October 11 2007, 11:10

"WBD" plans the purchase of productive assets in Eastern Europe, USA and China

Yesterday David Yakobashvili, the Chairman of Director Board of "Wimm-Bill-Dann" company announced that the company is considering the possibility to purchase production capacities in foreign countries: he mentioned the priority markets of Eastern Europe, China and USA. The development plans in CIS countries are also in action. Mr. Yakobashvili stressed that WBD is interested in the assets worth to $1-1.5 billion. The market players think that the company has enough resources to purchase foreign assets and occupy its niche on new markets.

Opened JSC "Wimm-Bill-Dann. Produkty Pitania" produces dairy products, juices, sparkling water and baby food; it consists of 36 enterprises in Russia, Ukraine, Kirgizia and Uzbekistan. The main trademarks are "Lyubimiy Sad" (juices), "Essentuki" (sparkling water), J-7, 100% Gold, "Domik v Derevne", "Milaya Mila", "Chudo" (dairy products) and "Agusha" (baby food). According to US GAAP, the net profit in the first half of 2007 amounted to $65.8 mln.; the revenue was worth to $ 1.147 billion.

In its comments to the company's interest to Eastern Europe, USA and China markets, David Yakobashvili told RBK daily about the absence of the definite plans of purchases in these countries. However, the company is constantly studying the opportunities and perspectives of these markets, he added.

To the opinion of the analysts and market players, Chinese market is of the greatest interest. "Many Russian producers, we in particular, are considering these markets, because milk consumption is increasing there by very high rates", Omar Sultanov, the Director on marketing and sales, "Foodmilk" company, said. "WBD can afford buying the already operating enterprise with a good brand portfolio". According to "Brokercreditservice" estimations, the size of the ready dairy products market in China amounts to $ 8.4 billion per year, baby food market brings $ 6 billion per year. The niche of the traditional dairy products has been already occupied in Europe and USA; WBD might successfully promote the product characteristic for Russia, kefir for example, Mr. Sultanov says.

Tatyana Bobrovskaya, the analyst of "Brokercreditservice", advises that the company would better not to focus much on USA market: "All segments, where WBD operates, have been already occupied in the USA; and, the growth rates of milk market are rather slow there". However, Iryna Yarotskaya, the analyst of "Otkrytiye" FK thinks that the company may try to introduce itself in yogurt segment and possible in cheese production of the USA.

WBD company is not the first Russian dairy company interested in the foreign production capacities. So, the producers of baby food "Nutritek" owns the plant of powdered milk production in New Zealand; the company plans to launch the production of fortified powdered milk in Malaysia. "The next step will be the creation of a good raw material base. New Zealand is the best country to do it: the seasonality is limited there, and the weather conditions are good", Alexey Bogatyrev, the Director on relations with investors, "Nutritek" company, points out.

In addition to the development in foreign region, WBD plans include the purchase of several dairy enterprises in CIS countries, primarily in Ukraine and Kazakhstan. According to Mr. Yakobashvili, WBD is interested in the purchase of dairy assets worth to $1-1.5 billion of the production capacity of 100 tons/day; the company is negotiating with several companies. "If the company enters Kazakhstan market, it will buy the market leader. The sum of $1.5 billion will make it quite real", Mr. Sultanov is sure.