SPIEF 2016: the government of Vologda region, Chagoda Glass Factory&Co and Baltika Breweries signed a Memorandum of Understanding (MOU)

june 17, 2016

Memorandum of UnderstandingThe Governor of Vologda region Oleg Kuvshinnikov, Baltika’s CEO Jacek Pastuszka and CEO of the glass factory David Dzhalagonia laid down their plans to drive cooperation among Vologda region, Baltika Breweries and Chagoda Glass Factory& Co. The MOU was signed in St. Petersburg International Economic Forum on 17 June 2016.

Amid the recent economic volatility, predictability of business environment is becoming a more critical factor of the regional investment appeal. Companies seek to build and support strong win-win relationships with various parties engaged in their business: partners, the public, regional governmental authorities. All stakeholders take an interest in creating a comfortable business environment.

The signed MOU reflects the pursuit of effective and win-win cooperation focused on favorable conditions for the social and economic development of Vologda region, its government and businesses – Chagoda Glass Factory&Co operating in the region and Baltika Breweries, a long-term partner of Chagoda Glass Factory& Co.

Memorandum of UnderstandingThe purpose of the document is to assist cooperation in the social and economic domain of the region in order to drive its potential, support a good investment climate, keep jobs, assist employment, improve conditions for businesses, stimulate investment activity and take measures to foster civilized and responsible alcohol consumption.

Oleg Kuvshinnikov, Governor of Vologda region:
“The good economic foundation helps Vologda to keep the status of a developed region. The positive changes occur also due to rolled-out investment projects in the areas that are of top priority for the region. They all mean that we are firmly underway to create good conditions for investors. We see a goal and still develop policies that focus on the ways to increase the investment appeal of the region, support small and medium enterprises”.

Jacek Pastuszka, Baltika’s CEO:
“We appreciate that the regional authorities work on to create a good investment climate and conditions for business growth. This is truly essential amid the economic volatility. Vologda is one of the regions that keep an eye on the factor of predictability as one of the key conditions for the evolution of business links among business participants.
There is one of the key long-term partners of Baltika in the region – Chagoda Glass Factory&Co. It is one of flagship suppliers of bottles for our manufacture. Amid the market volatility, our partners have also felt the pressure similar to that of our industry over the last years. In these conditions, it is particularly valuable that all parties are ready for a constructive dialog and mutual search of solutions for improvement in the situation in hand. We have had a long-term cooperation. We are sure that the hands-on experience will help us stay reliable partners for each other further”.

David Dzhalagonia, CEO of Chagoda Glass Factory&Co:
“Our companies are known as reliable partners among brewers. We have built particularly close-knit relationships with Baltika throughout 17 years of joint work. Despite the recession in the glass industry, Baltika helped us to retain production capacities, and, most crucially, to avoid layoffs. The proposed MOU provides an opportunity to push relationships to the next level driving smooth operations and growth in the 5-year term. We thank Baltika’s senior officers for their understanding, intention to develop and move forward together. We also thank the government of Vologda region for its all-round support in dealing with financial and economic challenges faced by our company. The MOU will assist to support a good investment climate, stable social situation in the region”.

***

Vologda region is one of the largest entities of the Russian Federation with a diversified economy ranking among the leaders in the industrial production. The region manufactures each 6th ton of rolled products and steel in Russia, each 8th ton of mineral fertilizers, each 2nd bearing, each 10th glass bottle, each 11th cubic meter of plywood and each 3d match. Vologda region ranks among top 20 entities of the country in terms of industrial production per capita. The regional economy has a pronounced focus on exports: companies ship their products to over 100 countries. The foreign trade turnover of Vologda region reached almost USD4bn in 2015.

Baltika Breweries, a part of the Carlsberg Group, is one of the largest FMCG producers in Russia. Since 1996, the company has been ranked Number One in the Russian beer market. Baltika owns 8 plants in Russia and enjoys an expanded brand portfolio. The Company forms a significant part of the Carlsberg Group and its Eastern European region including Azerbaijan, Belarus, Kazakhstan, Ukraine and Uzbekistan. Baltika Breweries is a top exporter of Russian beer: Baltika’s reach includes over 75 countries; the company accounts for over 50% of all Russian beer exports. In 2015, Baltika's products became available in Romania, India and New Zealand. Its brands have won over 670 Russian and international professional and consumer awards.

Chagoda Glass Factory&Co
Chagoda Glass Factory&Co was established in 1931. Its good geographic location and availability of railway boosted the company’s dynamic growth. Initially, the factory manufactured flat glass. In the 80s, its share in the total production of window glass in the USSR was 15%. In March 1999, funded by investors, Chagoda Glass Factory &Co was renovated and converted to a manufacture of glass packaging. By 2006, the total annual capacity of the factory already reached about 740 mln bottles. Driven by a buoyant demand for the products, it was resolved to construct a subsidiary – Chagoda-Lipetsk. In June 2006, a glass factory and the first resident of the special economic zone was registered. Since 2008, Chagoda Group has been justly considered the largest group in Russia as well as a reliable partner among the leading Russian and global companies. The annual production capacities of the sites reach 1.5bn units of glass packaging for the food and alcohol industries. Both plants have up-to-date equipment and use only state-of-the-art technologies.

Move Up