Dnipro snack producer Snack Production to buy a fruit and vegetable plant in Kherson

Dnipro snack producer Snack Production to buy a fruit and vegetable plant in Kherson

The Snack Production group of companies buys 100% of the fruit and vegetables processing works Kherson.

The Kherson works area is 5.1977 hectares, the processing area is 9 529 m2, its technological equipment allows processing 300 tonnes/day of tomatoes, sterilizing and packing 3 tonnes/hour of tomato paste, and it has tomato juice filling line – 3500 l/ hour and juice production line – 4-5 tonnes/day.

The parties refused to disclose financial information.

According to Maxim Shinkarenko, the director in Ukraine of Millstone&Co, who supervised this deal, the Kherson works is one of the biggest private fruit and vegetables processing works in Ukraine. Average annual revenue of Kherson works is about UAH 60 000 000.

“The company has established sales channels: distribution (there are more than 15 permanent partners in all regions of Ukraine); trade networks (for production under private labels) and export to over 20 countries, including Belarus, USA, Romania, Georgia, Israel, Canada, Sweden, Latvia, Lithuania, and Kazakhstan. Export volumes make over 30% from general turnover” – Mr. Shinkarenko said.

Maxim believes that this M&A deal illustrates the logic of the leader to build vertical integration on the market. Acquisition of production facilities will give an opportunity to generate margin in production segment, to have more assurance in the product quality, fixed terms of delivery and be flexible in the range of products.

“Until now vertical integration was natural for food chains, who used private labels, but now we can observe big distribution companies and trademarks owners are doing the same”, the director in Ukraine of Millstone&Co stated.

Generally, tasty food is one of the competitive advantages of Ukraine and fruits and vegetables are not an exception. That is why the food-processing sector is growing not only to meet the consumption needs but investor’s demand as well. More than that, Millstone&Co thinks that profile investors will aggregate more production capacities.

The Snack Production is one of the leaders on the Ukrainian market. The company produces and sells snacks under its own labels. Due to the state-of-the-art technologies and high-quality production, the company labels are on the top in the snacks segment of Ukraine, have leading positions in a number of foreign countries and now actively spread on Kazakhstan market.

Millstone&Co is a private investment company that provides investment services to its clients. The company has offices in Warsaw, Kraków and Kyiv.

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