Nestle, one of the world's largest food companies, has made a new investment in Ukraine's economy by acquiring VAT "Volynholding," whose products are known under the trademark "Torchynproduct."

Nestle Corporation announced the signing of an agreement with the Ukrainian company "Volynholding," whose products are sold under the well-known trademark "Torchynproduct," for the acquisition of 100% of the shares of this enterprise. The agreement was signed on November 7, but it becomes effective on December 1, 2003. The amount of the contract remains undisclosed. "Volynholding" is a young company that is developing dynamically, and its main products - mayonnaise, ketchup and mustard - occupy strong positions on the Ukrainian market.

The acquisition of VAT "Volynholding" near Lutsk is Nestle's second significant investment in Ukraine's economy, after the purchase in 1998 of a controlling stake in the "Svitoch" confectionery factory.

The management of Nestle Ukraine reported that no fundamental changes in the company's management or sales policy are envisaged. However, the new head of "Volynholding" will be a representative of Nestle Ukraine. He will be Vladyslav Andreyev, who has experience working with Nestle since 1998.

Leo Wencel, director of Nestle Ukraine, said: "Together with this acquisition, we have gained a third main pillar in our operations in Ukraine - along with coffee and chocolate, we now have culinary products." Already today Nestle is the leader in culinary production in the markets of many countries, including Poland, Germany, and Switzerland. "We intend to take the same leading position in Ukraine as well," said Mr. Wencel.

The new management also plans to create a center of expertise for ketchup and mayonnaise in Ukraine on the basis of "Volynholding." New products from "Torchynproduct" under the new management are planned to delight Ukrainian consumers as early as next year.

Reference: VAT "Volynholding" is a major producer of sauces on the Ukrainian market. It has been operating since 1994. The main production facilities are located in the village of Torchyn, Volyn region. According to estimates by various specialists, in the mayonnaise segment the company holds about 40%, ketchup - 60-70%, mustard - 40-45% of the market. In 2002, the company's turnover amounted to 55 million US dollars; in 2003 it is expected to be at the level of 60 million dollars. The company's profits accordingly amount to 12 million hryvnias in 2002 and 17 million hryvnias (forecast) in 2003. Production growth compared to last year is about 10 percent. The company's former shareholders were private individuals, including foreign ones.

Nestle is the largest food producer, the eighth largest company in Europe, and also the thirty-first largest company in the world. The Nestle group employs over 220 thousand workers. Nestle owns 479 factories and industrial enterprises in 81 countries. Nestle's product range currently includes 8.5 thousand food trademarks.

In December 1994, the representative office of Nestle was opened in Ukraine, which since then has been conducting active marketing and advertising support here for such world-famous brands as Nescafe, Nesquik, Maggi, Nuts, Friskies and Nestle baby food.

In 1998, Nestle acquired a controlling stake in the "Svitoch" confectionery factory in Lviv, which produces chocolate and other confectionery products. Since then, the company has made and continues to make large capital investments in the technical equipment and industrial re-equipment of the enterprise.