24 Nov 2022 19:38

Olam International sells its coffee production to Russia's Lalibela Coffee

MOSCOW. Nov 24 (Interfax) - Russian company Lalibela Coffee, a full-cycle natural coffee producer under the Lalibela brand, has bought instant coffee production assets located in the Moscow region from Outspan International, a subsidiary of Olam International Ltd.

The deal was completed on November 18, 2022, the Russian company said in a press release.

Outspan International decided to halt its operations in Russia and sell its production facilities, the press release said.

Under the terms of the deal, Lalibela Coffee LLC took over a plant for packing granulated instant coffee into glass jars and doy-packs, which is located in Yakhroma in the Moscow region. Its capacity amounts to 7,000 tonnes per year, which, according to experts, could account for about 7.5% of the total consumption of instant coffee in Russia (consumption of instant coffee as of 2021 was estimated by Rosselkhozbank at 93,000 tonnes).

"We are planning to invest about $9 million in the development of this segment, which with the current deficit of free production facilities and high-quality semi-finished instant coffee (freeze dried) in Russia today will allow the maximum capacity utilization of the plant," Lalibela Coffee CEO Dmitry Gushchin was quoted as saying in the press release. "The product under its own trademark Lalibela will be manufactured [at the plant] in Yakhroma, as well as orders from federal retail chains to produce their own trademarks in the category of instant coffee will be placed there," he said.

According to the SPARK-Interfax analytical system, the main owner of Lalibela Coffee is Ambartsum Safaryan who owns 55% of the company. Gushchin also co-owns a 22.5% stake in the company. Another 22.5% is held by Ruslan Vorobyov.

According to the Vedomosti newspaper, Safaryan and Gushchin are the beneficiaries of Nickors, which, in turn, owns a stake in Rosinter .

Lalibela Packaging LLC was established as a subsidiary to manage the new asset. Jobs and operational processes have been preserved, and the company is establishing the supply of raw materials to ensure continuous production and the launch of new brands.

Lalibela Coffee LLC produces natural coffee under the Lalibela brand. The full-cycle production with a capacity of 5,000 tonnes is based in Smolensk. The company's products, namely, blends of grain and ground coffee, are sold at the largest marketplaces and are represented in federal retail chains and restaurants in Russia.