Belarus & Russia: Baltika is likely to participate in Belsolod reconstruction
Belarus Government made a call on Baltika Brewing Company to participate in the reconstruction and the modernisation of Belarusian Belsolod. Previously, the Belarusian Prime-minister Sergey Sidorskii affirmed it was ready to offer to the Russian brewery a production ground for the investment projects accomplishment, The Union of Russian Brewers communicated June 07.
Experts estimated this initiative can be envisaged as a possible oncoming join progress for Baltika and Krinitsa. In the mean time, it appeared that Belarusian authorities are asking the Russian brewer for money aiming to reconstruct and expand the malting facility. Baltika officials said that Belsolod is offering a potential interesting investment ground, among other possible investment projects. Analysts estimate Baltika can be interested enough to invest in the malting facility only if it is provided with a control stake in Krinitsa. Otherwise, the Russian brewer wont get any substantial advantage in conquering the Belarusian market.
Baltika press-service confirmed that Belarusian side did make an offer to participate in the reconstruction and the modernization of open society Belsolod. During the Baltikas heads visit to Belarus in mid-May this year, the Belarusian Government has expressed the willing to have Baltika participating in Belsolod reconstruction process. But Baltika officials specified that sides didnt conclude any specific project. Presently Baltika is not interested in a particular production field, the company is rather interested in enlarging its overall presence on the Belarus beer market - the company said. In fact, the Belarusian side didnt provide any serious proposals concerning any companys share acquisition opportunity, including Krinitsa.
Analysts from IC Finam provided that Belarusian authorities are willing to bid no more than 49% of Belsolod shares in return for the money meant for the malting facility reconstruction. According to them, Belarus politics supposes that the companys controlling stake cant be alienated. Experts from the Russian marketing association estimate Baltika can adhere to such circumstances. The project fits the companys development concept experts said.-Baltika plans to surge on other beer markets, and the Belarusian market is interesting and large enough and which competes by volume with the market of a big Russian region. The company has all the motives to infiltrate in this market. Competition is still low in Belarus beer market experts say. - And Baltika is territorially neighboring Belarus, thus this will allow for low business -process building costs. Analysts conclude that Belsolod is the most attractive asset for Baltika at this moment.
In the mean time, analysts from IC Metropol dont find Baltikas union with Belsolod an optimal one. This project is about to require large investments they said. Taking into account the fact that Baltika doesnt own a production facility in Belarus, this project doesnt look very expedient. Owning a malting facility is advantageous if only the malt can be supplied to its own breweries, subsequently allowing to brew cheaper beer because of a lower brewing cost in comparison to other brewers. They claim that purchasing Belarusian malting facilitys shares is a reasonable choice only if Baltika has a plan of further purchasing a brewing facility in Belarus.
Hence, the opportunity of purchasing shares in Krinitsa can be interesting from an other point of view, given the possibility to supply malt to Baltikas facilities located in the European Russian territory delivery can be less costing. Belarus is seen as a region, which will accommodate the companys main malting facility. It is likely that this malting facility is needed to supply malt to Russia and Ukraine. Baltika will accomplish few in terms of conquering the Belarusian beer market by purchasing shares in Krinitsa which doesnt allow for a controlling stake.
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