Russia looks to Vietnam and Thailand as $3.7bn dairy projects get off the ground

By Jim Cornall contact

- Last updated on GMT

Vietnam's TH Group has started work on one of the dairy projects it is working on with Russia.
Vietnam's TH Group has started work on one of the dairy projects it is working on with Russia.

Related tags: Russia, Milk

With a ban on EU dairy products entering the country, Russia has been busy on the dairy front this week, announcing the launch of two dairy projects and starting work on another.

Work commenced Wednesday on a facility being built by Vietnam’s TH Group in the Volokolamsk district of Moscow province.

It came the day after TH signed an agreement to invest $190m to build three clusters of dairy farms in the Kaluga districts of Ulianov and Mosacalsky.

TH Group is expected to invest a total of $500m in the first phase of the $2.7bn project to enhance modern dairy farming and milk processing in the Russian Federation.

This is the first Vietnamese project for the production and processing of milk in Russia.

Moscow work under way

At the the Volokolamsk district groundbreaking ceremony, Vietnamese Prime Minister Nguyen Xuan Phuc said, "Russia is a huge potential market for milk. The deployment of the project in the province of Moscow contributes significantly to the region's agricultural development, creates more jobs for local people, as well as Vietnam workers in the Russian Federation, creating a new image of efficiency and the diversity of the areas of cooperation between Vietnam and Russia."

Kaluga plants

TH will model the Kaluga projects on its $ 1.2bn facility in Nghia Dan district (Nghe An).

Technology utilized will be sourced from Afimilk, GEA, DeLaval and BouMatic, with some Russian equipment also being used. TH says it will provide all technology solutions, equipment, breeding, milking and management.

The first TH dairy products are expected in the Russian Federation by mid-2017.

Upon completion of the ten-year project in phase 3, TH says it expects a total milk processing capacity of 5,900 tons/day – equivalent to nearly 1.8m tons/year – and plans to establish a distribution chain to 300 True Mart stores throughout Russia.

Cooperation with Thailand

Alongside the TH Group projects, the Russia Direct Investment Fund (RDIF) announced Wednesday it had signed an agreement with Thailand's Charoen Pokphand Group to construct a $1bn milk and dairy complex in Russia’s Ryazan region.

Banner Infant Dairy Products Company, from China, is also a partner in the project.

Russia is the second largest importer of milk in the world, accounting for approximately 12-15% milk trade worldwide.

Related topics: Markets, Emerging Markets, Fresh Milk

Related news

Show more