The new joint venture, called Zeelandia Ost-West, is intended to bring a wider range of products particularly to the Russian market, where Zeelandia has been working on expanding its market share for the past decade. The company said it had already been working with East West Services during that time, with a focus on confectionery products tailored for Russia.
The JV is intended to build on this experience, and it has recently set up a local production facility near Moscow, which is due to start production of powder-based products like bread and confectionery mixes later this year.
Zeelandia Ost-West managing director Grigory Rysin said in a statement: “Local production means a substantial reduction in transport costs and delivery times and largely eliminates currency risks and import duties. This enables us to offer competitively priced, tailor-made products for a wide variety of customers including large industrial bakeries, which dominate the Russian bread market. Local production also gives us the flexibility to produce smaller batches, if necessary at short notice.”
The entry into Russia marks Zeelandia’s entry into its third BRIC market. It already has a permanent local present in Brazil and China.
CCO of Koninklijke Zeelandia Group Guido Janssen said: “The BRICs represent substantial growth markets. To seize the opportunities in these markets we want to serve our customers with a wider range of products designed for their specific, local needs.”
Zeelandia Ost-West will serve all customer segments in Russia and Kazakhstan – either directly or through distributors – apart from the catering and foodservice sector, which will remain under East West Services.