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. Last Updated: 07/27/2016

Wimm-Bill-Dann Eyes European Markets, IPO




Wimm-Bill-Dann, the country's largest producer of juice and milk, is planning to go public and expand its empire to other European countries, chairman David Yakobashvili said.


Wimm-Bill-Dann, which cultivated a foreign image after it was set up just eight years ago, now holds a third of the juice and dairy products market and is considering an initial public offering.


The company, Russia's answer to Nestl? or Danone, is also mulling issuing American Depositary Shares, similar to American Depositary Receipts, which will allow its shares to be traded abroad.


"We should do an IPO. We are thinking about whether we should issue ADSs. I think it will happen some time in 2002," Yakobashvili said in an interview. Wimm-Bill-Dann posted a $35 million net profit in 1999 and expects this to rise to $41.4 million this year.


Before tapping international markets, Moscow-based Wimm-Bill-Dann plans to consolidate the different stocks of its nine factories, creating a single stock issue, Yakobashvili said.


Wimm-Bill-Dann will then be able to use 10 percent to 15 percent of its shares to launch an ADS program.


Yakobashvili said the money would be used for further expansion of the company, which has already invested $78 million in Russia and has interests in Central Europe and Asia.


"We will have to build or buy a factory in Europe," he said. "We will need a factory in Central Asia."


He said Wimm-Bill-Dann produced 312,000 metric tons of dairy products and 137,000 tons of fruit and vegetable juice in the first half of this year, compared with 565,000 tons of dairy products and 200,000 tons of juice in 1999.


One of Wimm-Bill-Dann's juice brands, Wonderberry, is sold in the Benelux countries and Israel, while Germany and France will join its sales list this year, Yakobashvili said. Recent research showed the company could sell about 400,000 liters of juice in Benelux countries, he added.


When setting up the company in 1992, Wimm-Bill-Dann's founders wanted to appeal to consumers by giving their products a foreign image.


"In 1992, people preferred foreign food, they thought it was the best," Yakobashvili said.


But within years, Wimm-Bill-Dann proved it could do better than even some foreign companies. Wimm-Bill-Dann now holds more than 30 percent of the sterilized milk market and about a third of the juice market.


Yakobashvili said Russia's annual fruit juice consumption amounted to 3.6 liters per capita compared to 26 liters in Europe or 30 liters in the United States.


Russia's milk consumption is 150 to 200 kilograms per capita a year, which is seven times less than that in Europe, Yakobashvili said.


The purchasing power of Russian consumers is low, but Yakobashvili was optimistic about future sales in Russia.


"Consumption is so low that there are prospects for further development," he said.