FDBusiness.com

Dairy company Milkiland, which operates in the Ukraine and Russia but is registered in the Netherlands, has commenced its public offering of over 22% of its shares as it prepared to list on the Warsaw Stock Exchange. “We expect that our integrated business model, our strong position in the Commonwealth of Independent States, one of the largest and fastest growing markets, as well as the high profitability of our operations, will make the public offering an interesting investment proposal for investors in Poland and abroad,” says Vyacheslav Rekov, chief executive of Milkiland.

Milkiland owns Milkiland-Ukraine, one of the largest dairy companies in the Ukraine with 16 production sites, as well as a 75% stake in Moscow-based Ostankinsky Molochny Combinat, one of the largest dairy enterprises in Russia.

Milkiland intends to reinforce its position in the CIS by focusing on its operations in Russia and Ukraine. The high fragmentation of the market and growth potential provide significant expansion opportunities for the company in both countries. Milkiland intends to participate in the process of market consolidation and to strengthen its position among the leading dairy producers.

The gross proceeds from the sale of new shares, estimated at about Eur72m, will be used primarily to carry out the group’s investment programme going forward and to finance acquisitions and new projects, including investment of Eur10m to upgrade the Okhtyrsky cheese plant in Ukraine to increase its production capacity by 7,000 tonnes, and Eur10-13m to modernise the whole milk products plant at Ostankino in Russia.

The total value of the group’s planned investments in 2011–2013 is estimated at Eur83–106m, including acquisitions. In 2007–2009 Milkiland invested a total of over $70m, including $41m for acquisition of the Ostankino plant in 2008.