October 21, 2011


Russians show interest in Baltic dairy industry


The Russian business people are showing interest on the Baltic dairy industry, the Eversus.It news reported.


Andrei Beskhmelnitskiy, a Russian businessman who is linked to Danone-Unimilk, in March purchased Rigas Piena Kombinats (RPK), one of Latvia's biggest dairy producers. Analysts have no doubts that his interest in the Baltic countries will not be limited to this acquisition, it wrote.


"The Russian capital's expansion may reach Lithuania through Latvia. To protect ourselves, it is very important that raw milk prices in our market are not lower than those in other markets and that our processors are able to make products at competitive prices from that milk," it quoted Alvydas Zabolis, the managing partner of Zabolis Partners, as saying.


Information about the RPK acquisition deal is scarce. It is not clear if Beskhmelnitskiy himself purchased the shares or through a company.


"Lithuanian dairy companies are not buying Latvian or Estonian processors, because potential acquisitions in these countries are not profitable enough to compensate for the amounts of money that the sellers of these companies want to receive," Eversus.lt quoted Tadas Povilauskas, a Finasta analyst, as saying.


It is expected that Beskhmelnitskiy will help RPK to get its products into Russia's vast market, and first of all, in Moscow and St. Petersburg. As a result of this, RPK should start buying more milk.


If this scenario proves to be true, that would have an impact on Lithuanian dairy producers, which import significant amounts of milk from Latvia.

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