Food Union to invest EUR 11.1 million and build a Centre of Excellence for fresh dairy products

Food Union will invest a total of EUR 11.1 million to build a Centre of Excellence for fresh dairy products over the next two years. The development of the Centre of Excellence will include three parts: the construction of a new production house worth EUR 2 million, and the purchase of new production equipment worth EUR 2.85 million aimed at developing new and innovative products and expanding their range. Also it will include concentration all production in one place in Riga, namely on-site the AS Rīgas piena kombināts. EUR 6.25 million will be invested to transfer the production of SIA Rīgas piensaimnieks to the territory of AS Rīgas piena kombināts and to upgrade current infrastructure of AS Rīgas piena kombināts.

“The timing for the next step of development is very significant. Namely, on the eve of the 90th anniversary of Rīgas piena kombināts, we announce the reunification of the company that was once divided. Established in 1928 and grown to two production facilities on the right and left bank of the Daugava in 1963, and later divided into two companies in 1990, Rīgas piena kombināts has contributed to the 100-year history of the Latvian state. We are incredibly pleased to continue the development story of the Latvian state and now of Food Union, awaiting this important anniversary with a wide range of already popular and new products,” says Normunds Stanevics (Normunds Staņēvičs), Chairman of the Board of AS Rīgas piena kombināts.

The development of the Centre of Excellence will last for about two years and will proceed in succession. For 2018, the plan is to purchase two new curd snack production lines and one new line for drinking yogurt in new packaging solutions with a purpose of developing production in these categories. Thus, we are planning to increase the production capacity, to expand the range of products and to strengthen the brand of Food Union products in the market. In addition, Food Union will invest EUR 2 million in the development of a new and modern production facility.

“Food Union has been focusing on the product innovations and advanced production technologies since its foundation in 2011, when the company invested more than EUR 30 million during a year to purchase new production equipment. Now, six years later, the company is ready for the next big step of the investment plan, namely, to centralize the production in Riga and to develop the Centre of Excellence in order to continue to be the product innovation leaders in the fresh dairy product categories,” adds Normunds Stanevics.

“The production of the favourite curd snacks Kārums in the existing production premises has reached its capacity ceiling. We cannot produce more curd snacks on the existing lines, as well as the development of new products with the existing technologies and in the existing premises is very limited. Meanwhile, the demand for the curd snacks continues to grow both in Latvia and abroad, besides, we see a great potential to develop this category in new formats. Therefore the transfer of curd snacks and other Kārums products to new, fresh and spacious premises, as well as an access to the latest technologies will enable us to create innovative products with double capacity to please our customers,” says Arturs Cirjevskis (Artūrs Čirjevskis), Member of the Board of SIA Rīgas piensaimnieks (Food Union group).

For 2019, the plan is to start the transfer of the entire production of SIA Rīgas piensaimnieks to the newly built Centre of Excellence, thus concentrating both the production of fresh dairy products and ice cream in one place. This will allow the company to make the production processes more efficient, to simplify logistics, to reduce costs in the long term, and to focus more on product innovations. The investments in transferring the production and improving various infrastructure projects will amount to EUR 6.25 million. All the work on the development of the Centre of Excellence should be completed at the beginning of 2020. A new owner for the existing real estate of SIA Rīgas piensaimnieks will be sought.