French food and beverage giant Danone has announced plans to invest RUR2.8 billion (US$85 million) at its Yalutorovsky facility in Siberia.
Work on the plant, which is located in the Tyumen region of Russia, is set to commence this year and continue until 2015.
According to Danone, the facility upgrade will enable the group to manufacture 'modern' dairy products in Russia, such as desserts, functional drinks and yoghurts. The revamped factory is to feature a new boiler, a sewage treatment plant and an updated system for the separation of milk collection.
Production capacity is expected to increase by around 40%, with up to 1000 tonnes of milk to be processed per day on completion of the site upgrade.
According to a spokesperson for the company, Danone is looking to increase fresh dairy consumption in Russia, which currently stands at around 6.3kg per person annually - far less than the average recorded in Danone's home market of France, which has hit around 36kg per person annually.
Commenting on Danone's second-quarter sales yesterday, the company pointed to 'double-digit' sales growth in Russia and in North America as a driver of fresh dairy growth.
Sales at Danone’s dairy division gained 2.6% on an organic basis as people ate more Greek yoghurt in the US and Prostokvashino products in Russia, offsetting weak demand in Europe.
© 2013 - ESM: European Supermarket Magazine by Ellen Lunney
