News Potatoes
LWM majority stake in Russian chips factory
Lamb Weston/Meijer has officially acquired a majority stake in Russia's first large-scale French fries factory. At the beginning of November, the French fries producer already announced that it wanted to take over this position from Belaya Dacha Group.
The majority interest in the joint venture between the Russian Belaya Dacha Group and Lamb Weston/Meijer (LWM) has been acquired by LWM. The competition authority FAS (Federal Antimonopoly Service) in Russia has the shift approved. LWM thereby strengthens its position in the market for frozen potato products of Russia, as this joint venture owns the largest chips factory in the country, located in Lipetsk.
The factory has a processing capacity of between 100.000 and 200.000 tons per year. Last year it invested approximately €7,4 million to increase processing speed. A study is now being carried out into expanding production capacity. With McDonald's as a major customer, it is in a good position. “We started the joint venture in 2016 because we both saw unique opportunities in the growing Russian market,” said Peter van Wouwe, CFO of Lamb Weston/Meijer.
Plan was already there
It is no surprise that LWM is increasing its majority stake in the joint venture. That idea was there from the start of that joint venture. "At the time it was agreed that Belaya Dacha Group would initially take the majority position, whereby we would have the opportunity to expand our ownership position over the years." LWM has expanded its interest in the Russian chips factory from 35,5% to 74,9%.
Kimberly Baker
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