One of the largest Russian cheese producers — Bashkir group “Neral” (“Intel Ko”) of the former Deputy Minister Ernst Isaev will yield controlling stake in Belebeevsky dairy plant to the French company Savencia Fromage & Dairy. In exchange “Neral” hopes to obtain investment, production and access to the recipes of the four soft cheeses of well-known brands from the foreign shareholder, and become the largest manufacturer in the country. The amount of the transaction was not disclosed. The deal is expected to be closed after obtaining the consent of the FAS of Russia. Experts estimate the share tranferred to the French in the range of $15 million, the payback period of these investments for the foreign shareholder is five years. They believe that products of the joint venture in Russia will have stable demand, as of the major producer of soft cheeses in Russia.
JSC “Belebeevsky dairy plant” group “Neral” a large share of which is owned by former Deputy Prime Minister and Minister of agriculture of Bashkortostan Ernst Isayev announced the preparation to deal with the French manufacturer of the cheese company Savencia Fromage & Dairy in October. “Neral” intends to give the foreign investor a 51% stake in dairy plant in the hopes to expand the range of manufactured cheeses. The group expects to obtain from the French partner access to the recipe of soft cheese under brands Grand Blu (blue mold) and Santa Rosa, as well as necessary equipment for their production.
The Letter of Intent parties signed on 17 October, as per press-service of the French company. Due to the localization of production Savencia Fromage & Dairy expects to be “a key player in the cheese market” in Russia with a large portfolio of famous brands.
The transfer of the shares of Belebeevsky plant to Savencia Fromage & Dairy will take place after the approval of the transaction by the FAS of Russia. The second part of the package, the group plans to leave for themselves. “They are buying a stake and will work together with us,” he said. For the localization of production of soft cheeses: the shareholders are willing to jointly invest about 2.5 billion rubles.
As a result, the processing capacity of the dairy plant is expected to increase by 45%, from 550 to 800 tons of milk per day, the volume of soft cheese production to reach 4 million tons per year. Now Belebeevsky plant produces about 13 thousand tons of cheese per year, but these cheeses are of hard and semi-hard varieties.
“There is no serious competition in this market in Russia. Dairy plants make attempts in this direction, but their volumes are tiny small compared to our plans,” said Mr Isaev.
According to the analytical Agency BusinesStat, imports of soft cheese in 2014 decreased by one third in 2015 (73% of the year before), last year — by 20%. Before entering the food embargo on foods from Europe’s largest suppliers of these products were Denmark, France, Czech Republic, Austria and Poland. Later these supplies were “reaplaced” with soft cheeses from Belarus, Argentina and Brazil, but the market demand is not covered in full. According to the Agency I-Marketing, in 2016 domestic production of soft cheeses in Russia increased by 17% (to 33 thousand tons), but the overall structure of cheese production of this kind accounts for only 6%. In 2015, analysts noted a shift in demand with cheese from hards once in favour of soft cheeses.
Group Savencia Fromage & Dairy (until 2015 worked under the brand of Bongrain SA) ranks second in France and fourth in the world in terms of production of dairy products specializing on cheese and dairy specialities. In Russia the interests of the company date back to 1992, and company owrked through its subsidiary called OOO Bev. In 2016 the revenue of the Russian division of the group amounted to RUB 654,1 million with a net profit of 56.5 million rubles.
Belebeevsky dairy plant is in the top 10 largest Russian manufacturers of cheese. Also produces butter and spreads. Brands “Balster”, “Belfort”, “Bashkir honey”, “Blinniy”, “Uralskie prostory” and others. Revenue of JSC in 2016 amounted to 4.96 billion rubles, net profit — 578,5 million RUB. In the market of processing of milk the Bashkirian company takes 23.3 percent, according to open sources. The plant is located in town called Belebe (provides investors a number of benefits).