Currently the number two player in a fragmented market that is led by the number one player Nestlé, Kraft said that the chocolate bar will be produced at a facility in the Vladimir region that belongs to Kraft Foods' Russian branch - ZAO Kraft Foods Rus.
Last year the company managed to increase its stake in the Russian confectionery market by 10 per cent, Vladimir Fomichey, director general of Kraft Foods Rus, said in an interview with the Russian national press.
Of its share in the confectionery market, the company says that its chocolate bars account for a 26 per cent share of the total market. Milka sales have been the driving force behind a lot of the recent growth, having more than tripled the volume of sales during 2003.
As with all industry in the country, the confectionery sector experienced a stalling period after the collapse of the economy in 1998. However, since then the market has been swift to pick up again and has been approaching annual growth of between 5 and 7 per cent.
That growth is now starting to show signs of levelling off as the economy starts to cool a little and market development matures, and this means that manufacturers such as Kraft and Nestlé are starting to concentrate on niches and major brands in an effort to continue their market growth.
Other smaller European chocolate producers are also pushing their popular western European brands into the Russian market, with German manufacturer Alfred Ritter recently opening a $20 million facility to produce its popular Sports chocolate bar brand.