A consortium comprising RDIF and C.P. Group invests USD 1 billion in the creation of Russia's largest dairy complex

Press release, 18.05.2016

Moscow, May 18, 2016 - The Russian Direct Investment Fund (RDIF), the Thai conglomerate Charoen Pokphand Group (C.P. Group), Banner Infant Dairy Products from China (Banner Dairy),as well as leading Middle Eastern investors and banks together with Ryazan Region Government are pleased to announce the signing of Memorandum of Understanding (MoU) for the establishment of Russia's largest integrated dairy complex. The project will be located in the Ryazan region.

This significant agreement demonstrates the commitment from all parties to this important project involving an estimated investment of USD 1 billion. The MoU was signed today in the presence of the Prime Ministers of the Russian Federation and the Kingdom of Thailand Dmitry Medvedev and Prayut Chan-o-cha.

The new complex will have the competitive advantage of incorporating the full production cycle for dairy products - from the cultivation of feed crops for livestock, right through to the production of finished products, packaging and logistics.

The total production capacity of the complex will be 400,000 tons of finished products per annum, with the broad product range including pasteurized and UHT milk, cheese, and sour-milk products. The project will be managed by C.P. Group in collaboration with Banner Dairy. 

The complex will utilise Banner Dairy’s unique model of new generation in the dairy industry, which is characterized by the comprehensive integration of the latest technology and best practices in modern dairy production from around the world together with Banner’s own innovation and experiences. Such technology reduces the processing time of raw milk from the cow to the bottle to just two hours. This model also allows the complex to produce the safest and best quality dairy products, as well as to retain all the beneficial properties of natural milk, including its immunologically active factor, which cannot be preserved using other modern milk-processing technologies.

Kirill Dmitriev, CEO of the Russian Direct Investment Fund (RDIF), said:

"Russia is one of the world's largest milk producers in absolute terms, however, its production processes are not very efficient. Through the use of modern dairy technologies, cows in some countries produce almost two and a half times more milk than in Russia. C.P. Group and Banner Dairy have achieved strong results in the production of dairy products and their experience in implementing such projects is unique. Their participation in the construction and the operational control of the complex will significantly enhance its effectiveness, which will mark an important step towards increasing the share of domestic dairy production and reducing milk imports."

Bai Shanlin, CEO (China Area) of C.P. Pokphand Co. Ltd., a subsidiary of C.P. Group,said:

"We see great potential to develop the most advanced and modern dairy production system in Russia due to its abundant agricultural resources and high level of milk product consumption. With the world class milk production complex, we will be able to produce the best quality dairy products to meet Russian consumers’ demand. We wish to bring our experience together with our partner Banner Dairy Products to leverage the latest technologies and best practices and create shared value not just to our business, but also to the local communities and the country."

Deng Jiuqiang, Chairman of Banner Infant Dairy Products Company, said:

"Together with C.P. Group, we have developed, innovated and refined a unique dairy production model in China, which is currently one of the largest and most advanced dairy integration systems in the world. We are very proud of being part of this new and ambitious dairy project, and having the opportunity to use our expertise to produce high quality dairy products for the Russian people and make greater contribution to the modernization of the Russian dairy industry through the establishment of the largest dairy complex in Russia."

Oleg Kovalyov, the Governor of the Ryazan region, said:

"We are pleased to welcome the Russian Direct Investment Fund and its international partners as investors in the Ryazan region’s agricultural sector. The region offers a number of technological benefits that will enable the smooth implementation of these projects. These benefits include an advanced agricultural and industrial infrastructure, along with a highly skilled workforce and well developed technology. In addition, the region is well placed geographically with good transport logistics. This partnership with C.P. Group and Banner Dairy will be an important next step in the development of the agricultural sector of the region, as well as Russia as a whole."

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Russian Direct Investment Fund and the CP Group Partnership was signed in June 2015 in the framework of St. Petersburg International Economic Forum. The parties agreed to seek investment opportunities and joint investments in long-term projects in the Russian Federation in sectors such as agriculture, manufacturing and distribution of food and others.

Russian Direct Investment Fund (RDIF) was established in 2011 to make equity co-investments, primarily in Russia, alongside reputable international financial and strategic investors. RDIF acts as a catalyst for direct investment in the Russian economy. RDIF’s management company is based in Moscow. Further information can be found atwww.rdif.ru

Charoen Pokphand Group (C.P. Group)is one of Thailand’s largest private businesses and one of Asia’s leading conglomerates, with a global and diversified business across a variety of geographies, sectors and industries. From its beginnings in 1921, C.P. Group has grown into a global company with over 300,000 employees, operating in 17 countries, including China, India, Russia, Turkey and ASEAN nations and maintaining offices in 14 other countries such as the US, the UK, France, Germany, and Italy. C.P. Group’s flagship companies span agrifood, retail and telecommunications.  It has invested in the agri-food sector in Russia since 2006.  Further information can be found at www.cpgroupglobal.com/en/

Banner Infant Dairy Products Company as a private business in partnership with C.P. Group, was co-founded by a group of well-known dairy business entrepreneurs led by Mr Deng Jiuqiang, the former key founder of the China's top two dairy groups and main founder of China's largest dairy farm group. Banner Dairy was established in 2013 as a single largest vertically integrated dairy production system both in China and the world.

For additional information contact:
Maria Medvedeva
Russian Direct Investment Fund
Director of External Communications
Tel: +7 495 644 34 14, ext. 2141
Mobile: +7 964 726 17 73
E-mail:
mm@rdif.ru

Andrew Hayes / Elena Garside/ Joseph Burgess
Hudson Sandler
Tel: +44 (0) 20 7796 4133

Netithorn Praditsarn
C.P. Group
Vice President, Global Communications
Tel: +66 2 664 5354
Mobile: +66 90 409 5996
Email:
netithorn.cp@cp.co.th

Yin Ai
Brunswick Group
Tel: +852 986 522 96
Email:
yai@brunswickgroup.com