Sausagemaker Dymov Buys Up Competitors
Vadim Dymov, owner of OOO Dymov Sausage Works (Dymovskoe kolbasnoe proizvodstvo), is negotiating to acquire several meat processing plants in various parts of Russia. He intends to spend about $150 million for that purpose. Analysts note that, due to the crisis on the market for meat and the lack of interest in production assets on the part of other parties on the market have made meat processing plants quite affordable.
Kommersant found our about Dymov's negotiations from several sources on the market and Dymov has confirmed his intentions. He said that the first deal would be announced in the near future. He will use 800 million rubles in funds that Dymov Sausage Works will provide him in September as well as other borrowed funds. Kommersant's source also said that Dymov Sausage Works has received purchase offers from the Spanish company Campofrio Alimentacion (owner of Kampomos), the American Tyson Foods and several Russian meat product producers in the northwest of the country. Jose Miguel Darido, manager of the international division of Campofrio, confirmed that the company had made several offers for the Russian company, all of which have been refused. The paper's source, however, says that a Campofrio offer in the $80-100-million range will be considered by the Dymov Sausage Works board of directors in September. Campofrio has assets in Russia worth at least $125 million. Tyson Foods declined to comment on the question. The American company made its wish to sell its only Russian asset, the Tushinsky Meat processing Plant, known a year ago. That plant has a capacity of 10,000 metric tons per year and is estimated to be worth $20-25 million.
Besides Dymov Sausage Works, Vadim Dymov is co-owner of the Ratimir company, which owns meat processing plants in the Russian Far East. The annual turnover of those companies is at least $300 million per year. Experts say that the success of Dymov's attempt to operate on a national level will depend on the company's ability to maintain itself in its premium-quality niche. The high-end market for meat products in Russia is worth $2 billion per year. It accounts for 10 percent of the total market in volume and 15-20 percent in monetary terms.
Dymov has chosen the time for his move well. “Now only companies remain that have access to meat resources and are oriented to the production of products with high added value to cover the deficit in the operational margin with a high selling price,” explained Dmitry Kolokatov, general director of Agrika Produkty Pitaniya. Musheg Mamikonyan, head of the Meat Union of Russia, noted that “the majority of large players are now busy solving the problem of raw materials,” since a shortage of beef and pork has forced the price of meat up by 30 percent in the last six months, “and active demand for meat processing assets can be expected only in two or three years.”
Svetlana Mentyukova, Marina Chistyakova
All the Article in Russian as of Aug. 24, 2006
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Photo: Mikhail Razuvaev
