Laima turns to Uzbekistan

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Related tags: Estonia, Confectionery, Latvia

Icelandic-Lativian confectionery producer Laima has confirmed that
it is about to start caramel production in Uzbekistan in an attempt
to fend off increased competition once enlargement has taken place.

According to News2Biz Latvia, the agreement was sealed during a recent visit by Uzbeck officials to Latvia at the beginning of the month. The company will be forming a join venture with a state-owned Uzbek company to be called Laimauz.

Laima​ says that production could start as soon as May as the production facilities are already in existence. Laima says it will be providing the technologies and equipment for the project, which is expected to have a production capacity of 2.5 tons a day.

"Uzbekistan used to be one of the largest markets for Latvian caramels - 500 tons a year until 1998. This explains our choice, as the market has a notable growth potential,"​ Juirs Jonaitis, Laima chairman, said to News2Biz Latvia.

Laima used to be a major supplier of confectioneries to the Russian market and was particularly strong in the caramels segment - always a strong favourite in the Russian and Commonwealth of Independent States markets. However, after Latvia gained independence in 1993 and then with the Russian financial crisis that followed in 1998, the company's share of the market has been impeded.

Laima says that its investment in the project will come in at €300,000, with a similar sum expected to be put up by its Uzbek partner. The company also says that once the caramel production is fully under way it will then be looking to launch production lines for confectionery dragees and jellies.

The company first said that it was interested in a joint venture in this region a year ago, citing increased competition after EU enlargement as the driving force behind its decision.

Related topics: Market Trends

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