Bloomberg News

Danone Expects to Invest 30 Million Euros in Ukrainian Plants

January 22, 2013

Danone SA (BN), the world’s biggest yogurt maker, plans to invest 30 million euros ($40 million) in its Ukrainian plants in the next three years, said Dario Marchetti, general manager of Danone Ukraine.

“The funds will be mainly used to improve quality and introduce new products,” Marchetti said in an interview on Jan. 18 in Kiev. The company expects sales growth of 10 percent to 15 percent this year, the same rate as in the past five years, he said.

Prime Minister Mykola Azarov wants to boost domestic consumer demand this year to spur the economy as global demand for Ukraine’s main exports, such as steel, has declined. Economic output shrank 1.3 percent in the third quarter from a year earlier, according to the state statistics data.

Ukraine’s potential for growth in dairy consumption is “huge,” Marchetti said. The company has three plants in Ukraine and produces products under ten brands, almost all of which are locally made, including “Prostokvashino” and “Veselyj Pastushok.”

Danone announced plans in Sept. 2011 to invest 30 million euros, most of which has already been invested apart from 5 million euros, which will be part of future spending, Marchetti said last week.

Ukraine’s economy will probably remain more or less stable, Marchetti said. There will be a slight correction in the currency, he said, adding that there will be “nothing dramatic.” He did not disclose company revenue for Ukraine.

Foreign direct investment in Ukraine was about $6 billion in the first 11 months of 2012, almost unchanged from a year earlier, according to the central bank data.

To contact the reporter on this story: Kateryna Choursina in Kiev at kchoursina@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net


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