Russian investment fund UFG Private Equity Fund is acquiring a 40 per sent stake in Nevo Tabak, a cigarette making plant located in St Petersburg and currently owned by Intex, a company associated with the tobacco stem processor Grosstems.

 According to Nevo Tabak and Grosstems’ director Oleg Amiranov, the deal has been negotiated with the investment fund headed by the former Russian finance minister Boris Fyodorov since last year and is now to be completed within a month’s time. During the talks, the parties have agreed upon a US$ 100 million mutual investment plan for the plant’s development including the facility’s withdrawal from the downtown premises and its technical re-equipment, as well as upgrading of distribution and marketing branches, Amiranov elaborated. Nevo Tabak is one of the largest Russian tobacco facilities that have escaped multinational acquisition in the 1990s. It was established as far back as 1873 and focuses on economy-price cigarettes mainly. The plant has a production capacity of 15 billion sticks per year, but produced just 9 billion pieces in 2004, putting emphasis on distribution in the Russian north-west above all. Last year, the company registered a turnover of US$ 64 million which is expected to increase to US$ 81 million in 2006. (vt)