Bonduelle, the France-based manufacturer, has snapped up a production plant to boost its presence in Russia.
The company said today (3 June) it had acquired the “industrial assets” of LLC Shock, a Russian frozen-vegetable company based in Belgorod, a city in the south west of the country, close to the border with Ukraine. Financial terms were not disclosed.
Bonduelle already has production further south in Krasnodar and claims “undisputed leadership” in Russia’s market for canned vegetables.
The business said the frozen-vegetable sector in the country had seen “significant growth”, pointing to the “support” it had given the market through imports predominantly from France and Poland. However, some products cannot be imported due to Russia’s embargo on selected food products from markets including the EU due to the long-running geopolitical dispute over Crimea and Ukraine.
“This market is benefiting from growing consumer interest in value-added ready-to-eat solutions. This investment will enable the group to also be present on the mono-vegetable and simple mixes market segment, banned for import by embargo,” Bonduelle said.
In May, when Bonduelle published a trading update for the third quarter of its financial year, the company said it had seen a “robust sales increase” it had been seeing in Russia in previous quarters “was sustained over quarter three thanks to the innovations in the canned segment for the Bonduelle brand, coupled with the encouraging development of the frozen business segment”.
In all, Bonduelle’s group third-quarter sales inched up 0.4%. The company pointed to the change in the timing of Easter and lower business from fresh produce in North America. The group’s third-quarter performance, plus the impact of negotiations with retailers at the start of the year, saw the company revise its forecast for annual sales and earnings.
When Bonduelle posted its first-half results, the company said it was expecting “limited growth” in revenue at constant exchange rates and operating income at constant exchange rates at the lower range of a target of EUR128-133m (US$143-148.6m). Last year, profitability by that metric was EUR123.6m.
After the third quarter, Bonduelle is now aiming to achieve “stable sales and operating income at constant currency exchange rates” in the 12 months to 30 June compared to the previous year.