November 6, 2013

Danone partners Damate in milk project in Russia

Danone, the largest producer of dairy products in Russia and Russian agricultural holding Damate Group will partner in a dairy project, including the construction of several dairy farms in the Tyumen region and the Bashkortostan Republic.

Danone intends to provide financial support to these projects and bring knowledge and expertise in order to make them more efficient. The volume of investments of Danone in Russia has reached more than US$1.6 billion since the start of its operations. All milk produced by these farms will be sold to Danone factories.

The agreement was reached at a meeting between prime ministers of Russia and France, who signed an Agreement of Intentions to implement the project.

Yves Legros, CEO of Danone Russia, noted that "When working with milk producers, our priorities are sustainable mutually beneficial cooperation and development together. The project we launch with Damate fully corresponds to that strategic priority. It will help to increase production of high quality milk and enhance standards of the dairy farming in Russia".

Naum Babaev, chairman of the Board of Damate, underlined that "This project as well as other initiatives undertaken by us with leaders of agriculture market is aimed at the long-term perspective. Our team has been cooperating with Danone fruitfully since 2007. It is extremely important for us that Danone brings not only financial support to this project, but also participates in its design and management".

Andrey Danilenko, chairman of the board of the National Milk Farmers' Union, stressed that "We are facing the decline in milk production in Russia and decrease of cows' amount. This trend could be overcome by construction of new state-of-the-art facilities aimed to produce high quality milk in big quantities. We are looking for strong state support of such initiatives".  

Since 2007, the Damate management realised a serious of successful projects including a greenfield project in raw milk production, LLC "Russian dairy company". In 2012, "Russian dairy company" launched a strategic partnership with one of the world's largest agricultural companies, Olam International. After the successful completion of the transaction with Olam International, "Russian dairy company" was split into two independent companies -  Rusmolko and Damate. Rusmolko has been fully integrated into the management model and the global strategy for Olam Interntional.

Damate, on the other hand, has focused on the strategy of accelerating development and creating conditions for federal leadership in high-margin segments of the Russian agricultural market. Currently Damate Group owns one of the largest Russian vertically-integrated systems for the breeding and processing of turkey, a dairy plant, and about 30 million hectares of arable land.

The volume of investments of Danone in Russia has reached more than 1.6 billion USD since the start of its operations. Its mission in Russia is to bring health and happiness to every home. Today the Group have 22 plants and about 15 thousand employees in Russia and produce dairy products under such brand names as Prostokvashino, Activia, Actimel, Rastishka, Tyoma, Danissimo, BioBalance, Actual, Smeshariki, Danone, etc.