All milk produced by the farms will be sold to Danone factories

All milk produced by the farms will be sold to Danone factories

Danone has announced a co-finance partnership deal with Russian firm Damate to construct new dairy farms in the country.

The deal is aimed at securing long-term milk supplies in the fast-growing market, the companies said. The agreement provides for the construction of several milk farms in the Tyumen region and the Bashkortostan Republic.

All milk produced by these farms will be sold to Danone factories. Additionally, Danone intends to provide some financial support to the projects and bring "knowledge and expertise" in order to make them more efficient, it said.

The companies did not reveal financial details of the deal.

"When working with milk producers our priorities are sustainable mutually beneficial cooperation and development together," said Yves Legros, CEO of Danone Russia. "The project we launch with Damate fully corresponds to that strategic priority. It will help to increase production of high quality milk and enhance standards of the dairy farming in Russia".

Naum Babaev, chairman of the board of Damate, said it has been cooperating with Danone since 2007. "It is extremely important for us that Danone brings not only financial support to this project, but also participates in its design and management."

According to Russia's National Milk Farmers' Union, the country is facing a decline in milk production and a drop in the number of its cows.

"This trend could be overcome by construction of new state-of-the-art facilities aimed to produce high quality milk in big quantities. We are looking for strong state support of such initiatives," the NMFU said.