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Black Sea Region as Investment Destination: Kraft Foods Experience
Taras Lukachuk Vice President and Area Director, Kraft Foods, Ukraine and
New Markets of Eastern Europe and Central Asia
III International Black Sea Economic ForumUkraine, 2012
…………………………………………………………….................Food, Beverages & Tobacco Industry as One of the Key Economic Sectors in the Black Sea Region
2007
2008 2009 2010
Share in the industrial production, 2007-2010, % of value added in manufacturing*
25 %18 %
21 %
11 %
19 %6 %
III International Black Sea Economic ForumUkraine, 2012
*Source: The World Bank data
31-74% of households income in Black Sea region is spent on food
Low per capita consumption: significant growth potential
10-20% of food produced in the region is exported
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Food production index growth, 2006-2010
III International Black Sea Economic ForumUkraine, 2012
One of the main tax-payers to the state budgets
(in Ukraine: $37 MM in 2011)
24% - average rate of
manufacturing labor force employed in the industry
*Source: The World Bank and the Food & Agriculture Organization of the UN data
+7% +10% +11% +12%+21%
Ukraine BulgariaTurkey Armenia Azerbaijan
…………………………………………………………….................Food Production Is One of the Fastest Growing Industries in the Majority of the Black Sea Countries
Up to $170 bln generated by the industry
in the region in 2010
…………………………………………………………….................Kraft Foods Is One of the Key Investors in the Region
$1 bln over the last 18 years
III International Black Sea Economic ForumUkraine, 2012
The overall investments of the company into the Black Sea region amounts up to $2,5 bln over the last 18 years
Kraft Foods total investments, $
…………………………………………………………….................
Iran
Kraft Foods Ukraine: Managing the Area of 12 Countries
Ukraine + New Markets of Eastern Europe: 80 million population
Central Asia + Mongolia: 60 million population
Geographic Area: as large as Europe
“Mature” Ukraine business used as a management hub for 12 countries
III International Black Sea Economic ForumUkraine, 2012
In the Black Sea region Ukraine is managing
Azerbaijan, Georgia and Moldova businesses
…………………………………………………………….................Ukraine Is Managing 12% of the Kraft Foods investments into the Black Sea Region
$250 MMover the last 17
years
III International Black Sea Economic ForumUkraine, 2012
$29 MMover the last 7
years
Azerbaijan, Moldova and
GeorgiaUkraine
Investments into media,
infrastructure & distribution systems
> $ 40 MM investment in
greenfield biscuits production in 2011
…………………………………………………………….................Kraft Foods Ukraine and New Markets: Key Achievements
From one country to 12 in the area. 1800
employees
From $5mln in 1994 to over $600MM in 2011. Profit and growth rates above global average
Market leader in chocolate, coffee, salted snacks and biscuits. Renewed positions in gum
Doubled business in last 3 years despite
crisis. 1 of 10 priority markets for Kraft
FoodsTotal New Markets
business grew 18x in 7 years via organic growth, geographic
expansion and global acquisitions
III International Black Sea Economic ForumUkraine, 2012
Management Team consists 100% of Ukrainians.
Ukrainian managers started up new businesses in EE and
CA
…………………………………………………………….................Sustainable Business Growth of the New Markets in the Black Sea Region
g
g
g
g
g
III International Black Sea Economic ForumUkraine, 2012
g
Moldova, $MM
Georgia, $MM
Azerbaijan, $MM
Moldova business grew 5x, Georgia 17x, Azerbaijan 48x-fold in 7 years
…………………………………………………………….................Realistic Optimism Is What We Think About the Black Sea Region…
We believe in potential of the Black Sea region and have
many years of positive experience to do so
We learned how to manage difficulties in the region, while are
excited about the opportunities
Our approach: realistic optimism
III International Black Sea Economic ForumUkraine, 2012
Thank you!
…………………………………………………………….................
III International Black Sea Economic ForumUkraine, 2012
