The fall of the embargo

Milk co-founder of the business, "Unimilk" Andrew Beshmelnitsky seriously affected by the introduction of the food embargo Russia a year ago. This is the company's Food Union, which the businessman with partners established in 2012, two years after the sale of "Unimilk" French concern Danone. Now the Food Union - the leader in the Latvian market of drinking milk products (according to Euromonitor International, a market share exceeding 46% in 2014). But the case of shaken after the introduction of Russian grocery kontrsanktsy - because of the company's supply restrictions in Russia (in value terms) were reduced by half, said RBC Chairman of the Board of Rigas piena kombinats (enters the Food Union) Normunds Stanevichs.

Exports to Russia were one of the most important directions of Food Union: «Specially developed for the Russian market of cream cheese, oil and frozen products", - says in the answers to the RBC Stanevichsa request.

According to the company, the share of exports in 2013 accounted for almost half of group turnover - 46%, the share of Russia in total exports Food Union35% left. In the first half of 2014 exports to Russia accounted for more than half of total exports. But after the introduction of Russian embargo on the import of dairy products from the European Union in August 2014 Food Union supplies in the Russian Federation only ice cream (it is not included in the list of banned products).

"The Fall of supplies to Russia after the embargo was a significant and unexpected, and it had an impact on the financial performance of 2014," - says Stanevichs. Revenues within the company dairy companies Rigas piena kombinats and Valmieras piens in 2014 amounted to € 118 million (growth in comparison with 2013 year amounted to 5%). Their net loss amounted to € 6,3 thousand. The ban will affect the supply and on the results of this year, says the manager.

Sam Andrew Beshmelnitsky did not want to talk with RBC reduction in deliveries to Russia: "There is nothing good to tell, we can not now."

Latvia after the Russian

Andrew Beshmelnitsky partners founded "Unimilk" in 2002. In 2010, when the company took the second place after the "Wimm-Bill-Dann" in the Russian dairy market,Beshmelnitsky partners ceded control of "Unimilk" French Danone. Following the transaction, the Russian owners received about € 120 million.

Andrew Beshmelnitsky takes 172 th place in the final ranking of the richest Russian businessmen Forbes with a fortune of $ 450 million.

Dairy business in the Baltic States Beshmelnitsky began to create in 2011, bought the largest Latvian milk processor Rigas piena kombinats. In 2012, the businessman has combined it with the third-largest processor of Latvia Valmieras piens. Now Andrew Beshmelnitsky, "international businessman of Ukrainian origin," the company calls the sole owner of Food Union.

The product line, which supplied the Food Union in Russia, does not overlap with the range of «Danone-Unimilk", said RBC's source close to Beshmelnitsky. "As long as I have related to« Danone-Unimilk ", my personal projects will not compete with this company", - said Beshmelnitsky "Kommersant" in the summer of 2012. Beshmelnitsky included in the Board of Directors of JSC "Danone Russia."

Heading for China

« After the Russian embargo we would have to hold a series of measures in order to adapt to the new situation on the market ", - said Stanevichs. According to him, the company has followed a dual strategy - to increase sales of finished dairy products in Latvia and the Baltic States, as well as increase the volume of exports to the already mastered export markets and find new ones. "Among the new markets China is a priority for us", - says Stanevichs. The company is also interested in Asia as a whole, the CIS countries and the Middle East: "These are regions with a deficit of dairy products, which need such products, which Latvia can easily offer."

In October 2014 Food Union bought the business of manufacturing ice cream Estonian company Premia Foods. The deal amounted to € 27.1 million and the site says Food Union. The press release stated that the purchase is allowed Food Union to become the leading company for the production of ice cream in the Baltic region: "The purpose of the transaction - to significantly expand operations in the Baltic countries and Russia, and to combine the leading regional ice cream brands under the group of companies Food Union».

Also in the second half of 2014 the company started to export its products directly in the eight new countries - the UK, Iceland, Ukraine, Uzbekistan, Mongolia, Lebanon, Libya and the United States, he told Stanevichs. In May this year the Food Union made a trial supply of ice cream in China.

China is now - "in the spotlight", Stanevichs says: "We have already sent to the first cargo of ice cream and very soon begin to trade in the most prestigious department stores in Shanghai." However, he Beshmelnitsky believes that the talk after the first batch of the prospects of this is premature. President of the Sino-Russian analytical center Sergei Sanakoyev doubt that the Latvian company, taking into account the cost of shipping their products will be competitive in the local market.