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. Last Updated: 07/27/2016

Italians to Supply McDonald's

Itar-TassA child reaching for a burger at a McDonald's restaurant in central Moscow.
ROME -- Cremonini, Italy's biggest meatpacker, aims to expand in Russia through a 40 million euro ($53 million) accord to supply beef to McDonald's and talks to serve food on high-speed trains.

"We are currently building a large plant to serve the Moscow area and provide meat for the country's McDonald's restaurants," chief executive officer Vincenzo Cremonini said Friday.

"We have also been contacted by the Russian railways to discuss the possibility of offering food on their new high-speed train line."

The company, based in Castelvetro di Modena, Italy, will start producing as well as distributing meat to Russia's 150 McDonald's restaurants.

The exclusive contract will increase its sales in Russia to 160 million euros per year, Cremonini said. Russian McDonald's serve almost 500,000 people per day, he added.

The 22,000-square-meter plant will allow Cremonini to better serve Russia's hotels and restaurants as it looks for other deals including the possibility of catering on the country's new trains, the executive said. The plant should be finished by the end of the year, he said.

State-owned Russian Railways said Feb. 9 that they would cooperate with Finmeccanica, Italy's largest aerospace and defense company, to build a high-speed rail line between Moscow and St. Petersburg.

Cremonini, which is one of Europe's biggest providers of food service on trains, already offers catering on high-speed rail lines throughout Europe, including in Italy, France, Spain and the tunnel beneath the English Channel.

Fourth-quarter profit at Cremonini rose 15-fold after the company made acquisitions in catering, it said Feb. 13. Net income surged to 2.4 million euros from 158,000 euros a year earlier, while sales rose 6.3 percent to 574.6 million euros.

The results include the purchases of Rail Gourmet Espana and Moto catering companies. Last month Cremonini also agreed to buy New Catering through a unit.

Shares of Cremonini have gained 9.2 percent this year, beating the 1.5 percent decline of Italy's all-share Mibtel Index.

On Friday, the share price gained 6 euro cents, or 2.3 percent, to 2.63 euros at midday in Milan, giving the meatpacker a market value of 373.3 million euros.

Cremonini said the company, which has no further acquisition plans for the time being, expects its market share in Italy to rise to 25 percent from 18 percent in the next three years.

"We want to acquire clients not companies," he said.

Outside of Russia, Cremonini is targeting African countries including Angola, Congo and Algeria.

"There is a significant request for proteins in these areas as oil money brings development," Cremonini said.