Foreign oil companies may pull out of Russian projects and several automobile joint ventures have been postponed, but international food processing companies feel now is the time to move production to Russia.
Three major Western food producers – Germany's Ehrmann, the Netherlands' Campina and France's Danone – (to press) ahead with their plans to build yogurt factories in Moscow suburbs.
"The August [Rouble devaluation] made us realize all the more how important to is to have our own production here," said Christof Muller, head of Ehrmann's Moscow office.
The German company (to begin) building a dairy plant near the town of Ramenky, a 40-minute drive southwest of Moscow, a few weeks after the financial crisis (to break) out in the middle of August.
Estimated to cost around 70 million Deutsche marks ($40.9 million), the factory is to start production next fall. It (to have) the capacity to process 300 tons of milk a day into yogurt, sour cream, kefir and other products, Muller said.
The milk (to come) from local farms, while fruit for the yogurts will initially be imported frozen from Germany, he added.
According to the Ehrmann representative, the company (to import) 43,000 tons of yogurt to Russia, which, by company estimates, (to account) for 25 per cent of the local market.
Muller (to say) the yogurt market could easily double, in the next two or three years. "There (to be) no fear of surplus production," he said.
"The market is far from saturated and there (to be) still plenty of room for expansion," he added.
Another reason Ehrmann (to build) a local production facility is stiff competition from Russian yogurt producers, such as Moscow's Wimm-Bill-Dann. Muller said the idea (to be) to combine Ehrmann's quality "with a Russian image."
Campina, a Dutch yogurt maker, is scheduled to begin work in May on its dairy plant at Stupino, 120 kilometers south of Moscow, (to say) a company executive who wished to remain anonymous.
The plant, which (to cost) more than $40 million to build, is expected to be completed in a year's time. It (to produce) about 84,000 tons of yogurt a year, the executive said.
The French company Danone (to start) work on its dairy plant near the town of Chekhov, 60 kilometers south of Moscow, several months ago, and will have invested around $2 million in the project by the year's end.
According to foreign analysts, the companies (to have) good reasons to establish operations in Russia: cheap labour and raw materials, first of all.
"But some of the calculations made before the crisis – payback periods of investment, volumes and prices – may have to be reviewed," the analysts say.
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Ex. 11. a) Fill each gap with a suitable word from the box.
b) Comment on the type of investment in this deal.
| board | huge | strengthen | benefit |
| provider | approval | praise | buy |
| deal | used | projects |
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