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Gazprom Sells to Borjomi
The sale of Georgia' famous Borjomi mineral water has been banned in Russia for two years, but the international holding company that produces it, IDS Borjomi Group, has returned to the Russian market with the purchase of 99.99 percent of the Lipetsk mineral water producer Edelweiss L from companies affiliated with Gazprom. The estimated sale price is $25-30 million. According to a Gazprom source, IDS Borjomi has been managing the Lipetsk company since January 2007. The sale was agreed on in December 2006 after an open auction for the company with a starting price of $7.9 million, and the final payment for the company was made last December.
OOO Edelweiss L was founded in 1997. Its main products are three brands of mineral water that occupy 30-35 percent of the market in Central Russia. Its receipts in 2007 totaled 537.7 million rubles, and its net profit was 29 million rubles. IDS Borjomi Group owns the Borjomi works in Georgia as well as the Mirgorodskaya, Morshinskaya and Truskavetskaya mineral water plants in Ukraine. It control about 25 percent of the Ukrainian mineral water market and 60 percent of the Georgian market. Its net receipts in 2007 were about $200 million. The group belongs to Salford Capital Partners.
Before it was banned in Russia, Borjomi occupied 13 percent of the bottled water market in Russia's ten largest cities, trailing behind BonAqua (14.6%) and Aqua Minerale (14.4%). Edelweiss has a 4.2-percent market share nationally, and Mirgoroskaya and Morshinskaya have a 2-percent combined share. In 2007, 340 million decaliters of mineral water was sold in Russia for $1.5 billion, and the market is growing by 30-35 percent annually.
www.kommersant.com
All the Article in Russian as of Mar. 03, 2008
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