FrieslandCampina seizes Balkan takeover opportunity under route 2020 'spearhead'

By Ben Bouckley

- Last updated on GMT

The map shows FrieslandCampina's current presence in Southeast Europe (blue), and that of takeover targets Imlek and Mlekara Subotica
The map shows FrieslandCampina's current presence in Southeast Europe (blue), and that of takeover targets Imlek and Mlekara Subotica
Dutch dairy cooperative FrieslandCampina has signed a memorandum of understanding with a UK-based venture capital firm to acquire Serbian dairy producers Imlek and Mlekara Subotica, and sees great potential to grow sales in the region.

A deal with London and Belgrade-based firm Salford Capital Partners is expected in the next few months, and FrieslandCampina’s move, CEO Cees`t Hart said: “FrieslandCampina wants to grow in various markets and product categories. This is the first major acquisition since the merger between Freisland Foods and Campina.

“This acquisition strengthens our brand portfolio and our position in Southeastern Europe, one of the spearheads of our route 2020 strategy.”

Published in June 2010, this document reveals multinational FrieslandCampina's plans to expand globally and shift its focus to three specialised product categories where it sees real growth potential.

These are dairy-based beverages, branded cheeses and infant and toddler nutrition ingredients, and the firm said at the time that it planned to tap previously unexplored markets in the Middle East, North Africa and South East Europe.

Imlek owns Serbia, Montenegro, Bosnia and Hergezegovina and the Former Yugoslav Republic of Macedonia; Mlekara Subotica has activities in Serbia.

'Attractive entry point'

FrieslandCampina’s said that this broad branded presence in the region, together with its current activities in Hungary, Romania and Greece, would give it access to around 76m consumers and provide a strong basis for future growth.

Together, the two firms serve around 25m consumers and have a combined turnover of around €270m, and FrieslandCampina said that (with its strength in Serbian retail) Imlek provided an"attractive entry point"​ into the Western Balkans as it was also well-placed for neighbouring markets.

"It has an attractive portfolio of well-known ,established brands with strong positions in the markets for ready-to-drink milk, yogurt, cheese and cream products,"​ FrieslandCampina said.

Fermented and specialty products

Mlekara Subotica's portfolio mainly comprised added-value products, the Dutch firm added, that accounted for over half of its revenues and featured fermented and specialty products such as spreads and cheeses, while one third of revenues came from fresh and long-life ready-to-drink milk products

If the acquisition goes through, the number of FrieslandCampina employees in Southeastern Europe will grow to around 3,900 the company said, given that both target firms employed around 1,470 staff across six production sites and four head offices in Serbia, Bosnia and Herzegovina, and the Former Yugoslav Republic of Macedonia.

Imlek CEO, Slobodan Petrovic, said: “It’s a great opportunity for the region, Imlek, Mlekara Subotica and FrieslandCampina. Our product portfolio fits well with FrieslandCampina’s current brand portfolio. I am confident that both companies will flourish under the FrieslandCampina flag and to the benefit of our customers.”

Salford Capital Partners had not responded to a request for comment as went to press, while a spokesman for FrieslandCampina referred us to the route 2020 strategy document, and said that both parties had agreed not to comment further on the potential deal while negotiations continued.

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