"Further investments will target diversification of the range of our product and services, as well as penetration into other surrounding markets," Mindaugas Gedvilas, Malsena CEO, told the Baltic News Service.
The company said that the investment in the pasta manufacturing venture at its existing Panevezys plant would reach litas 6 million (€1.7m), with which would be partially funded by a bank loan.
Leading equipment supplier Buhler has been commissioned to fit the line, which will have a planned annual production capacity of 15,000 tons when it is opened up in July of this year.
Currently pasta production in the Baltic States amounts to 25,000 tons per year, the majority of which is produced by leading manufacturer Gintarinis Amzius.
Malsena says that the addition of the pasta production in the second half of the financial year should help to push 2004 revenues up by betweem 10 and 15 per cent.
The move follows another Baltic food manufacturer's recent decision to turn its hand at multifunctional manufacturing. Latvian dairy producer Rigas Piensaimnieks made an interesting side-step into the manufacturing of sauces and condiments last year.
The success of this move has encouraged Rigas Piensaimnieks to move farther a field in an attempt to try and carve out greater market opportunities. The company also says that this move has helped to counteract the effect of falling demand for dairy products in the Baltic region.
In 2003 milk production was down by 3.4 per cent on the previous year on account, due largely to the saturated state of the domestic market. This has meant that increasingly Latvian diary producers have had to look to export markets to maintain or increase their market share. However, Rigas Piensaimnieks, has chosen to buck this trend by pursuing other market segments.