TH Milk breaks ground on $630m milk processing plant in Russia

Vietnamese dairy company TH Milk has broken ground on a new milk processing facility in Russia as part of its continued investment in the country.

The plant, which will have a capacity of 1,500 tonnes of raw milk per day, will be built in Borovsk – around 90km southwest of Moscow and nearly 8,000km from Ho Chi Minh City.

TH Milk is investing more than $630 million in the plant – the largest single investment into Russian agriculture by a Vietnamese company.

It will source milk for the plant from five purpose-built farms in the Moscow and Kaluga regions of the country: the launch of the first farm for the production of raw milk in the Volokolamsky district of Moscow region took place in the first quarter of 2018.

The launch of the remaining four dairy farms in Moscow and Kaluga regions is scheduled for 2019 and 2020; TH Milk expects to launch a proprietary distribution network by 2020 and will reach full-scale production by 2025, allowing it to take a leading position in the country’s dairy sector.

The ground-breaking ceremony was attended by representatives of the Russian government, as well as the founder of TH Group, Thai Huong.

Kirill Dmitriev, CEO of the Russian Direct Investment Fund (RDIF), the Russian state’s investment vehicle, said: “RDIF’s partnership with leading Asian manufacturer TH Group will promote innovation in dairy production and have a positive impact on the development of the Russian dairy industry. Our joint investments have important social significance – the creation of new high-tech dairy plants will help to reduce the deficit of dairy products in the Russian market and provide consumers with high-quality domestic products.”

The project will utilise end-to-end milk processing technology, involving a complete production chain from growing fodder and milking herd to the production of raw milk and its processing into a wide range of final dairy products. The project provides innovative solutions for increasing the productivity of milking herd, as well as modern technological solutions, including automatic feeding and milking systems.

Vietnamese dairy companies are becoming increasingly important for Russia, as Western economies scale back their investments in the country and Moscow continues to place inhibitive restrictions on EU imports.

Earlier this year, the company announced it would invest $2.7 billion in its entire operation in the Russian market.

TH Milk founder Thai Huong said: “TH produces agricultural products of international quality standards. The cooperation of RDIF and TH Group will make a significant contribution to the restructuring of Russian Federation agriculture, giving Russian consumers the most benefit, which are good and healthy products purely from nature from their own land, and to give the Russians the right to be proud of their land.”