On Wednesday, the American Mars Incorporated launched a new wet feed production line with the investment volume of $1.7 bln.
Mars Petcare (the company’s subdivision responsible for pet foods production) is investing USD 70 mm into the Pet Center for studies of pets' dietary habits and development of new products in Ulyanovsk Region. TASS has been told so by Mr. Valeriy Shchapov, Mars President in Russia.
"We have great plans and are launching our factory in Rostov-on-Don and inaugurating our Pet Center in Ulyanovsk, our R&D center for studies of pets' dietary habits," he said.
The Mars company will invest about 5 bln rubles to the reconstruction of the dry feeds production plant in the Stupino District, the Government of the Moscow Region informed. Five plants of the company operate in the territory of the region: Mars LLC (Stupino District, production of chocolate, animal feeds), Mars LLC (Lukhovitsky District, production of sauces), Odintsovo Confectionery Factory (Odintsovo District), Ruscan CJSC (Dmitrovsk Municipal District, production of pet feeds, Ruscan OJSC, Royal Canin trademark). According to the authorities, from 1994 to 2014 the company invested $700 mln in the region. Annual taxes to the regional budget are estimated to be 2 bln rubles.
The Rostov Region will become the leading manufacturer of animal feed in the South of Russia as soon as the U.S.’ Mars has launched its new plant there. Investments in the new production facility have already amounted to RUB 4 billion, Governor Vasily Golubev said today.
Mars’ plans to build a new factory in the Rostov Region were announced this June at the St. Petersburg International Economic Forum (SPIEF), when a corresponding memorandum was signed by Vasily Golubev and Valery Shchapov, CEO of Mars LLC.
The total area of the plant that is currently under construction will reach 16,000 square meters and will be subject to further extension. The facility is projected to be launched in the first half of 2017, and the first products will be available for sale in August.
According to Chairman of the Board of Mars Incorporated Victoria Mars, the future plant will become the company’s tenth factory in Russia. “The first type of product to be manufactured in Rostov will be wet animal feed, whereas dry feeds will be manufactured upon completion of the second stage of the project. Raw materials for production, including meat byproducts, cakes, grains, and meals will be purchased from local suppliers — agricultural companies of the Don area,” a spokesperson for the Investment Development Agency of the region told TASS.
Mars has been given the go-ahead to start construction of a pet food factory in the Rostov Region. The deal was announced by the General Director of the Investment Promotion Agency of Rostov Region, Igor Burakov. According to Burakov, the company will be able to start construction of the foundations for the future factory, which will be located in Grushovskoe in the Aksay District, within the next few weeks. The first stage of investments amounts to 4 billion roubles ($60 million). “Mars is a very conservative company, so if it has announced a sum of 4 billion roubles, then I have no doubt that it will make full use of these funds within the next 18 months. Construction work has already begun, and if everything goes according to schedule, then production should be launched in late 2016,” Burakov explained. A memorandum of cooperation was signed between Mars and the Rostov Region at the St. Petersburg International Economic Forum in late June. The new factory is expected to create more than 200 jobs. It will purchase various meat and vegetable ingredients from Rostov-based APK (offal, oilseed meal, grain, corn, etc.). Mars is one of the largest companies in the CIS specialising in the production of pet food and pet grooming products, with an annual turnover of more than $33 billion. The company entered the Russian market in 1991. The Rostov factory will be its tenth in Russia. Mars manufactures products under the Pedigree, Whiskas, Kitekat and Chappi brands, among others.
A new M&M’s chocolate production line has opened at the Mars plant in the Moscow Region town of Stupino. A total of RUB 3 billion were invested in this production line, TASS reports. The production line will produce M&M’s for the Moscow Region and all of Russia and will increase the entire plant’s capacity by 18%. A total of 76 new jobs were created as a result of the new line. A 1-hectare park has been established next to the new building.
Moscow Governor Andrei Vorobyov took part in the opening ceremony. “The investment and technology being implemented here deserve respect. RUB 3 billion is a large and significant amount of money, particularly right now, for our country’s economy,” he said.
Jean-Christophe Flatin, the president of the Mars Global Chocolate, said that Russia and the Moscow region are a very important strategic market for the company.
Mars works in 73 countries. In Russia it has nine plants that produce chocolate, confectionery goods and chewing gum as well as pet food and manufactures products under the brands Mars, Snickers, Bounty, Milky Way, Whiskas and Orbit, among others.
Southern Russia is the largest market for the company in the cat food sector. Mars is set to build a factory for the production of wet cat food in Rostov Region’s Aksaysky District. The project will cost 4 billion roubles (around $75 million). The corresponding agreement was signed by Rostov Region Governor Vasily Golubev and Mars CEO Valery Shchapov. According to Anatoly Vereshchagin, PR Director at Mars, the factory will be the company’s tenth in Russia, and the fifth for the production of pet food.
Mr Vereshchagin did not disclose the planned production capacity of the project. In 2011, Mars announced that it had spent 1.3 billion roubles on the construction of a factory in the Ulyanovsk Region that would produce 45,000 tonnes of wet pet food per year. This equates to $43 million at the Central Bank exchange rate for the beginning of 2010, when the factory was put into operation. Judging by these figures, every million dollars invested in production facilities generates 1050 tonnes of product. At the current exchange rate (as of 19 June 2015), 4 billion roubles buys $75 million.
According to a joint statement by the company and the regional government, construction work on the factory is set to begin in the second half of 2015 and will last for around two years. Mars has already purchased a 50-hectare land plot for the purpose. Aksaysky District governor Vitaly Borzenko told Vedomosti that it was bought over the course of three to four years.
Explaining the decision to base production out of Southern Russia, a Mars spokesperson said that it was the company’s largest market in terms of pet food consumption, making up almost 20% of the total market share. According to the company’s data, 4.3 million cats and 3.4 million dogs currently live in the Russian south. This equated to 14.8% and 19.2% of the country’s feline and canine population, respectively.
“In addition, the pace of sales in the Southern Federal District outstrips that of other regions and is the highest in the country: in 2014, sales in the region grew by 11%” Vereshchagin added. He went on to say that localising production in Rostov Region was advantageous from the point of view of logistics and the availability of raw materials.
Borzenko further explained that the new factory’s location – next to the soon-to-be-completed airport and the M4 Don Federal Highway, just 30 kilometres from the city of Rostov – was also a deciding factor.
Company's website: www.mars.com
T: +1 973 691 3536
Contact: Grant F. Reid, company President
Mars is one of the world’s leading manufacturers of foodstuffs and pet food.