Food and Beverage Business
Finance

NMZhK, a condiments maker, acquired by Russia’s Ros Agro

NMZhK, a condiments maker, acquired by Russia's Ros Agro Food and Beverage Business

Ros Agro, the London-listed holding company behind Russian food maker Rusagro Group, has acquired 50% of the shares and taken control of peer NMZhK.

NMZhK, a Nizhni Novgorod-based agri-food business, known for producing popular condiments such as Ryaba and Astoria, along with Hozyayushka margarines and Kremlevskoye spreads, has become part of the Ros Agro family.

With ownership of an oil and fats plant in Nizhny Novgorod, oil extraction facilities in Uryupinsk and Sorochinsk, and elevators in various regions including Volgograd, Orenburg, Samara, Saratov, and the Republic of Bashkortostan, NMZhK brings valuable assets to Ros Agro’s portfolio.

Alongside its own margarine and mayonnaise production, Ros Agro aims to focus on the development of NMZhK’s strong brand presence. This strategic acquisition is expected to yield significant synergies for both companies.

Timur Lipatov, general director of Ros Agro, highlighted the benefits of the deal, stating, “Control over NMZhK will allow Ros Agro to project its leadership in key segments of the B2C market, including becoming the leading producer of mayonnaises and mayonnaise sauces in Russia. It will also result in a strengthened position in sunflower oil and other related seed products, as well as various industrial fats categories.”

Mr. Lipatov further emphasized, “This market positioning will enable our shareholders to realize economies of scale, through optimized logistics and reduced purchase prices. We are also excited about the potential for enhancing our oil and fats business through the expertise of the NMZhK team and an exchange of best business practices.”

The terms of the deal have not been disclosed at this time.

In the first quarter of the current year, Ros Agro experienced a 23% decrease in sales, amounting to $651m, with adjusted EBITDA falling by 56% to $98m. This decline was attributed to a drop in world prices, a shift in the US dollar/rouble exchange rate, and a delay in sales due to late harvesting of agricultural products.

In the previous year, Ros Agro achieved a sales growth of 8%, reaching $3.5bn. However, its adjusted EBITDA decreased by 6% to $657m. Mr. Lipatov acknowledged the impact of sanctions imposed on Russia as a result of their actions in Ukraine, stating, “Net profit decreased by 84% due to the negative influence of forex losses caused by cash blocking by European banks.”

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