Lamb Weston/Meijer increases its share in Russian French fries production. If the authorities in Russia agree, the company will acquire a majority stake in the Lipetsk plant. That role is now reserved for the Belaya Dacha Group.
Lamb Weston/Meijer and Belaya Dacha are no strangers to each other. The two started a joint venture in 2016 to open Russia's first large chip factory two years later. The factory in the city of Lipetsk has a processing capacity of between 2 and 100.000 tons of potatoes per year.
For the time being, Lamb Weston/Meijer has a 35% share in the Russian chip factory. The intention is that this will soon be almost 75%, mainly by acquiring more than 39% of the shares of Belaya Dacha. The Russian authority that must monitor threatening situations of monopoly only has to give permission for the takeover.
Plans for other chip factories
With the completion of the French fries factory in Lipetsk in 2018, Belaya Dacha and Lamb Weston/Meijer had the ambition to supply the whole of Russia with French fries. With McDonald's as the largest customer, the company has a strong position. Other parties have now also entered the Russian chip scene. Both McCain and ZHAK have plans to... to build a factory.
Lamb Weston/Meijer and Belaya Dacha are also not standing still and have growth plans. For example, last year the company invested €7,4 million in the factory in Lipetsk to increase processing speed. This happened when the factory came to a standstill for several months this year due to the corona crisis. Production has now resumed.
French fries market in Russia is growing
French fries sales in Russia are seen as an important growth market. In 2019, the Russians imported almost 100.000 tons of processed potatoes from abroad, mainly from the Netherlands. This is evident from customs data. Euromonitor International previously predicted that sales of potato products in Russian retail will grow by almost 10% this year. Moreover, the most important sales channel for fries, the catering industry, seems insatiable.