Continued growth for WBD

Related tags Company Investment Russia

Russia's leading dairy and juice producer has declared a steady
increase in its quarterly production output as well as a
reaffirmation of its Standard & Poors rating.

The company said in a press release that its first quarterly production output had increased by 4.6% on the year to 391,300 tons. The company said that its dairy segment had increased sales by 12.2 per cent to approximately 286,100 tons, whereas its juice products sales had increased to 103,800 tons.

Last year the company broke into the lucrative and rapidly growing market for bottled water in Russia. The company said that for the quarter it had sales which amounted to 1,400 tons of water, but stressed that as sales are still relatively new for this segment it was not possible to make an accurate comparison to last year's figures.

However, compared to company sales growth of 6.3 per cent last year, the first quarterly figures may indicate that the strong growth it has enjoyed in recent years is beginning to show signs of a longer term slow down.

The company also announced that it had had its Standard & Poors rating reaffirmed at 7.6 out of a possible 10. This, the company stressed, continues to be the highest rating for corporate governance of any company in Russia at present.

The company confirmed that the scoring had been broken down as follows: Ownership structure and influence 7; Financial stakeholder rights&relations 7.5; Financial Transparency and Information Disclosure 7.7; Board structure and process 7.7.

Earlier on in the week the company confirmed that it would be proceeding with its investment programme, after confirming that it would be continuing with the completion of its investments in the Baltic Dairy Factory, based in St Petersburg. The new investment will include four new packaging lines for the production of milk and a range of dairy dessert products. This brings the total level of investment in the facility up $6 million for the programme.

Last year WBD financial performance was strong, on the back of continued growth in its sales. However the overall profits margins were impacted by significant expenditure to update its production facilities, the construction of new facilities and the development of an improved sales, marketing and distribution system.

The company received a blow when negotiations with French dairy giant to secure a $1 billion take over bid were broken off in November last year. Industry observers believe that to continue with the high level of investment necessary to sustain its market share, WBD will still need to find a new investor. It is not known whether or not the company is currently in talks with any other companies to secure that investment.

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