Prior to the merger, the water business was run as a separate entity with its own marketing and finance departments, distribution network and sales force. The merger, which comes into effect as of March 1, 2005, will allow the company to significantly reduce administrative, and selling and distribution expenses, as well as benefit from economies of scale in terms of transportation and negotiating power with distributors and supermarkets. The unified Juice and Water business segment will be headed up by Jay Yadegar, who currently heads up Wimm-Bill-Danns Water business. Prior to his appointment as head of Water, Mr Yadegar, who joined Wimm-Bill-Dann in 2002, served as the companys head of Investor Relations.
As of March 1, 2005 Alexander Malutin, current head of Juice, will head up Wimm-Bill-Danns Baby Food business segment. The Baby Food segment, which over the past 18 months has gained strategic significance for the company, currently makes up 13% of Wimm-Bill-Danns overall dairy sales. Mr Malutin will focus on its organic and non-organic growth as well as revenue growth and the expansion of the current product range.
In line with the same strategy of reducing overall costs, the Dairy business segment has also been restructured. Historically it has been comprised of seven regional divisions — the Centre, the North-West, the South, Ukraine, Siberia, the Urals and the Centarl Asia — each with its own management and marketing teams. All the divisions subordinate to the management team of the overall Dairy segment. In order to simplify the structure and reduce costs, the Centre division, which includes Moscow and Russias central regions, ceases to exist with immediate effect. All the production facilities, which fall under this division, will now subordinate directly to the management of the overall Dairy segment. Hence, the Dairy segment will now be comprised of six regional divisions.
Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Wimm-Bill-Dann, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements to conform them to actual results. We refer you to the documents Wimm-Bill-Dann files from time to time with the U.S. Securities and Exchange Commission, including our Form F-1. These documents contain and identify important factors, including those contained in the section captioned “Risk Factors” in our Form F-1, that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, potential fluctuations in quarterly results, our competitive environment, acquisition strategy, risks associated with operating in Russia, volatility of stock price, financial risk management, and future growth subject to risks.