Puratos doubles production in China and announces two new sites

By Oliver Nieburg

- Last updated on GMT

Related tags: Puratos, Investment

Photo credit: Puratos
Photo credit: Puratos
Bakery ingredients firm Puratos has announced plans to build a €22m site in China and production facilities in Spain and Mexico as it looks to seize upon strong growth in emerging markets.

The announcement came as Puratos issued its estimated financial results for 2011.

Sunrise project

Puratos’ Sunrise Project is a €22m investment in China that includes an innovation centre and a production site producing fruit fillings, icing, glazes and creams.

In an interview with BakeryAndSnacks.com​, Puratos CEO Daniel Malcorps said there were also plans to produce chocolate

“We have been in China for a very long time, but we have come to the limit of our premises,”​ he said.

Puratos has had a presence in China for around 20 years. The new site sees Puratos move further from Guangzhou City, where its old facility was located.

Asked how Puratos planned to appeal to consumers in China, Malcorps said: “Bakery and patisserie are not global products. Bread is part of the culture of all countries, but we need to adapt to meet local needs.”

He gave the example of green breads in China that appeal to domestic consumers, but may be seen simply as mould in Europe.

Malcorps added that there was space for further expansion at the site.

The first phase of the Sunrise project is expected to completed by April 2012 .

New sites in Spain and Mexico

Puratos also announced that it would build its first sourdough factory in Spain for around €2m. On the same site, it said it would also build an R&D centre, due for completion in June 2012.

This move marks Puratos’ second significant investment in Spain this year, after it had previously invested €2m on a chocolate factory that had boosted its production capacity by 6,000 tonnes.

The company also announced plans to build a €3m UHT production site in Mexico that will produce toppings and local products.

Puratos has invested heavily in Mexico in the past few years with renewals of all lines and expansion of its fillings line.

Other investments Puratos announced in its release included an innovation centre in Japan and a new production line in Russia.

2011 results

Puratos oversaw organic sales growth of around 11% in its estimated results for 2011.

Malcorps said this was due to investment in R&D in all markets and strong growth in emerging markets, including Asia, Latin America and Eastern Europe.

He said the company was unable to give a precise figure for net profit in 2011, but he expected it to be around 9% EBITA on sales.

As a private entity, Puratos is not obliged to publish its financial results in full.

Malcorps was asked which continent stood out, but said growth was around the same in all these regions. He gave France, Holland and Russia as examples of nations where Puratos had performed well.

Puratos said it was able to cut operating costs by 2% on net sales from last year.

According to Malcorps, this was down to investment in production sites that have brought Puratos closer to its customers.

“That gives proximity linked to a lower cost,”​ he said.

He said that price fluctuations for raw materials had been “the huge challenge of the year”.

Puratos had introduced price increases as a result of rising commodity costs, but would lower its prices in line with any reduction in raw material costs for the new year, said Malcorps.

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