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Business news, 02.05.2007 17:10

Atria Aims at Conveniently Packed Meat

pigs By Yekaterina Dranitsyna

Staff Writer

Atria Russia, the largest meat producer in St. Petersburg, has announced ambitious plans for regional expansion in its attempt to become the market leader.

Atria will start regularly supplying the leading Moscow retail chains and other regions as early as this month, the company’s managers said Friday at a press conference.

Atria hopes to gain a march on its competitors by introducing a number of innovations — sliced meat and, in place of the vacuum system, packaging that can be opened and closed multiple times.

“In Finland we became a leader by launching this type of packaging five years ago. As a result, our share of sliced products increased by eight percent. Atria Group sales grew by 21 percent,” said Juha Ruohola, general director of Atria Russia.

Ruohola expects the share of sliced products in the St. Petersburg market to double over the next few years.

The company also plans to expand its meat assortment and introduce new product categories. At the moment it produces about 200 different products.

In 2005, Atria Group acquired the St. Petersburg-based meat producer Pit-Product, which, at that time, was the second largest meat company in St. Petersburg with 15 percent to 20 percent of the market. Pit-Product had two production sites — in St. Petersburg and the Leningrad Oblast.

“Last year we decided to invest 70 million euros ($100 million) into a new plant in Gorelovo, Leningrad Oblast. The project will be completed by 2008,” Ruohola said.

As a result Atria’s production capacity in Russia will increase from 80 tons to 180 tons per day. The managers expect sales in Moscow to provide 20 percent of the total turnover while other regions should account for 15 percent, said Yulia Kravchuk, Director of Marketing at Atria Russia.

Atria is in negotiations with retail chains in the regions. However at the moment the company does not plan any new acquisitions in Russia.

“We are focusing on organic growth and the new production facilities and 17 hectares of land that we have in Gorelovo give us opportunities to increase sales if required,” Ruohola said.

Last year Atria Russia turnover accounted for 74.1 million euros — a 39 percent increase on 2005 figures. According to AC Nielson data, Pit-Product products account for 25 percent of the market in St. Petersburg in money terms.

“Such turnover is impressive. But we have to take into account that other meat producers are also increasing production. Because of the recently introduced law on the meat industry we can expect that companies will merge and unify,” said Vadim Somov, executive director of the Russian Meat Union.

Atria could become a market leader, if it starts the active acquisition of regional plants, Somov said.

To attract customers Atria is rebranding itself. As well as a new design the new packaging offers other significant advantages. “Product storage life has been doubled, the package is more convenient for transportation and easier to use,” she said. 13 products will be sold using this new type of packaging.

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