Kraft may expand factories in Russia to meet increasing demand

Kraft Foods Inc. may expand its factories in Russia, where sales have been climbing on higher demand for the world's second-largest foodmaker's products

"We have seen continuous double-digit growth a year," David Steer, Kraft's head of Russia, told reporters at the U.S. company's chocolate factory in the town of Pokrov in the Vladimir region east of Moscow.

Sales in Russia this year are "a little faster" than last year, when they reached more than 20 billion rubles ($642 million), Steer said today in an interview.

Kraft and larger competitor Nestle SA have been expanding in Russia to tap higher demand as 10 consecutive years of economic growth raise consumer spending. Kraft last year opened a $100 million instant-coffee plant near St. Petersburg. The Northfield-based company became Russia's largest biscuit maker in 2007 when it bought a Groupe Danone SA unit that owns the Bolshevik biscuit factory in Moscow.

Kraft said it is considering increasing the capacity of the Pokrov factory, which is the company's second-largest chocolate plant worldwide. The company said it is also weighing an expansion of the biscuit plant in Sobinka in Vladimir region that is slated to open in October.

"Russia is one of the top 10 markets for Kraft and it's close to top of the list of the priority markets along with Brazil and China," Steer said.

The company may also consider acquisitions in Russia, where Kraft always looks "at opportunities as they come up," Steer said.