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Done deals

Kraft signs up with Australian cheese major for pan-Asia distribution

By RJ Whitehead , 25-Mar-2013

Warrnambool Cheese and Butter Factory (WCB) and Kraft Foods Australia have announced the start of a long-term partnership under which Kraft will produce specially formulated cream cheese under WCB's Sungold brand.  

The product will be exported to WCB customers across countries in the Far East, Southeast Asia and the Middle East.  

For WCB, this means a staged production increase of up to 5,000 tonnes of product per year once the partnership takes effect after June this year.

Second initiative

The cream cheese agreement follows the recent announcement of a further collaboration between the two companies, with WCB releasign a premium low-fat cheese for Kraft to be marketed under the Livefree brand. WCB claims the cheese contains 80% less fat and half the energy of regular cheese while maintaining its cheddar flavour.

Kraft executive Darren O'Brien said that the collaboration between the companies is working well. "Together, Kraft Foods and WCB have combined their expertise and resources to deliver two new exciting innovations.

"Australian food companies are strong in food innovation and our products are trusted
around the world, so it's great that we're making the most of our local manufacturing capabilities, supporting our farmers by sourcing locally and capitalising on this brilliant export opportunity."

WCB’s CEO, David Lord, said: “It has been an exciting time for WCB, with the
cream cheese and low-fat cheese agreements building on an already strong relationship with Kraft Foods.

Both agreements are consistent with WCB's strategy to build a portfolio of higher margin products and deliver more customer specific applications."

Slack results

In spite of WCB’s increasingly productive partnership with Kraft, the Australian company has been having a tough year, and has put on record it anticipates business will remain difficult.

Earlier this month, it announced that its profit for the first-half of the financial year had halved compared to the same period last year to A$15.3m. WCB put this down to more competition among processors pushing up the cost of raw materials in the local market.

Yet these sluggish results are at odds with those announced by Bega Cheese, its dashing competitor, which has now overtaken WCB with a reported half-yearly profit of A$15.9m in spite of the rising costs. Bega said the growth has come as a result of greater efficiency and proprietary cutting and packaging technology.

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