EBRD plans Ukrainian dairy investment

By Neil Merrett

- Last updated on GMT

Related tags: Dairy, Milk

The European Bank for Reconstruction and Development (EBRD) is
looking to tap growing potential in the Ukrainian dairy sector with
a planned acquisition of a 17.5 per cent stake in one of the
country's largest processing plants.

The direct foreign investment in the Shostka City Milk Factory, owned by French group Bel, will be used to renovate the plant to step up hard cheese production in the country, according to the bank. The EBRD's Anton Usov told DairyReporter.com that despite recent growth in the country's dairy industry, there remained plenty of room for growth in the market for processors willing to invest in infrastructure "Groupe Bel is a perfect example of a strong strategic investor, which can bring knowledge, resources and know-how to the country,"​ he stated. "Ukrainian customers will benefit from better quality and range of products available locally." ​Gilles Mettetal, EBRD director for agribusiness, claims that the investment in Shostka would allow for the introduction of new dairy products on the market, ensuring a wider range of high quality cheeses to better meet demand. To achieve this aim though, Mettetal added that an increase in the amount of milk available to the plant would therefore be vital in ensuring success for the development. The additional cash injection at the site is therefore expected to bring more capital and dairy farm support to rural areas in the country. The EBRD's entry into the country's dairy market could prove prudent timing, according to the group's research. In 2005, the dairy industry accounted for 1.6 per cent of the country's gross domestic product (GDP) amounting to $1.32bn. Between 2001 - 2005 dairy output has grown by 19 per cent to 2.3m tonnes in 2005. The growth was attributed primarily to demand for traditional dairy products like milk, which hold an 83 per cent share of the market. Hard cheese accounts for 10 per cent of the country's dairy sales, followed by yoghurt with four per cent and dairy desserts at three per cent, the company added.

Related topics: Manufacturers

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