Chinese firm to jointly manage new dairy complex in Russia

China Daily, 18.05.2016

China's Banner Infant Dairy Products will participate in managing the production of a newly established integrated dairy complex in Russia, in the Ryazan region, which is to be the country's largest, according to an agreement signed in Moscow on Wednesday.

The $1 billion complex will produce dairy products for the Russian market, utilizing technology from Banner and Thailand's conglomerate, Charoen Pokphand Group (C.P. Group), with both firms acting as project manager. The complex will manage 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.

Deng Jiuqiang, Chairman of Banner Infant Dairy Products Company, said that Banner and C.P. Group have developed and refined a unique dairy production model in China, and the two companies will utilize expertise gained from this partnership in the new Russian complex.

"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," Deng said. Banner was established in China in 2013, as one of the country's largest vertically integrated dairy producing firms.

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 investment will come from the Russian Direct Investment Fund, and other parties. Kirill Dmitriev, CEO of the Russian Direct Investment Fund, said he expects C.P Group and Banner's involvement in the project to significantly enhance milk production in Russia and reduce the country's dairy imports.

"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," Dmitriev said.