Moscow, Nov. 16 - Two executives from Russian dairy companies Wimm-Bill-Dann and Nutritek have left to form a new milk venture, Russagroprom Holding, which will invest $550 million in the next five years buying land and producing milk.
Nikolai Dyachkov, who previously worked for Nutritek, told Reuters the new company would produce about 1,000 tonnes of milk daily. Dairy and baby food company Nutritek is a subsidiary of Nutrinvestholding , which floated its shares in April.
Dyachkov's partner in the project is Vladimir Alginin, the former head of the agricultural division of Wimm-Bill-Dann, Russia's largest dairy and fruit juice company and a former deputy agriculture minister in 1996-2002. "In the space of five years, we intend to create one of the biggest agricultural holdings in Russia," Alginin, the founder and general director of Russagroprom Holding, said in a statement announcing the formation of the new company.
Russagroprom said in the statement it planned to acquire about 250,000 hectares of arable land and to build a major complex to house at least 50,000 head of dairy cattle.
Milk powder prices have more than doubled this year in Russia and bread prices have risen sharply in line with world grain markets, fuelling inflation that is set to overshoot the government's 2007 target of 8 percent.
As Russia prepares for parliamentary elections on Dec. 2 and a presidential vote in March, around 20 food retailers have agreed to freeze prices on staples such as bread, sunflower oil and milk until Jan. 31.
An extension until March 31 is also being considered.