Russian choc maker sets out ambitious expansion plans

By Jane Byrne

- Last updated on GMT

Related tags Chocolate Fudge Russia

Modernising production facilities and a factory construction project in the Ukraine will enable a hike in output and turnover of $100m, claims one of Russia’s leading chocolate makers.

The director general of CJSC Landrin, Igor Markitantov, told media outlet Interfax-Ukraine that the manufacturer is gunning for a turnover of $100m by 2012.

Upgrading production at its St Petersburg plant to the tune of €9 to €10m will increase increase chocolate egg production by 40 per cent, or 50 million units per year, he continued.

Markitantov revealed that the budget for the Ukraine build, over a three year period, will be €10m, with the objective being a factory with output totalling 50 million chocolate eggs per year here.

The director explained that Landrin is in talks with an Italian equipment supplier in terms of the Russian modernisation plan.

Indeed confectionery wrapping machine supplier Theegarten Pactec told this publication recently that Russia and the Ukraine have been the fundamental growth drivers for the firm over the past three years, citing greater affluence and increasing demand for Western style products in the region.

Steffen Hamelmann, communications spokesperson for the German equipment supplier, said that demand in those countries for its chocolate packaging machinery, in particular, has been significant.

Market dynamics

According to Datamonitor, the market for confectionery in Russia increased at a compound annual growth rate of 5.8 per cent between 2004 and 2009.

The sugar confectionery category led the confectionery market there, accounting for a share of 58.3 per cent.

Russia on multinational's radar

Meanwhile, January this year saw Nestlé sold its Russian confectionery division, Altai Confectionery, in a bid to focus on its core brands.

Private company Corminus Enterprises, which is headed by former Nestlé executive Igor Kubanov, acquired the business for an undisclosed sum. The transaction is expected to be closed in the second quarter of 2011.

"The sale of this company will allow Nestlé in Russia to focus resources on its well established core confectionery brands such as Kit Kat, Rossiya-Schedraya Dusha and Nestlé,"​ said Stefan De Loecker, CEO of Nestlé Russia at the time.

Nestlé acquired Altai in 1998. The plant, which produces confectionery under brands including Altai and Savinov, made around 17,000 tonnes of confectionery products in 2009.

The Swiss group has built up a strong presence in Russia over the past 15 years, operating 13 production facilities in the country, and has 10 sales offices and around 10,000 employees.

And in August last year, the food giant announced plans to upgrade its premium chocolate manufacturing facility in the Samara region of Russia, which will transform it into a key competence centre for confectionery products in Europe.

Related topics Manufacturers Emerging Markets

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