Greek yogurt manufacturer KRI-KRI does not expect to experience any supply issues in or outside Greece as a result of the fire that tore through its Serres yogurt production plant on Christmas Eve.
A fire spread through KRI-KRI’s yogurt manufacturing plant in Serres, northern Greece on 24 December 2013, causing “serious damage to the production lines and also to the warehouses of finished products and raw materials,” the company said in a statement.
Around two-thirds of the facility was destroyed before firefighters were able to bring it under control, according to reports from Greece. No injuries were reported.
The company’s ice cream production operations were left undamaged “with no effect on ice cream production activity."
Based on an initial assessment of the damage, KRI-KRI expects the cost of repairs to total €18.75m ($25.5m).
Outsourcing full production
The company, the third largest Greek yogurt manufacturer in Greece, claims to hold a double digit share of the country’s yogurt market.
Outside Greece, KRI-KRI supplies customers in 17 other countries across Europe, the Balkans and the Middle East. Most recently, it marked its arrival in the UK through a deal with Waitrose to supply the British retailer's 300 stores with private label Greek yogurt.
In a statement issued earlier today, KRI-KRI said that despite the “serious damage” it does not expect product shortages.
“For covering temporary production needs, the company has already entered into agreements for outsourcing its full production to other third party Greek production units,” the statement said.
“Hence, it is not expected to experience any significant stock-outs or unfulfilled orders of customers in Greece or abroad.”
Restoration of yogurt production
Meanwhile, plans have been set in motion to restore operations at KRI-KRI's Serres plant.
“To restore the operation of the yogurt factory, a business plan for the reconstruction of a new plant on the same site has already been prepared,” its statement added. “With the new plant, full restoration of yogurt production operations is expected within 2014.”
KRI-KRI is negotiating with banks to “secure new funding lines” and its insurance providers in the hope of receiving “part of the compensation in advance” but will use existing cash to initially finance the rebuild.
It does not expect to make any losses as a result of the fire as “all damaged premises and content were adequately insured.”