RUSSIA – German processed cheese manufacturer Hochland announced on Monday that it is to build a new plant near Moscow. The news came just days after a report urged increased production in the Russian dairy sector.

Hochland will invest 40 million euro in the new plant, which will make around 20,000 tonnes of cheese per year. Hochland’s factory will produce 25% more cheese than Russia’s current largest cheese factory.

Hochland was the first foreign company to begin making cheese in Russia. It currently processes around 6,000 tonnes of cheese per year at a site owned by Ehrmann in Moscow. Hochland controls around 4% of the domestic Russian cheese market, behind Finnish rival Valio, which controls 6%.

The new plant is due to be commissioned in summer 2004 and production at the Ehrmann plant will stop.

The news came after a report suggested that Russian dairy production must increase to avoid a flood of imported dairy products.

The report, from the Agarian Marketing Institute, said that in 2001 dairy consumption per capita in Russia increased by 4.7% to 220 kilograms. However, domestic dairy production increased by only 1.8% and imports increased by 13.2%.

The study also predicted that Russian dairy consumption would continue to rise by around 5% per year.