Italian Dairy Company Set to Enter Russian Dairy Market

Parmalat, the Italian dairy company, is planning on investing up to 600 million euros ($812 million)this year on acquiring companies located in emerging economies and markets according to the Parmalat CEO Carlo Prevedini. The Italian newspaper Corriere della Sera also reported Tuesday that one of those emerging markets is Russia.

Prevedini said that Parmalat is looking to invest in countries that provide markets for high-added value products to ensure a high level of profitability. Those include products like baby nutrition or milk and drinks that provide specific health benefits.

The fact that the Russian dairy market is very consolidated makes it difficult for foreign companies to break into it. The best way to do that according to retail analysts. Some look for Parmalat to make a big move by purchasing a company like UniMilk which is Russia’s second biggest firm in the dairy business.

Investors look to make impressive returns based on the results of market leaders Wimm-Bill-Dann. The fact that there is a considerable gap in rates of consumption between Russia and Western Europe shows a great opportunity for investors. Right now close to 10 million tons of dairy products are consumed on an annual basis in Russia. A company with a good product could go in and double, maybe triple that and make a fortune.

This entry was posted on Tuesday, June 5th, 2007 at 11:17 pm. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.