Information for fruit and vegetables business in CIS
Hipp is constructing plant for fruit and vegetable production in Kaliningradskaya region
German producer of baby food, Hipp company is constructing a plant for fruit and vegetable puree production in Kaliningadskaya region. Yelena Voytekhovich, the Deputy Chief of Press Service of the Regional Government informed "Vedomosti" about this fact, which was also confirmed by Yevgeniy Shuryak, the manager of raw material direction of Hipp company in Russia. According to Mrs. Voytekhovich, the plant will start working in summer 2008; by 2009 it will be able to produce 20 mln. of jars with puree per year with the perspective of the production to increase up to 200 mln. jars/year. The investments will amount to EUR 10 mln. Mr. Shuryak confirmed these figures.
According to Mrs. Voytekhovich, Hipp plans to contract potato and carrot production in Kaliningradskaya region in order to control the process of raw material growing. Mr. Shuryak added that the company is interested in purchases of cabbage and pea. One of the distributors of baby food says that now Hipp sells 12-15 mln. of items in Russia for more than $30 mln. Hipp has not confirmed these figures yet.
According to Euromonitor, Russian market of baby puree annually increases 26% in value terms. It may amount to RUR 7.9 billion ($319 mln) in 2007. "Pediatrists recommend to begin with puree as supplementary feeding, and a growing number of parents choose for industrially produced purees", Alexey Uzhanov, the Regional Director of Decna AS (Semper supplier) explains the segment growth. Hipp's share in the segment of puree is 8.8% according to the estimations done by Euromonitor. To the opinion of Andrey Dembikov, the General Director of "Ost-Union", the company will be able to sell 20 mln. of jars per year. "Sivma" was earlier the exclusive distributor of Hipp in Russia ("Babushkino Lukoshko" trademark). Yesterday the representative of the company made no comments regarding the format of the future cooperation with Hipp. "The question will be if Hipp is able to retain the position in premium segment for the puree produced in Russia", Oleg Ochinskiy says, the Vice President on Marketing and Sales of "Nutritek".