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Callebaut stands by 4-year goals as choc market slowly recovers

By Jess Halliday , 12-Jan-2011

Gourmet and specialty chocolate, and emerging markets, drove sales volume growth for Barry Callebaut in Q1, but Western Europe and the US are still showing mixed results.

The cocoa specialist has posted a 5.6 per cent increase in cocoa volume sales in the quarter ended 30 November 2010, to 383,222 tonnes. However currency winds were not in its favour and while revenue in local currencies was up 14.2 per cent in its reporting currency the rise was just 4.9 per cent, to CHF 1521.8m.

Juergen Steinemann, CEO of Barry Callebaut, said: “As expected, the general economic

growth momentum continued to pick up, but with geographic variations: Whereas emerging markets again showed gratifying GDP growth rates, the economic environment in Western Europe and North America was mixed but still better overall…

He added: “We are particularly pleased with the growth of our Gourmet business, our performance in emerging markets such as Eastern Europe and Asia-Pacific as well as the positive momentum of our cocoa products sales to global customers.”

The company has four-year growth targets for 2009-10 to 2012-13 of 6-8 per cent in volume terms and EBIT growth in local currencies at least in line with this.

Steinemann said he is still confident that these targets will be achieved, and that the company will outperform the global chocolate market, largely as it has recently fine-tuned its strategy.

The strategy, published in the 2009-10 report in November 2009, sits across three pillars: Expansion, innovation and cost leadership.

It plans to accelerate the growth of its gourmet business and strengthen its position in mature markets of Western Europe and North America – while developing the emerging markets it recently entered like Russia, China, Japan, Mexico and Brazil.

It also plans to continue and increase its outsourcing deals with local and regional manufacturers.

Costs

Barry Callebaut aims at cost leadership, and in 2010 it managed to reduce its manufacturing costs per tonne reduced by an additional 5 per cent in local currencies.

Cocoa prices have remained on higher than average, despite dropping in the Q1 from sky-high levels in the prior three months. They remain very volatile on a daily basis, and sugar prices in Europe have also been elevated.

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