Ukraine’s Erlan forecasts floods of juice in Russia’s South

18 Jul '08
Ukraine’s beverage producer Erlan has announced $318m plans to build a beverage factory in the Rostov Region – its first facility in Russia.

Andrey Mazutko, the firm’s director for marketing, said the plant was to produce 60,000 bottles of Biola-branded juice a day, or 170 million liters of juice a year. He added that the equipment would be supplied by German firm KHS but declined to give details of a construction timeframe.

“The final decision on construction of our first plant in Russia was made after Sochi had been declared the capital of Winter Olympics 2014,” Mazutko said. Biola will be predominantly marketed in the regions of Rostov, Volgograd, Krasnodar, and Stavropol.

Erlan’s representatives say that the south of Russia is of high priority for the company. “Here we sell more than half of juices that we deliver to Russia,” Vladislav Karpus, the firm’s director for external economic relations said, adding that the other half was for Central Russia and Povolzhie. Mazutko said the move would see his firm slash distribution costs on sales in Russia’s South.

The Rostov regional administration reported that the factory might be located on a 15-hectare site in the Azov production zone. Five-year tax breaks are being considered for Erlan.

Experts say that Erlan can secure a hefty share of the regional market provided marketing strategy is wise and prudent, competing on equal terms with such local giants as Sady Pridonya and Interagrosistema.

For reference:

Dnepropetrovsk-based ZAO Erlan produces juices, mineral water and ice tea, and has three factories in Ukraine. The company makes about 20 million liters of juice a month and takes up a quarter of the Ukrainian juice market. In 2007 Erlan sold 25,1 million liters of juice in Russia and another 15,7 million in the first half of 2008.
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