May 27, 2011

Rigas Piena Kombinats receives investment from Andrey Bezkhmelnitsky

Andrey Bezkhmelnitsky, the Russian businessman, who has become a financial investor for Latvia's biggest dairy corporation, Rigas Piena Kombinats (RPK), will put in EUR14.9 million (US$21.1 million) in the organisation, according to the media.

"This is the amount by which the RPK share capital will be increased. It is a major investment and a rare case in the Latvian dairy industry and the national economy," RPK representative Irena Berzins said.

It is planned that the investment will be spent on both acquisition of new equipment and milk production.

RPK board member Janis Ceics said that the given financing was very large and would contribute to development of RPK in milk, cheese and ice-cream segments.

"The company plans to develop those three business lines gradually to strengthen its positions not only in Latvia and the Baltics but also to expand exports. With such major financing, many doors will open for us not only on the domestic market but also in other countries," Ceics said.

The RPK found itself a financial investor in late March this year but the amount of the shares acquired by Bezkhmelnitsky has not been made public.

The Latvian dairy company was looking for an investor to raise funds for introduction of new technologies and expansion of exports to Russia and the CIS which was necessary to ensure further business development and stable profit in long term.

Bezkhmelnitsky has been a shareholder and the director general of Russia's biggest dairy company Unimilk between 2002 and March 2011, and is expected to continue working for the company also after the takeover by the French company Danone.

RPK is one of Latvia's leading dairy companies. Baltijas Lase holds a controlling stake in the company. RPK has reported a LVL1.45 million (US$2.9 million) loss for 2010 in contrast to profit a year before, while its turnover has grown by 28.6% to LVL53,536 million (US$107.1 billion).