Baltika to focus on international expansion

- Last updated on GMT

Related tags: International trade

Expanding sales to the many countries which border with Russia, as
well as those further afield, is the order of the day at the
country's leading brewery, Baltika.

Russia's top brewer, Baltika, plans to increase output, boost exports to Europe and Asia and franchise production of its beer abroad.

St. Petersburg-based Baltika, owned by Finnish/Danish Baltic Beverage Holding, will raise 2002 output by 17.8 per cent and hike exports, the company's export director, Dmitry Kistev, said in an interview.

"We plan to export 1 million hectolitres this year. Last year we exported 400,000 hectolitres,"​ Kistev said. "Exports account for 6 per cent of Baltika's total sales, but the company's aim is to increase this figure to 10 per cent by 2005, thus making Baltika a truly international brand."

Baltika is sold in 27 countries, including Germany, Israel, Greece, Portugal and France, although 80 per cent to 85 per cent of its exports go to the Commonwealth of Independent States.

Baltika says it controls around a quarter of the Russian market.

"We are developing our exports gradually. We are starting from neighbouring countries and continuing to expand operations to more distant countries,"​ Kistev said.

He said Baltika is looking at the untapped Asian market.

"We are studying the possibility of exporting to Asia, especially to countries Russia has borders with, such as China."

Kistev said Baltika will invest $180 million (€182.4m) this year to increase production, reduce costs and develop its distribution network.

Baltika is targeting 2002 earnings of R20 billion (€0.6bn) compared to R15.7 billion last year.

Kistev said the firm is also looking at producing its own beer in Europe on a franchise basis.

"Baltika is carrying out a pilot project in Latvia, where our beer is produced under franchise. If the project proves successful, Baltika will try to set up similar franchises in Europe,"​ he said.

BBH is owned by Finland's Hartwall, which is in the process of being acquired by the UK's Scottish & Newcastle, and by Denmark's Carlsberg.

Related topics: R&D

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