The founder of Unimilka became a co-owner of the leader of the Latvian dairy market

The founder of Unimilk, Andrei Beskhmelnitsky, after the sale of the company to the French Danone, will continue to independently invest in dairy assets. A businessman acquires a blocking stake in the largest milk processor in Latvia, Rigas piena kombinats (RPK), which controls almost 50% of the local market. Three years ago, Wimm-Bill-Dann showed interest in this enterprise; at that time it was valued at €60 million.

The fact that RPK is attracting a financial investor from Russia in the person of Andrei Beskhmelnitsky is reported by the Latvian media. The structure of the transaction implies that RPK shareholders reserve part of the shares that Mr. Beshmelnitsky will be able to receive after making a financial investment in the development of the plant. At the beginning of February, Nadezhda Kryzhanovskaya, a representative of Mr. Beshmelnitsky’s team, joined the board of directors of the dairy company, writes the Internet resource bb.lv. “It was decided to attract a foreign investor due to losses of 1.45 million lats at the end of 2010,” he quotes PRK representative Irena Berzina as saying. Yesterday, Ms. Berzinya told Kommersant that, according to her information, the deal with Mr. Beskhmelnitsky has already taken place.

Andrey Beskhmelnitsky confirmed to Kommersant his participation in the RPK business. “The acquired stake is sufficient to make strategic decisions on the development of the enterprise,” he said, declining further comments. A source close to the businessman says that the size of the acquired package is “no less than a blocking one.”

Former co-owner of Wimm-Bill-Dann (WBD) David Yakobashvili told Kommersant that three years ago the company was considering the possibility of purchasing PRK. “This is a good modern enterprise. It was interesting for us from the point of view of exporting products to Russia, but we decided to abandon the deal, weighing the political risks associated with a possible ban on milk supplies from Latvia,” says Mr. Yakobashvili. According to him, at that time 100% of PRK was valued at €60 million. Executive Director of the Russian Dairy Union Vladimir Labinov agrees that the risk of a ban on milk imports from Latvia is indeed present.

The PRK company was founded in 1927. It produces dairy products under the brands Rasa, Lase, Tio and others. According to Euromonitor, in 2009 RPK was the leader of the Latvian dairy market with a 49% share in value terms. In addition to Latvia, Russia, Azerbaijan and Germany are important markets. Since 2000, the controlling stake in the company has been owned by JSC Baltijas lase, controlled by entrepreneurs Ivars Strautins and Atis Sausnitis. In 2010, PRK's turnover amounted to €75.4 million, loss - €2 million.

Andrei Beshmelnitsky, together with entrepreneur Andrei Blokh, founded the Unimilk company in 2002 (brands Prostokvashino, Bio Balance, Summer Day). Last year it was the second largest producer of dairy products after WBD with a market share of 16.5%. At that time, the company united 28 enterprises in Russia, Ukraine and Belarus, and its turnover reached €1 billion. In June 2010, Unimilk and the French Danone announced the merger of their dairy assets in Russia and the CIS, in the created company the Russians own 42.5%. Although most of the seats in the combined Danone-Unimilk company were given to representatives of the French company, its chairman is Mr. Beskhmelnitsky.

As Kommersant previously wrote, as part of the deal, the owners of Unimilk received about €120 million. They have an option to sell their share to Danone from 2014 to 2022.

Chairman of the Board of the National Union of Milk Producers (Soyuzmoloko) Andrei Danilenko considers it natural that Andrei Beskhmelnitsky would invest the funds received in the sector that he knows well. “He is still 44 years old, he is full of strength and energy,” notes Mr. Danilenko. In his opinion, Baltic dairy producers have great potential for working within the European Union.

Oleg Trutnev

Andrei Beshmelnitsky's milk came running