Joint acquisition by PepsiAmericas and PepsiCo of Mykolaiv-based juice maker Sandora holds out benefits to both parties and is expected to contribute to local economic development, according to the Ukrainian company.
Sandora PR Officer Valeria Trifonova told the LED Monitor on Wednesday that the deal will give an impetus to the company's further development. She explained that last year Sandora launched its second plant in the Mykolaiv Oblast that still has room for twenty more production lines. "This requires big investment. PepsiCo is willing to invest into development. It is willing to extend our brand portfolio, introduce its brands here using Sandora's capacity," she said. "This implies expansion of production, new jobs, and additional tax revenues."
She said it is too early to give any estimates of future investments and new jobs, just pointed out that a long-tem plan of Sandora is to enter new markets, including those where PepsiCo sells its products.
Ms. Trifonova also said that PepsiCo has an intention to invest into development of farming in Ukraine, in particular growing of tomatoes. The farmers, however, will have to meet PepsiCo quality standards, "which are very high, even higher than European standards," according to the PR officer.
In a press release on Monday PepsiAmericas and PepsiCo announced completion of joint purchase of 80 percent interest in Sandora, with remaining 20 percent of the stock expected to be acquired in November 2007. The press release quotes PepsiAmericas Chairman and CEO Robert C. Pohlad as saying, "We're excited to extend our strong partnership with PepsiCo and begin working with the Sandora team and its market-leading brands to capture the growth opportunity in Ukraine."
Sandora, a limited company, was established in 1995 as joint Ukrainian-Lithuanian venture. Today its share of the Ukrainian juice and juice products market is estimated at about 47 percent. The Sandora product line also includes wine, tomato paste, and fruit and vegetable instants – a total of more than 300 items, according to the company's web site. Sandora exports a quarter of its products to 24 countries, accounting for nearly half of Ukrainian juice exports.
The city of Mykolaiv recently adopted an Economic Development Strategic Plan drafted with assistance from the USAID LED project. The plan focuses on three critical issues including investment attraction. Sandora was polled under a Business Attitude Survey conducted in Mykolaiv as part of the strategic planning process in 2006.