Western groups seek eastern promise

Related tags European union

Two west European bakery groups are extending their presence in
eastern Europe in advance of the enlargement of the European Union
later this year. Sweden's Cerealia group is investing heavily in
its Polish business, while Luxembourg's Bakeries International
looks set to take over Czech group Delta Pekarny.

According to a report in news2biz Poland​, Cerealia is to invest some PZ25 million in expanding production at its Cerealia Unibake subsidiary near Warsaw over the next few months as Poland prepares to join the EU on 1 May.

The company​, which has been active in Poland for more than 10 years, is looking to double capacity at the plant, constructing two new production lines to increase production of baguettes, ciabatta and other bread products.

Among the most popular products produced by Cerealia Unibake are hollowed baguettes which are used to make so-called 'French hotdogs', a popular fast food treat in Poland, and until now the company has imported them from its facilities in Denmark. But the weakness of the zloty has meant that it is much more cost effective to produce them in Poland itself.

The division also makes garlic baguettes for the Pizza Hut fast food chain, according to the report.

Meanwhile, the bakery sector in another accession country, the Czech Republic, is consolidating ahead of EU expansion, with Luxembourg's Bakeries International in the final phase of acquiring the local Delta Pekarny bakery, according to the Lidove noviny​ newspaper.

The Czech Competition Authorities are currently examining the proposed takeover, which is likely to see Bakeries International take a controlling stake in what is the largest Czech bakery.

Delta​ posted sales of CK3.9 billion in 2003, excluding acquisitions in Hungary and Slovakia, with the majority (CK2.3 billion) coming from its fresh pastry business. Although this was a decline compared to the CK4.3 billion a year earlier, this was entirely due to the sale of its milling division, Delta Mlyny, to the Unimills group in 2003.

Delta is also a leading player in other central and eastern European markets, with operations in Slovakia and Poland and earlier this year acquiring a stake in a leading Hungarian bakery Józsefvárosi.

The Józsefvárosi plant produces mainly white bread, the most popular variety in Hungary according to the company, and is also the main supplier of buns for the Burger King chain of fast food restaurants.

Delta has also expanded its production capacity in its home market, with the installation of a new production line at its plant in Kladno at a cost of CK100 million.

The unit, run by Delta Frozen Products, a joint venture with Belgian group Vanelor and the biggest producer of frozen baguettes in central Europe, expects to produce more than half a million baguettes every day once the new line is up and running in April. The facility will also produce a range of pastry products under the Kaiser brand.

Delta Frozen Products posted of CK440 million last year, with a third of sales coming from export markets Germany, Austria, Belgium, Luxemburg, Poland, and Slovakia.

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