Mars to increase presence in Russia?

If plans for a new factory, built in Lenin's home town Ulyanovsk, go ahead, Mars will have greater leverage to expand its range of chocolate and confectionery in Eastern Europe's burgeoning market.

The plant will make sweets as well as animal feed, according to the newspaper, expanding on the Snickers, Milky Way and Twix brands, as well as cat and dog food brands such as Whiskas and Pedigree, which Mars already manufactures in Russia.

A local official told the Kommersant that Mars and the local administration had already signed a preliminary agreement for building the new factory.

However, when contacted by ConfectioneryNews.com, Mars refused to comment in response to these newspaper reports.

The food company, a subsidiary of Masterfoods, could be looking to boost profits by increasing its presence in Eastern Europe.

Several companies have moved operations to this area recently, as higher production costs and fears over high-fat foods has led to lower profits in Western Europe and the US.

The French chocolate firm Cemoi recently acquired Polish chocolate producer Gryf, while food giant Cadbury has bought factories in Poland and Romania as part of its restructuring of operations.

According to the International Cocoa Organisation (ICCO), consumption of cocoa in Eastern Europe has also gone up, thanks to growing demand for products containing cocoa powder such as ready-baked cookies and chocolate cakes.

The biggest increases in cocoa consumption occurred in Russia, where it grew 8.4 per cent, and Poland, 4.5 per cent, according to ICCO data.