Laima makes caramels in Russia

RIGA (BNS) - Latvian-Russian joint venture Laima could begin
production in Novgorod, Russia, next spring, Latvia's candy and
chocolate producer Laima told the daily Diena.

Laima's board chairman, Ivars Kalviskis, said that legal formalities
were still being settled, but initially Latvia's Laima will hold 74
percent in the joint venture in Russia.

In four or five years the Russian partners will increase their share
in the company to 49 percent and the Latvian party will own 51
percent of its capital.

Latvia's Laima is ready to invest $2.1 million in the facility in
Russia. The joint venture located in Russia will also be called
Laima, but in the beginning it is likely to produce caramels under
the Uzvara trade mark. It is expected that the factory's turnout
could take 1 percent of the entire Russian market, Diena reported.

Kalviskis said that all efforts had been taken to minimize the risk
related to opening a production facility in Russia.

When the idea about a joint venture was conceived two years ago, the
original plans provided for establishment of a chocolate factory.

"After the economic crisis in that country, we understood that it
would be a failure and decided to open only the caramel production
facility for now," Kalviskis said.

He said the decision was made to avoid the need for foreign-supplied
raw materials as it would have been the case with production of
chocolates.

"Only domestic raw materials will be used, and all payments will be
in rubles," Kalviskis said.

Laima is a company of Latvia's Ave Lat Grupa food concern. In the
first nine months of this year Laima had a turnover of 9.58 million
lats ($16.8 million).