Finland’s leading foods producers plan to shift more food production investments to lower cost bases in Russia and the Baltic states.
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With revenues of EUR1bn in 2006, Fazer’s pursuit of candidates for takeover in Russia is happening in a backdrop where the group has initiated a process to reduce its bakery and confectionery products manufacturing capacity in Finland.
It makes strong commercial sense to internationalise operations and look to Russia, said Fazer’s CEO Markku Numminen.
“Production costs are high, price competition is tough and consumption is not growing in the foods sector in Finland and Scandinavia. Rising raw materials prices have added to our cost base, and it is becoming difficult to pass on costs to consumers,” said Numminen.
Vaasan & Vaasan, owned by US private equity fund CapVest and part of AIG Global Investment, is also looking for acquisition opportunities in Russia and the Baltic-rim countries.
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By GlobalData“We are considering different options with regard to acquisitions in Poland and Russia, but no decisions have been made,” said Harri Roos, Vaasan & Vaasan’s Finance Director.
