CEE dairies consolidate ahead of accession
eastern Europe is clear, especially when faced with the increased
competition likely to be brought by accession to the European Union
in May. But companies looking to increase their presence in the
dairy sector are not restricting themselves to accession countries,
it appears.
Slovenian dairy Ljubljanske Mlekarne has recently acquired two compatriot producers, Kranjske Mlekarne and Mariborske Mlekarne, but it has now turned its intentions to two other former Yugoslavian nations.
The company has just acquired a majority stake in a dairy based in Tuzla, north eastern Bosnia, one of its most important export markets. No details have as yet been released concerning the price paid, or the size of the stake, but the company did confirm that the move was part of its bid to strengthen its position in the enlarged EU.
But this is not its only acquisition. Press reports suggest that the company is also considering taking a stake in a dairy in Kikinda, northern Serbia, currently owned by the Serbian food group Topola.
The company has neither confirmed nor denied the reports that it was interested in buying the dairy, which has a daily capacity of 30,000 tonnes and is estimated to be worth around €870,000.
In any case, the dairy is also thought to interest rival Serbian processor Somboled, as well as a UK investment group called Salford, which already owns a large part of the Serbian dairy market, and France's Burie dairy.
Ljubljanske Mlekarne is already the majority owner of another Bosnian dairy, Prerada & Promet Mljeka Tuzla.
Net profits at Ljubljanske Mlekarne were ST806.6 million in 2002.
Slovenia is not the only accession country where dairy market consolidation is expected. In Poland, for example, the TSM dairy in Torun has this week said it was in talks with three other Polish dairies with a view to forming a major PZ200 million group.
The merger would allow TSM to cut costs and make it easier to raise financing for future projects, according to president Tadeusz Walczak, who stressed that the aim was to complete the merger before the 1 May accession deadline, as it was necessary for the company to better compete with western European dairy producers.
