Tetra Pak banks on emerging markets for growth

By Rory Harrington

- Last updated on GMT

Related tags: Cent, Middle east

Tetra Pak said stronger sales in the final quarter of 2009 and emerging markets offset declining demand in Eastern Europe and Central Asia as it posted an increase in net sales of 1.2 per cent for the year to almost €9bn.

The company said that while packaging sales rose by 1.8 per cent to 8bn over the 12 month period, its year-on-year processing performance dipped by almost 4 per cent to €917m - as it posted overall sales of €8.95bn.

The overall results were boosted thanks to a “stronger than expected”​ fourth quarter jump in sales of 5.7 per cent compared to the same period in 2008.

The firm said it was expecting a tough 2010 amid continuing uncertainty over the strength of the economic recovery - but said it had performed well in 2009 given the severity of the global downturn.

Packaging and processing

Tetra Pak’s performance was one of contrast between geographical regions with buoyant growth in emerging markets, compared to stagnation or decline in other areas.

South and Southeast Asia, the Middle East and Sub-Saharan Africa recorded “double digit growth”​ in packaging sales, said the company. But the news was not as positive as East Europe and Central Asia – hardest hit by the economic downturn – saw net sales drop by 12.2 per cent.

The company said that the worldwide recession had hit sales of processing equipment as it posted a 3.8 per cent decline – even though it had been “buoyed by a strong order backlog”.

In December the company forecast that global liquid dairy growth would reach 2.2 per cent until 2012. A Tetra Pak spokeswoman told FoodProductionDaily.com that company growth was expected to mirror this.

“We expect to grow with the market and that some 95 per cent of this will come in emerging regions. China’s dairy market is growing and India is starting to convert from loose to packaged milk for both health and convenience reasons,”​ she said.

The spokeswoman added that markets such as those in western and northern Europe were “mature”.​ Little in the way of growth was predicted – although any rise in demand was currently being driven by ambient liquids.

Tetra Pak president and CEO Dennis Jönsson said: “While we are encouraged by strong growth in the last quarter, we expect 2010 to be another challenging year, with continued uncertainty about the speed of the economic recovery.”

Company priorities would include keeping costs down as well as driving quality and operational efficiencies, he added.

“We will continue to invest in innovative technologies and products as well as plant infrastructure to meet the changing needs of the market,” ​said Jönsson.

Related topics: Manufacturers, Emerging Markets

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