Lactalis buys its way into ex-Soviet dairy markets

- Last updated on GMT

French dairy giant Lactalis has grabbed immediate supremacy in two
former Soviet countries and paved the way for an expansion of its
own brand products after signing a deal to take over dairy company
FoodMaster International.

Lactalis will buy a 78 per cent stake in Kazakhstan-based FoodMaster currently held by US-based private investment fund Agribusiness Partners International (API), giving the French company a market lead in Kazakhstan and Moldova, where FoodMaster owns five and two dairies respectively.

FoodMaster is also one of the top four dairy companies in the Ukraine and claims that, across these three countries, 80 per cent of its target market recognises the company's name, something which has led it to predict sales worth $60 million in 2004.

This will give confidence to Lactalis, which is now able to move into these three countries with a considerable head start and almost immediate dominance by using FoodMaster's recently modernised production facilities and leading FoodMaster brand names such as Yoli yoghurt drinks and Kordai cheese.

Lactalis' director of communications, Luc Morelon, said that the company would also be looking to expand the presence of its own brands in the three countries, especially its flagship brand Président which is currently sold in 128 countries worldwide. He said there were good opportunities for growth in the region, especially in Kazakhstan.

Robert Peyton, president and chief executive officer of API's fund manager, Agribusiness Management Company, said that, conversely, FoodMaster could also benefit from the financial clout of Lactalis as a world-leading company.

"This transaction is considered by management to be a win-win situation for FoodMaster, its employees, the host countries of Kazakhstan, Ukraine and Moldova, as well as Groupe Lactalis. Our sincere congratulations to all parties involved,"​ said Peyton.

Lactalis, known as Besnier up to 1999, makes a range of products including cheeses, cream, chilled desserts and fruit juices under famous brands such as Bridélice and Société, with annual sales of around €5.5 billion.

The company is no stranger to buying into successful brands, acquiring in 2003 an undisclosed stake in Cema, another French-based company whose low-fat spread brand, Primavere, performed particularly well in 2003 as consumers began striving for healthier indulgences.

Related topics: Manufacturers, Consolidation, Lactalis

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