Competition with specific components helps capitalisation
IPO and consolidation of domestic food enterprises allows competitiveness of products to be raised
By Andrey Romanovsky
Belgospishcheprom expects the forming of powerful food companies to accelerate the modernisation of production facilities and raise demand. “From specific food businesses, we can create holding companies,” explains its Chairman, Ivan Danchenko. “Within the Customs Union, we’ll be competing with powerful food companies from across the Russian Federation.”
He notes that consolidation will used territorial principles, with several companies grouped around Gomel Fat Factory. Stolbtsy Fruit and Vegetable Processing Plant will operate in conjunction with Gorodeya Sugar Mill, while Malorita Cannery and Vegetable Dehydration Plant will liaise with Zhabinka Sugar Mill. Geography is extending, with Belsolod JSC already working with several starch plants and distilleries, alongside farms in the Ivanovo District. “Polotsk Beer is to liaise with Belsolod,” adds Mr. Danchenko.
In his view, such integration will allow funds to accumulate, for direction into investment projects — including those associated with the development of raw materials. In addition, capital is to be raised through IPO (initial public offering); a pilot project is being implemented at the Minsk Factory of Sparkling Wines.
Interest in buying shares in such enterprises as Slodych and Lidapishchekontsentraty has been evident, with ordinary people able to purchase such securities (which can be sold for future profit or held for dividend returns). “At present, rates on savings exceed the return on shares,” he admits. “However, sooner or later, deposit rates may fall to just 10 percent per annum.”
We can assume that people’s interest in shares will rise since benefits are indirect as well as direct: the range and quality of food products made by domestic enterprises should increase, since funds generated will be reinvested into modernisation.
Strategic investors are also to be attracted into the food industry; Moldovan wine producers are being encouraged to invest in Minsk Plant of Sparkling Wines, alongside companies specialising in containers, packaging and labels. Such interaction would enhance the competitiveness of Belarusian products, improving access to foreign retail outlets.