Food Union Group, a group of dairy and ice cream companies operating in northern Europe and Latvia, has received investment from PAG, one of Asia’s largest private-equity firms, and US fund Meridian Capital in order to facilitate growth in China.

PAG will invest EUR161.6m and Meridian Capital a further EUR52.4m. The investment will support the expansion of Food Union with a specific focus in China, where Food Union said it is near completion on two modern dairy plants. In addition to capital, PAG will provide Food Union with “deep country-specific knowledge” and “significant operational experience” in the market, Food Union said. 

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Founded in 2012, Food Union’s businesses include milk processing and ice cream manufacturing in northern Europe. Its umbrella includes Rigas Piena Kombinats, Valmieras Piens and Rigas Piensaimnieks in Latvia, Premia in Estonia, Premier Is in Denmark, Isbjorn Is in Norway, Alpin57Lux in Romania, Hladokombinat No.1 in Russia and Ingman Ice Cream in Belarus. 

“Food Union has had a tremendous year in 2016. In Europe, we have solidified our position in our home markets and have acquired two ice cream producers in Norway and Romania. In China, we broke ground on two modern dairy plants which are expected to bring high-end dairy products to Chinese consumers by the beginning of 2018. PAG’s investment and Meridian’s follow-on investment are an endorsement of Food Union’s strategy and we look forward to working with PAG to build a strong business of dairy products in China,” said Andrey Beskhmelnitsky, global CEO and founder of Food Union Group.

“We are delighted to have the opportunity to partner with Food Union and Meridian Capital to help build a business to bring the best dairy products to China. There is a great demand among increasingly affluent and discerning Chinese consumers for high quality protein foods such as those Food Union produces. With its technology, know-how and capabilities, Food Union is uniquely positioned to deliver what the Chinese market needs,” Weijian Shan, chairman and CEO of PAG, said.

In Europe Food Union Group will continue focusing on high added value product development and production in dairy and ice cream segments and strengthening its market positions in the Baltics, Nordics, central and eastern Europe and the CIS countries. Elsewhere the company also plans to grow its business in Middle Eastern markets.