Ukrproduct

Ukrproduct is a Ukrainian dairy conglomerate created out of former state-owned companies. It is the first Ukrainian trading group to be listed in London, having floated on AIM in February. The company raised £6m gross at IPO, which will be used to redeem its domestic high-coupon debt and to facilitate a capital expenditure programme for expansion. Specialising in packaged butter and processed cheese (where it is market leader) as well as powdered milk, Ukrproduct increased sales by 54% to £27.1m during 2004 and pre-tax profits were up £500,000 to £1.7m. The company is looking to grow by improving its existing distribution network and offering its logistics and supply chain management to third parties. On the factory front, it is installing a state-of-the-art manufacturing facility at Molochnik, which will increase the production of processed cheese to 2,000 tons per month. Ukrproduct also intends to move into the hard cheese sector in 2006/7 and is mulling over its options in constructing a new plant specifically for this new product. While the company appears stable, growth will have to stem from geographic expansion or new products. Speculative for now.

Sector: Food Producers

Companies: Ukrproduct

Market cap: £27.8m

PE Forecast: n/a

Share price: 67.5p

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