Danone continues closing its Russian assets
The Group of Companies Danone closes its dairy plant in Russia for the second time during the last month.
According regional Mass Media, the plant Novosibirsky (structure of Danone’s division Sibir) will stop operating from September, 1st 2014. Earlier the company made a decision to close within three months its plant Danone Volga, ZAO in Tolyatti (Samara Region) – group’s first site in Russia.
From 2006 Novosibirsk plant belonged to Unimilk; in 2010 Danone and Unimilk have agreed to merge their dairy businesses. Market experts believe Danone is implementing a realpolitik, all decisions are taken in its Paris office and aimed to build the company’s long-term development strategy. Termination of Novosibirsk plant – is an attempt to enhance the efficiency of production, to concentrate production in regions, where it is possible to produce products with high margin.
As Danone representative in Russia Valeria Trifonova told The DairyNews, the company’s organization policy allows it to evaluate fairly the existing possibilities for further development of this or that enterprise. According to her words, the group keeps to the strategy of production capacity growth and qualitative improvement. The company looks forward to update the existing capacities where it is possible. The Novosibirsk plant equipment will be transferred to the plant in Kemerovo.
Novosibirsk Region – is a region, where agricultural products processing is hard to organize, say market participants. By the way the milk price there is one of the highest in Russia, government support is not enough what impacts the cattle population, its productivity and milk quality. By the way the market is highly influenced by seasonality of milk production there.
Meanwhile, the company doesn’t plan to close any of its remaining plants in Russia in the nearest future.
