Food Union to invest €11.1m and build center of excellence for fresh dairy products in Latvia

By Jim Cornall

- Last updated on GMT

Food Union is to complete a new center of excellence in Latvia by 2020.
Food Union is to complete a new center of excellence in Latvia by 2020.

Related tags Latvia Dairy products Curd

Latvia’s Food Union is investing €11.1m ($13.4m) to build a center of excellence for fresh dairy products over the next two years.

The first phase will include the construction of a new production house at a cost of €2m ($2.42m), and the purchase of new production equipment for €2.85m ($3.4m), aimed at developing new and innovative products and expanding their range.

Also it will include the concentration of all production in one place in the Latvian capital, Rīga, at the AS Rīgas piena kombināts company site.

Transfer of production

An investment of €6.25m ($7.55m) will allow for the transfer of production at another Food Union group company, SIA Rīgas piensaimnieks, to AS Rīgas piena kombināts, and to upgrade current infrastructure at AS Rīgas piena kombināts.

Normunds Staņēvičs, chairman of the board of AS Rīgas piena kombināts, said the timing was significant, coming on the 90th​ anniversary of the establishment of the company, which split into two companies in 1963, one on each side of the Daugava River, as it reunifies the two companies.

Construction of the center of excellence will take approximately two years. In 2018, the plan is to purchase two new curd snack production lines and one new line for drinking yogurt in new packaging.

Increasing capacity

Staņēvičs said the company was planning to increase production capacity, to expand the range of products, and to strengthen Food Union brands in the market.

Staņēvičs said production of the curd snacks, Kārums, in the existing facility has reached capacity.

“We cannot produce more curd snacks on the existing lines, as well as the development of new products with the existing technologies and in the existing premises is very limited,”​ Staņēvičs said.

Artūrs Čirjevskis, member of the board of SIA Rīgas piensaimnieks, said the demand for the curd snacks continues to grow both in Latvia and abroad.

“Besides, we see a great potential to develop this category in new formats. Therefore the transfer of curd snacks and other Kārums products to new, fresh and spacious premises, as well as an access to the latest technologies will enable us to create innovative products with double capacity to please our customers,”​ Čirjevskis said.

Looking for new plant owner

In 2019, the plan is to start the transfer of the entire production of SIA Rīgas piensaimnieks to the newly built center of excellence, thus concentrating both the production of fresh dairy products and ice cream in one place.

This will allow the company to make the production processes more efficient, to simplify logistics, to reduce costs in the long term, and to focus more on product innovations.

The new center will be completed at the beginning of 2020, with a new owner for the existing facility at SIA Rīgas piensaimnieks being sought.