha plot; the investments to the construction will constitute about EUR 50 mln. "There is a plan to launch enterprise in three years. It will produce juice under Maspex trademark", she told. Maspex company made no comments to Kommersant Ukraine yesterday. Maspex Wadowice Group was founded in 1990; it is the leader of the market of juices, nectars and beverages in Poland, Czech Republic, Slovakia, Bulgaria; it is the second large producer of alcohol-free beverages in Hungary. Also, this group is the largest producer of coffee products in Central and Eastern Europe. Their major trademarks are La Festa, Lubella, DecoMorreno, Cremona, Kubus, Tymbark, Caprio, Carotella, Dex. Maspex income was $668 mln past year. Till the present moment the company has been importing only coffee products to Ukraine. We'd like to remind that mid May Maspex was going to purchase Opened Joint-Stock Company "Rosinka", Ukrainian producer of beverages and juices. However, that time the company gave up the idea to make this purchase, as ""Rosinka" owners failed to fully guarantee the fact that the ownership right for the company would not be claimed by its former owners" (see "Kommersant" issue dated June 13th). End June French company Orangina Group purchased 100% of "Rosinka" for $60-65 mln. The experts point out that, logically, Maspex company would better purchase one of the local players in Ukraine. "I cannot understand why they decided to enter this market independently. Not less than $ 30 mln. should be spent for marketing and distribution to gain at least one percent of Ukrainian juice market", Igor Landa, the Director of "Sandora" company says. Sergey Lesik, the Director of Galt & Taggart Securities investment company agrees: "One percent of Ukrainian juice market cost around $14 mln. to PepsiCo company when it bought 100% of "Sandora" leader of juice market for almost $670 mln". To the opinion of Andriy Yarmak, the Manager of "Agrooglyad: Fruits and Vegetables" project, in addition to the large expenses for marketing and distribution, the new market player will also face serious problems in raw material purchases, otherwise it will have to produce juices exclusively on the basis of the imported concentrates. But, several companies have already been occupied in such business in Ukraine. "The construction of juice producing plant in Kyiv region is not the smartest solution, as this region is characterized by a very powerful freshmarket of fruits and vegetables: the prices for the raw materials for juice production will be too high. Also, one of the highest deficit rates in Ukraine for all types of fruits and vegetables (which may be used for juice production) is observed in Kyiv region. So, if the company is going to produce juices on the basis of Ukrainian raw materials, it will have to purchase fruits and vegetables at a distance of 400-800 km from the plant, so that the company will have to pay too much" the expert thinks. "If Maspex company produces juices on the basis of imported concentrate, it will be very complicated to find a niche on Ukrainian market", A. Yarmak adds.