Slavyanka to acquire Orkla Brands Russia

By Oliver Nieburg contact

- Last updated on GMT

Orla Brands Russia produces chocolate, candies and waffle-based confectionery under brands such as Krupskaya and Pecar
Orla Brands Russia produces chocolate, candies and waffle-based confectionery under brands such as Krupskaya and Pecar
Norwegian firm Orkla has reached an agreement to sell its Russian confectionery business to domestic firm Slavyanka.

Orkla Brands Russia will join Slavyanka subsidiary Slavyanka-Lyuks JSC subject to approval from Russia’s competition authority. Financial details were not disclosed.

New owners better positioned

Peter A. Ruzicka, president and CEO of Orkla ASA, said: “Orkla has executed a comprehensive restructuring in Orkla Brands Russia over the last couple of years. The company is now well positioned for the future, but we believe that other owners are better positioned to further develop and support the company’s operations.”

Orkla Brands Russia was formed in 2011 through the merger of two Orkla companies SladCo and Krupskaya, which were acquired in 2005 and 2006 respectively.

The business posted net sales of RUB 6,114m ($117m) in 2013. The business has factories in Peterhof, Yekaterinburg and Ulyanovsk and employs 2,225 people.

Orkla’s Russian branded nuts company, Chaka, and separate real estate assets in St. Petersburg and Yekaterinburg were not part of the transaction.

Russian confectionery market

Euromonitor International estimates retail values sales in the Russian confectionery market of $13.4bn in 2014 and expects a compound annual growth rate of 0.4% up to 2019.

The Russian confectionery market is led by Mars, followed closely by United Confectioners. Orkla Group occupies eight place with a 3.1% market share and Slavyanka holds ninth place with a 2.4% share, according to Euromonitor data.

Changes at Orkla

Orkla - the number two chocolate company in Norway and the number one biscuit firm in Sweden – restructured its confectionery & snacks division​ last year and appointed the former head of Arla Foods in Sweden Christer B. Åberg to lead the unit.

The restructuring saw Orkla merge snack chips brand KiMs Norge, biscuit brand Sætre and chocolate business Nidar into a single company in Norway.

In August this year, Orkla acquired Latvian company NP Foods Group​ and its Laima chocolate brand.

Privately-owned Russian confectionery firm Slavyanka recorded sales of RUB 13 billion ($254m) in 2013. The company has production facilities in the Belgorod region and has over 5,000 employees.

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