Groupe Danone Strengthens Ukraine Presence

08/09/06 Groupe Danone has acquired the Ukrainian fresh dairy company JSC Molochnyi Zavod “Rodich”. Molochnyi Zavod “Rodich” enjoys a strong market position with its Rodich and Vesely Pastushok brands, and posted sales of 10 million euros in 2005. As a result of the acquisition, Danone said it will benefit from significant additional local distribution capabilities, as well as access to a strong milk sourcing network and production platform.

Danone has been active in the Ukrainian market since 1999 with imported added-value products such as Activia, Actimel, Rastichka, and Danissimo. This acquisition will enable Danone to strengthen its existing Ukrainian portfolio by adding traditional products, such as kefir and smetana, thus providing Ukrainian consumers with an enhanced range, produced mainly in their own domestic market.

The completion of the transaction is subject to the fulfilment of certain conditions including regulatory approvals.

With annual per capita fresh dairy consumption in Ukraine averaging 4 kg, compared with 22 kg in Western Europe, the Ukrainian fresh dairy market offers promising scope for development. The average annual growth for the last three years has been in excess of 15%.

Danone already holds a strong position in Eastern Europe. In Eastern Europe, Groupe DANONE posted sales of EUR 1,2 billion in 2005 with strong positions in Russia (n°1 in fresh dairy products and biscuits), Poland (n°1 in fresh dairy products and bottled water), Czech Republic (n°1 in fresh dairy products and biscuits), Hungary (n°1 in fresh dairy products and biscuits), Romania (n°1 in fresh dairy products), Bulgaria (n°1 in fresh dairy products).