July 2 2008, 09:06

Hortex will freeze vegetables in Voronezh

Polish company Hortex Holding S. A. has been searching the facility for the production of frozen fruits and vegetables in Voronezhskaya region for more than a year; now the company is almost close to the project implementation. The holding management and the Regional State Administration signed the agreement about the construction of the factory of 25,000 tons/year capacity worth to more than $ 25 mln. The analysts of this industry point out a high demand for frozen fruits and vegetables; they also think that Hortex may face problems with the raw material purchase.

Andrey Sobolev, the Chief of the Main Department of the economic development of the region, informed about the signed investment agreement. According to Mr. Sobolev, Polish company is intended to construct the plant in the region which is to produce frozen fruits and vegetables with 25,000 tons/year capacity. He says that the investments to this project are likely to amount to at least $ 25 mln. At the present moment the process of the land plot selection for the to-be-constructed plant is almost over; most probably, Hortex plant will be located in Bobrovskiy district. Sergey Posledov, Deputy Chief of the Main Department of the economic development of the region specifies that Polish investor does not plan to grow fruits and vegetables to satisfy the needs of the enterprise; the management counts on the raw materials provided by the local producers. Mr. Posledov adds that Hortex is intended to produce first shipments in the first year since the beginning of the construction. The negotiations with the investor have been lasting for around a year.

Svetlana Fedorova, General Director of the analytical company "Express-Obzor" estimated the share of Hortex company to amount to 50-60% on the national market. "The company still does not possess the own production facility in Russia (the products are frozen on three plants in Poland - "Kommersant")", Mrs. Fedorova reminded. That's why the construction of this plant has been expected for a long time. Right now the company has to compete with the foreign and Russian brands ("4 seasons" for example), and also with the private labels of the retail chains; almost all large food retailers started to sell frozen products under own trademarks. Naturally, the reduction of the expenses is urgent for Hrotex like never before; the delayed opening of the plant is able to affect the positions of the holding".

Maxim Klyagin, the analyst of "Finam Management", believes that Voronezh project may be very cost efficient, up to 30%. To his opinion, the investments to Hortex plant will pay back in 4-5 years. "The annual growth rates of the market of frozen fruits and vegetables amount to 10-15%; we do not see the serious basis for the considerably decreased rates of this market growth in the coming years on the background of the global trend of the price increase for food products", Mr. Klyagin said. Also, the expert observed that the level of the competition increases on market, also because of the large foreign players entering the market of Russia; several international corporations, Bonduelle in particular, have opened the own production facilities in Russia.

Sergey Lukshin, the General Director of Trade House "Morozko" informed that his company will provide logistics services for the Hortex in the Central Chernozem region. According to him, the respective agreement has been already signed. "The demand for frozen fruits and vegetables is high - Voronezh along consumes 100-150 tons per month", Mr. Lukshin specified. However, Sergey Lukshin forecasts Hortex to face problems with raw materials. "There may be problems with the purchase of the needed volumes and with the product quality", Mr. Lukshin explained. Natalya Polshkova, General Director of Trade House "Voronezh Prodintorg" (which specializes on the wholesale trade of frozen products) agrees with him. To the contrary, Ivan Matvienko, the Representative of the Main Department of Agrarian Policy is sure that the local producers are able to provide Hortex with raw materials. "Three thousands of hectares have been allocated for vegetable production in the region past year; this figure was 1,500 ha in 2000. The gross harvest of fruits and berries was 84,400 tons; the harvest of vegetables amounted to 30,000 tons just in the agricultural enterprises and farms. The insufficient number of the sales markets hampers the development of this industry. I hope Polish plant is able to partially solve this problem", Ivan Matvienko told.

Polish company Hortex was founded in 1944. The full name of the company is Hortex Holding S. A. The company produces juices, frozen vegetables and fruits; there are more than 200,000 tons of products per year. The company generated profit of $ 4.3 mln., the revenues of around $ 263.7 mln. in 2006. According to the own data of Hortex, it occupies the share of 40% in the production of the frozen vegetables and fruits in Europe. The foundations related to Bank of America own more than 93% of the company.