Unimilk gets investment loan
it has received a €34 million credit line from Moscommercebank. The
company is hoping that it can now start to make investments in its
production facilities, in line with that of Russia's largest dairy
player, Wimm-Bill-Dann.
Unimilk was formed in 2002 after the amalgamation of nine major dairy busineses in Russia and the Ukraine. It is the dairy division of Plant holding, which is ultimately controlled by the massive Millhouse Capital. Currently Unimilk had a turnover of approximately $220 million (€175m) in 2003, a figure it aims to improve significantly by upping its production capacities.
Unimilk has said that it will spend around $30 million of the credit facility on the purchase of equipment as well as restructuring its own investment portfolio.
Industry experts say that Unimilk facilities are considerably lacking, especially compared to its biggest rival Wimm-Bill-Dann. This is the result of a lack of significant investment to bring facilities up to modern standard. As a result Wimm-Bill-Dann was able to produce around one and a half times the volume of the production volume achieved by Unimilk last year.
In 2003 Wimm-Bill-Dann invested $80 million in its production facilities and is expected to announce a sales turnover in the region of $850 million for the 2003 financial year.
Until now analysts had believed that with its ailing production facilities, Unimilk's future was looking bleak, with many believing that the company would have to be put up for sale. However the credit line is widely tipped as providing the dairy group with a fresh opportunity to return to competivity.
