Lotus in €27m scale up of Belgian biscuit and cake plants

By Jane Byrne

- Last updated on GMT

Related tags Lotus bakeries Biscuits Belgium

Lotus Bakeries is boosting capacity and installing new lines in its biscuit and cake facilities in Belgium, a €27m scale up in production that it said is to meet the hike in demand for its caramelized biscuit brand following successful entry into Swedish market.

The bakery group, headquartered in Belgium, produces caramelized biscuits (speculoos), gingerbread, cake specialties, waffles and pepparkakor biscuits and consolidated turnover for the first half of 2010 was €127.2m, up almost 1 per cent on the first half of 2009.

The company said it aims to increase available production space at its cake production site at Oostakker by 50 per cent and concentrate all its Belgian cake manufacturing there.

In doing so, it will transfer frangipane production from its speculoos manufacturing base at Lembeke to ensure that the facility will focus only on production of speculoos.

Lotus maintains that this concentration of production of specific product categories per site will provide the high volumes needed to further increase each plant's profitability, and provide the basis for expanding production capacity.

The group, which also has factories the Netherlands, France, Sweden and Canada, said the planned investments in the two strategic projects in Belgium will be spread over three years, and will generate 20 jobs in the medium term.

Recent capital expenditure

In its half year yearly report, Lotus Bakeries revealed that the level of investment during the first half of 2010, towards the further automation of a number of packaging lines, was almost €5m, which was in line with its spend in the same period last year.

In July this year, the group acquired all of shares in the Margarinerie Hinnekens margarine factory adjacent to the Lembeke caramelized biscuit plant at a cost of €971,000.

The factory, which Lotus had established as a joint venture between it and the Hinnekens brothers in 1981, provides margarines for the various Lotus Bakeries Group production entities and the group said it will now be fully integrated into the cake and biscuit company.

Sales reflects biscuits performance

The group said in August that North-Eastern Europe saw slight sales growth during the first half of 2010 compared with 2009, with a significant increase in caramelized biscuit penetration, largely due to their introduction into Sweden in January 2010.

The UK and France also proved strong in terms of sales for this biscuit category in the period, and Lotus added that, in a slightly declining gingerbread market, in both value and volume terms, its brand, Koninklijke Peijnenburg, was able to maintain its market share and increase volume.

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