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Danone to begin major project with Ukrainian milk producer

By Guy Montague-Jones, 04-Mar-2011

Related topics: Markets, Fresh Milk, Danone

Ukrainian argi-food business Astarta is starting “a large-scale joint project” with French dairy giant Danone in milk production and processing.

Astarta is the largest milk producer in the Ukraine as well as being a leader in the sugar market, with a 13 per cent share of domestic sugar production.

The agriculture business is now aiming to significantly increase the size of its dairy operations.

Mykola Kovalski, director of business development and investor relations, told DairyReporter.com that the exact details of the project with Danone have not yet been finalised. But the project could involve the building of a new milk production facility or something on an even larger scale.

Kovalski said around 80 per cent of milk in the Ukraine is currently produced by small farmers with just a handful of cows. He said Astarta is an exception in operating a large scale farming model with its own forage supply.

The business development director said that despite being a highly promising dairy market, milk production in the Ukraine has actually declined in recent years due to lack of investment and little interest from big business.

Development plans

That is now starting to change. Astarta itself is aiming double its own milk production over the next five years. Kovalski said this goal is achievable irrespective of the project with Danone.

Astarta CEO Victor Ivanchyk said in a statement: “As the largest manufacturer of industrial milk in Ukraine, Astrata is planning a further active development of this business segment, which we consider to be very promising.”

As for Danone, the company is increasing its commitments in the Ukraine. It is already one of the largest dairy product manufacturers in the country, with 8 regional offices in the country and a ‘Danone Dnipro’ factory in Kherson. The French dairy business extended its presence in the country last year following its merger agreement with Unimilk – a €1bn a year dairy company with production sites in Russia, Ukraine, and Belarus.