Potato processor Lamb Weston has established a new joint venture with vegetable company Belaya Dacha to serve Russia’s French fry market, supported by the construction of a new French fry factory in Lipetsk, western Russia.
The agreement to establish a new joint venture was signed by Lamb Weston CEO Bas Alblas and Victor Semenov, chairman of the supervisory board of Belaya Dacha.
Its total investment of €100 million in the Lipetsk production facility will be used to support key customers in the rapidly growing Russian French fry market, the two companies said. The close collaboration will enable the two firms to combine their complementary knowledge and skills in the region.
Lamb Weston CEO Bas Alblas said: “Our new joint venture will provide us with a unique opportunity to expand our position in the Russian market, while supporting our international key clients in optimising their own value chain, growing their businesses in the region and meeting local needs.”
Victor Semenov, co-owner and chairman of Belaya Dacha, added: “Both companies benefit from each other’s unique knowledge, skills and expertise. We can take advantage of Lamb Weston/Meijer’s in-depth experience in potato growing and high-quality French fry production, while leveraging Belaya Dacha’s experience in the Russian quick service and retail market and our own construction division.”
Belaya Dacha will be the majority shareholder in the new joint venture, which, to secure potato supply, will make use of its own farm in the Tambov region and work closely with dedicated Russian potato farmers.
The new factory will be the first French fry factory in Russia, Lamb Weston claimed. It will be constructed in the special economic zone in Lipetsk, situated 375km south of Moscow. The start of construction is planned for mid-2016 and production is projected to start early in 2018. The French fry plant will have a production capacity of 90,000 tons per year when it is completed, supplied by a dedicated network of Russian farmers.