UKRAINE : COUNTRY TO WATCH
The smartest investors have been looking beyond the large population emerging BRIC economies of Brazil, Russia, India and China towards the lower profile second tier. Ukraine has been high on Zenith's list and is swiftly moving up other people's rankings too.
The fundamental reasons are :
- Geography - between central Europe and Russia.
- Population - 46 million, bigger than Spain and Poland.
- Growth - over 7% a year increase in economic output since 2000.
- Democracy, independence and opening outlook.
The dairy sector has seen two recent acquisitions:
- September 2006 - Danone buys Rodich for $10 million.
- April 2007 - Bel takes over Shostka cheese producer for estimated $60 million.
In beverages, activity has accelerated this year:
- April 2007 - Russia's Wimm-Bill-Dann announces interest in Ukrainian juice market.
- June 2007 - PepsiCo and PepsiAmericas acquire 80% of Sandora juice business for $542 million.
- June 2007 - Orangina Group purchases Rosìnka mineral water producer with sales of 30 million euros.
Buy now, while stocks last ?
2 comments:
Hi Richard,
Ukraine this is topic I am very much interested. I spent almost 2 years in beverage business in Ukraine. In 2005 I came into conclusion that Ukraine has bright future so I decided to go and work in order to understand Ukraine. It is a big mixture of cultures and nations. In XVII century today's Ukraine was just part of Poland We have 3 different Ukraine -East, Central and East mostly industrialized with biggest cities and with ca 70-80% Russian population.
Beverage business has been booming. CSD market has been growing ca 25-30% annually. Juice consumption comparably. In 2006 juice consumption per capita is 11 L but in 2001 it was only 3,2 L.
I may understand why PepsiAmericas acquired Sandora for over 700 mio USD - just to be in Ukraine and not to be for next 50 years. But I think that acquisition of Rosinka by Orangina Schweppes may be not good move. I know Rosinka very well and have serious reason to say so.
Any way I would like to say that it is not enough to say; "Ukraine country to watch", it should be rather "... to go and take your piece of cake"
Regards
Adam
Adam
Thanks for your comments. I'm intrigued by your views on Sandora and Rosinka. Can you shed more light?
Best wishes
Richard
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