Marriott Corp. and the Utah-based Huntsman Chemical Corp. are comrades flying into a new venture to provide airline food services in the Soviet Union - which, they say, may lead to more and bigger business opportunities there in the future.
Marriott In-Flight Services - the world's largest airline catering company - and the Soviet airline Aeroflot - the world's largest airline - announced at a rare press conference inside the Soviet Embassy on Tuesday that they are forming a new company, Aeromar, to handle airline catering within the Soviet Union.In turn, Aeromar is contracting with Huntsman Chemical - headquartered in Salt Lake and America's largest privately held chemical company - to provide plastic food service products, such as trays and utensils, for the venture. And Huntsman will build a chemical plant in the Soviet Union to do it.
"This partnership is truly symbolic of the great strides our respective nations have taken toward world peace and cooperation," Jon Huntsman, chairman and chief executive officers of Huntsman Chemical Corp., said at the press conference.
"General Secretary Gorbachev and President Reagan have created a framework for mutual trust and cooperation. We applaud these statesmanlike moves toward bilateral relations between our two countries. This alliance provides a basis for the Bill Marriotts and Jon Huntsmans of America to expand our businesses and share our dreams with the Soviet people," he said.
Yuri Dubinin, Soviet ambassador to the United States, added that he expects to see more such joint ventures and joint press conferences in the future.
A sign of the changing times came when Huntsman and J.W. Marriott Jr. (chairman and president of Marriott Corp.) posed in front of a portrait of Lenin for pictures with Aeroflot Director General Vleladimir A. Nacharov. Of note in Utah, Huntsman and Marriott are both LDS Church stake presidents.
Under the new joint venture, Aeroflot will own 51 percent of the new Aeromar Ltd. and Marriott will own 49 percent. Aeromar will modernize and refurbish a 110,000-square-foot kitchen at Moscow's Sheremetjevo Airport to handle food for domestic flights in the Soviet Union.> That will allow the first contract food service operation in the Soviet Unioninvolving a Western company, Marriott said. It will mean an additional $15 million to $20 million in sales a year for Marriott initially, with growth expected.
The Moscow kitchen will also be one of the largest operated by Marriott. Huntsman plans to build a manufacturing and packing operation at the airport, and will supply polystyrene for it from its Carrington, England plant.
Nacharov joked that Aeroflot only managed to feed its passengers "sometimes," and has such a large volume that "only the world's largest caterer" could handle its business. Marriott will provide technical expertise in design and layout of airline food facilities, staffing, quality assurance, loss prevention, menu and food preparation, marketing and accounting.
Marriott will also conduct a feasibility study on the design, construction and operation of a new flight kitchen that would serve the international terminal at Moscow's Sheremetjevo Airport.
Marriott said, "We feel that recent economic changes within the Soviet Union will launch vigorous expansion within the country, and we look forward to being a part of that growth."
Huntsman, whose firm has manufacturing operations throughout the world and plans to expand in Thailand, India, China, Singapore and Iraq, also views its involvement in the joint venture as an inroad for future projects in the Soviet Union.
"During our talks with officials from the Ministry of Economic Affairs and the Ministry of Chemicals, other business opportunities and joint ventures were discussed," he said. "We have already been asked to evaluate the possibility of participating in a major petrochemical project in western Siberia that will include the manufacture of styrene monomer, polystyrene and polypropylene.
"The Soviets seem most interested in having companies from the West participate in their country's increased privatization of selected businesses."
Nacharov added hope for more businesses with Marriott and Huntsman by adding, "We have established with them good human relations, which according to our opinion is the most important technical investment" possible for future ventures.