Baltika president leaves company in good shape
resignation as head of Russia's largest brewing company, bringing
the curtain down on an era of unprecedented growth.
For the past 13 years Bolloev has overseen the consolidation of the company, which is owned by BBH, as a major player in the burgeoning Russian brewing sector.
"On behalf of BBH, we would like to pay tribute to Bolloev's achievements over the last 13 years," said BBH president and the Baltika board of directors chairman Christian Ramm-Schmidt.
"Under his visionary leadership Baltika is the leading brewer in Russia, which is now the fifth largest beer market in the world. The brand Baltika has become the second largest beer brand in the whole of Europe, and the beer is gaining recognition internationally."
The company's third quarter results go some way to backing up this assertion. Baltika claims that the last nine months of the year 2004 have been the most successful in the company's history, with results in ever sector moving upwards.
In the 1Q sales were up by 6.8 per cent, while the following quarter saw a further increase of 13.7 per cent. The third quarter of 2004 saw the most dramatic increase of all, at 31.2 per cent.
According to an independent audit conducted in the 3Q 2004, Baltika Brewery's share of the domestic beer market reached 24.5 per cent. The entire Russian beer market is worth around $5.2 billion.
The company has consistently taken a strategic approach to positioning itself in what is one of the fast-growing beer markets in Europe. For example, the whole line of sub-brands within the Baltika parent brand have been restyled to fit in with the overall concept of the Baltika beer brand.
The company has also achieved a good degree of product diversification. Sales of the company's other brands, which are often positioned separately in the market, have been booming. Over the 3rd quarter, sales of Carlsberg beer made under license increased by 85 per cent, while sales of Parnas premium beer increased by 294 per cent.
This suggests that the premium end of the market is becoming the fastest-growing segment, and the sector with the most room for innovation.
At this time, Baltika has established one of the most modern distribution and logistic systems in the country. The system is based on the company's own fleet of 1,500 railcars and 30 warehouses, seven of which are ultramodern terminals built in the last two years.
Such investment has resulted in a reduction of transportation costs by one per cent during a period which has seen railroads increasing their tariffs by 12 per cent.
All this has lead to the Baltika brand becoming the second largest beer brand in Europe by volume. Baltika beers are exported to 36 countries around the world.
In 2003 Baltika sold 16.2 million hl of beer and according to US GAAP standards, net sales last year stood at $805 million with a net profit of $123 million. Baltika now holds the top two Russian beer brands: Baltika and Arsenalnoye.
BBH executive vice president Anton Artemiev, has been appointed as acting president prior to the appointment of a new permanent president of Baltika. Artemiev has been a senior executive of BBH since 2000, and has been a member of the Baltika board of directors since 2001.
Baltic Beverages Holding (BBH) is a 50/50-owned joint-venture between Scottish & Newcastle and Carlsberg Breweries.
