Campina exits from Polish dairy processing

Campina, which only recently announced a merger with Scandinavian dairy giant Arla Foods, is selling its Polish production and distribution businesses to its partner and Dutch business development company, Larive International. Larive will operate Campina's facilities under the name Bacha sp.

Ria Feldman, Campina spokesperson, said that "financial results of distribution and production facilities were not what we wanted them to be,"​ and the company is hoping to benefit from Larive's specialist knowledge of the Polish dairy sector.

Poland's 80 or so dairy producers have faced intense competition on the domestic market after Russia banned Polish dairy imports last September, cutting off a vital export channel for Polish producers. For example, one fifth of French dairy firm Danone's Polish production was previously exported to Russia.

Feldman said Campina now saw greater opportunities in "emerging"​ consumer markets for branded and added-value dairy products including desserts, drinks and yoghurts. She refused to give growth estimates, but market research group Datamonitor​ said the Polish dairy sector grew by an average 6.7 per cent every year between 1998 and 2003.

Campina will undoubtedly have to work hard to compete with strong domestic-foreign combination and 2003 market leader, Mlekovita, owned by Danone, and second-placed domestic firm Spoldzielcza.

But Campina plans to plough money into researching and developing new products, and the move also fits well with the Campina-Arla merger, which is set to produce the world's largest dairy co-operative and aims to rival the branded dairy business of world market leader Nestlé. Together, Campina and Arla will have vastly more to spend on marketing and development. They have annual sales of €10 billion, behind Nestlé's €15.3 billion, yet well ahead of the nearest rival pack, including Danone and the US firm Fonterra, which have around €6 billion each.