Vivartia drops ice cream for restructuring aims
ice cream producer and retailer Dodoni to the National Bank of
Greece Group as it continues to restructure its operations.
A spokesperson for the company told DairyReporter.com that the agreement, thought to be worth about €5m, would allow it to concentrate on production of its core brands to improve the efficiency of its operations. Greece's dairy industry, particularly in terms of milk production, has undergone difficulties in recent years with companies diversifying into new market places and product lines to remain profitable. As part of this drive, Vivartia, which is one of Greece's leading producers of dairy goods, has twice sold stakes in its operations during the last month, totaling 65 per cent, to investment firm Marfin. The first phase of the acquisition gave Marfin a 30 per cent interest in the group in July. Vivartia's executive chairman Dimitris Daskalopoulos praised the sale for putting the company in a better position to compete globally with its rivals. The move will continue the group's recent attempts to expand its operations into new markets. In June, Vivartia announced a new joint venture designed to tap into Saudi Arabia's bakery market, as well as the €18.7m acquisition of UMC, Bulgaria's largest dairy company. Through the purchases, Vivartia will also have hoped to show its commitment to both food and dairy production, after some concerns recently over the possibility it might move to offload some segments. In January of this year, Vivartia denied speculation that it was considering a possible sell off of its milk production assets, suggesting it would continue looking for investment in expanding its operations instead. Though difficulties in milk production have been further compounded by a recent hike in the price for raw materials, the company said at the time that it would remain committed to all aspects of its dairy operations and continue to grow its brands both domestically and internationally. Dairy sales in the Greece will continue to grow over the coming years, albeit it at a nominal rate, according to consumer analyst Euromonitor. Between 2006 and 2011, combined sales within the sector will increase from €2.6bn to €2.7bn. This growth belies a 4 per cent decline over the same period in sales of drinking milk products like flavoured and powdered varieties, Euromonitor added. This variance will drive the market to fall to about €501m by 2011, from €518m in 2006. The decision to move way from ice cream production is not a new strategy for the group though. In 2005, Vivartia's parent company, Delta holdings, revealed it had sold its ice cream division Delta Ice Cream to rival Nestle for about €240m.