21 Aug 2009 14:26

Cherkizovo Group founder to invest 10 bln rubles in dairy business, open mini-bakery chain

MOSCOW. Aug 21 (Interfax) - Igor Babayev, the founder of meat producer Cherkizovo Group, is planning to invest 10 billion rubles in milk production over the next three years and expand his business by opening a chain of mini-bakeries.

During a presentation of his book titled 'I Am Calling For An Agricultural Revolution,' Babayev told journalists on Friday that his new company Milk Holding would open its first dairy plants in the Tambov and Lipetsk regions at the end of September and immediately start shipping products to other regions. The plants will have capacity to produce 40-45 tonnes of milk per day.

Milk Holding is also setting up family farms in these regions. Some of them will launch operations by the end of the year, while the rest will be up and running in 2010, he said.

Each region will need about 1 billion rubles for their operations. The project is being carried out with loans from several banks, including Russian Agriculture Bank , Sberbank and Gazprombank.

Babayev said the products produced by these farms and plants would have the competitive advantage of not being marked up at the level big chains do.

He also announced he is setting up a chain of mini-bakeries in the regions where the plants are being built. Investment in this project will total $100,000 in its initial stages, he said.

Each mini-bakery will have an area of 50,000-70,000 square meters. In addition to baking and selling bread, cafeterias will be set up at the bakeries. Their products could also be delivered to restaurants. The company has already reserved facilities with 100 square meters in the Lipetsk and Tambov regions.

The creation of the mini-bakery chain is part of Babayev's NAPKO project, which plans to start producing 1 million tonnes of grain next year, in addition to the development of his elevator group. The company is planning to open a new elevator in the Voronezh region this year with capacity to store 300,000 tonnes of grain.