Fazer Group: close to buy share in Neva bakery

Helsinki / FI. (ko / si /fg) Fazer Group is close to purchasing the Neva baking company, which is co-owned by St. Petersburg businessman Alexander Aladushkin, who also controls 50 percent of the local flour market. ZAO Aladushkin Group owns 33,93 percent in Neva, and Neva general director Evgeny Karginov owns 60 percent of it. The deal is worth 200 million RUB and is expected to be completed at the beginning of next year.

Fazer already owns the Zvezdny candy maker in Moscow, Volzhsky Pekar in Tver and Khlebny Dom in St Petersburg, which controls 37 percent of the bread market there. The company´s turnover in 2006 was 1,2 billion USD, of which 120 million USD came from Russia. OAO Neva specializes in frozen bakeries products such as croissants, turnovers and so on. The company´s facilities have a capacity of 100 tons of products per day, but they currently produce about 20 tons. According to SPARK Interfax, the company´s turnover in 2006 was ten million USD.

Observers note that baked goods will be almost unrepresented in Aladushkin´s holdings after the deal is completed. Although Aladushkin expressed the intention three years ago of consolidating the local bread market, he was unable to obtain the assets he desired – Khlebny Dom went to Fazer and OAO Pekar is now owned by Moscow´s OAO Cheremushki. Pastries account for five percent of the bread market, and that market is growing by 25 percent per year. Neva controls 58 percent of that market, or 2,5 percent of the St. Petersburg bread market and less than one percent of the national market (source).