Rimi Baltic AB, the joint venture owned 50/50 by Kesko Food Ltd, a company belonging to the Finnish Kesko Group, and ICA Baltic AB, a company belonging to the Swedish ICA Group, starts operating in the Baltic countries today. The parties have today signed the final agreements concerning the arrangement and their food and distribution operations in Estonia, Latvia and Lithuania have been combined in a joint venture.
The result of this arrangement is a strong operator in the Baltic food market. In 2004, the combined net sales of Kesko Foods and ICAs Baltic operations were approximately 690 million euros. The joint ventures total number of personnel in Estonia, Latvia and Lithuania is approximately 8,300 and its main office is located in Riga, Latvia.
“We aim for market leadership. Our objective is to expand the store network in all Baltic countries. We will offer customers a wide selection of products, food as well as non-food, to affordable prices in the most moderns stores in Estonia, Latvia and Lithuania”, says Antonio Soares, CEO of Rimi Baltic.
Rimi Baltic operates hypermarket, supermarket and discounter concepts. At the initial stage the company has approximately 160 stores, but the plan is to develop and expand the store network in all countries of operations. The objective is to reach market leadership in the area and a 25% market share in three years. The company aims to report a positive operating profit in 2007.
The company s hypermarkets are based on ICAs Rimi store type, on which Kesko Food s existing Citymarkets in Estonia and Latvia will be remodelled during the spring. The chain s name will be Rimi Hypermarket. The supermarkets will be modelled on ICAs Rimi Supermarket concept and the chain s stores will operate under the name Rimi. The discount stores are based on Kesko Food s Säästumarket and SuperNetto concepts and will continue as Säästumarkets in Estonia and as SuperNettos in Latvia. Plans have been made to expand the SuperNetto chain into Lithuania where the parties have not operated discounters earlier. The chains also offer own-brand products, which are providing the best value for money.
A centralized logistics and distribution organization will be established for the company to manage and maintain the network of distribution centers in all of the Baltic countries. A major logistics unit is located in Riga and local units near Tallinn and Vilnius.
Antonio Soares, ICA Baltic ABs current CEO, has been appointed as the CEO of Rimi Baltic AB and Seppo Hämäläinen, Vice President of Kesko Food s Baltic Operations, has been appointed as the Deputy CEO. Ton Nolet, ICA Baltic ABs CFO, has been appointed as the CFO of the joint venture.
Kesko Food s President Kalervo Haapaniemi is the Chairman of the joint venture s Board of Directors and ICAs President Kenneth Bengtsson is its Deputy Chairman. The Board will be chaired alternately, for periods of one year, by Kesko Food and ICA representatives.