Wimm-Bill-Dann Foods, the Russian dairy and fruit juice company which is thought to be a possible takeover target for Danone, is continuing its rapid expansion with the investment of more than $31.7 million (€27.6m) in its dairy business.
In a move which is likely to make it all the more attractive to western investors, the company has embarked on an a major modernisation programme, installing new production lines at dairy plants in central and southern Russia. The aim is to improve operating efficiencies and ensure that Wimm-Bill-Dann's products continue to meet the highest quality standards, the company said.
WBD has installed two new production lines for sour milk at its Lianozovo Dairy Plant as part of a $12 million investment there. The new production lines will give products a longer shelf life, and have a capacity of 200,000 bottles or between 90 and 180 tons per day, WBD said.
The new lines will be used to produce enriched drinking yoghurts under the brands Bio Max and Neo, Wimm-Bill-Dann's new brand, in 0.9 litre and 0.45 litre containers, as well as traditional dairy products under the Domik v Derevne and Milaya Mila trademarks.
Meanwhile, at the Timashevsky Dairy Plant, one of the largest in Southern Russia, WBD has completed the refit of its low-fat foods production facility and begun the production of soft curds. A new production line for yoghurts is currently being fitted which will have a capacity of 100 tons per day. The overall investment in the Timashevsky Dairy Plant is $ 19.7 million.
The modernisation and refitting the Timashevsky facility will add additional capacity (150 tons per day) for the manufacture of low-fat products under the Domik v Derevne, Kubanskaya burenka, Doctor Bifi and Frugurt brands. In addition, the soft curd production line, which has the capacity to produce 30 tons per day, will see increased production of the Chudo, Frugurt and Bio Max brands.
These investments were undertaken primarily in the course of 2002 and are the latest step in a continuing modernisation programme encompassing both the company's existing and recently acquired facilities, said WBD. The programme is aimed at ensuring Wimm-Bill-Dann's dairy products continue to adhere to the highest international standards of quality, a move all the more necessary if the company is to continue to solicit interest from companies in the west.
Last month, WBD confirmed that it had approached French group Danone with a view to negotiating a possible takeover. Although Danone has a small stake in the Russian company (around 7 per cent), Danone has denied that it is interested in increasing this in the immediate future. It has, however, pledged to increase its share of the Russian dairy market to 20 per cent by 2008 - a move which would be facilitated considerably by the acquisition of WBD.