Leaf to expand into Russia

- Last updated on GMT

Related tags: Baltic sea, Russia, Leaf

Finland's leading confectionery company, Leaf, has said that it is
to build a factory in St. Petersburg, Russia, for the production of
functional pastilles and lollipops.

Leaf has had a foothold on the Russian market for some 10 years now, but this is the first time the company has attempted to manufacture its own products there. The facility will manufacture Mython lollipops, part of the company's line of functional confectionery.

Currently Europe's second largest confectionery manufacturer, Leaf has not revealed the total cost of the project. The company has an annual turnover of €3.4 billion and is a part of international confectionery and bakery group CSM, which in the first half of 2003 reported a profit margin of €85.8 million.

Leaf said that, as the major shareholder, CSM will fund the St Petersburg project, adding that its aim was to increase both productivity and competitiveness in that market.

Mynthon is currently the leading brand in this fast-growing sector and once the St Petersburg facility is up and running the company hopes that it will be able to meet all the current demand within the Russian market from that facility. A new marketing campaign will also be launched, aimed at lifting the brand's market share even further.

Leaf says that at present it controls approximately 15 per cent of the market for functional lollipops and pastilles - a market segment which experts say will grow by 20 per cent a year. The company estimates that in order to achieve a 30 per cent share of the market, it will have to set production at 3,000 lollipops per year.

Leaf currently has 16 factories in Europe and exports its products to 20 countries. Last year the company reported making 20 million kgs of confectionery products. Nearly half of it went for export to countries such as the Baltics, Russia, Scandinavia, Germany, the Middle East and Canada.

Related topics: Ingredients, Emerging Markets