Polish confectionery manufacturer Jutrzenka has finalised financial arrangements for the acquisition of rights to Nestlé Polska's Goplana confectionery brand, giving it an instant growth platform in the steadily expanding sugar confectionery sector, Tom Armitage reports.
In the agreement, worth a reported PLZ66 million (€16.1 million), the company will also acquire Nestlé's Poznan production facility, which manufactures a number of confectionery products, including Goplana-brand confectionery, chocolate tablets, pralines, and sugar confectionery.
According to the Polish press, Jutrzenka has already paid Nestlé Polka a reported €8 million, while further payments of €4.8 million and €3.2 million will be made by December 2005 and 2006 respectively.
Unconfirmed press reports also suggest that the Polish manufacturer is ready to make another acquisition bid within the first quarter of 2005, as is Mieszko - which last year ranked just outside the top ten leading Polish confectionery manufacturers.
When the licensing agreement was initially proposed in October 2004, Jutrzenka's president and main shareholder Jan Kolañski commented:
"Once we have the Goplana brand in our portfolio, we will be able to start exploring market segments in which Jutrzenka has not previously operated in, i.e. chocolate (tablets), pralines and sugar confectionery."
"Building a position in these segments, which would be as strong as the Goplana brand, would take a lot of time if we were to do it in an organic way, and it would mean significant costs and risk. We are therefore very happy that we were able to come to an agreement with Nestlé Polska," he added.
Jutrzenka claims that Goplana is the second most recognisable confectionery brand in the Polish market, behind the leading Cadbury Schweppes-owned Wedel brand. Based in Bydgoszcz, the agreement will give the company control of approximately 5 per cent of the Polish confectionery market, making it one of the largest Poland-based manufacturers.
Nestlé Polska told ConfectioneryNews.com that "the sale of the Goplana brand is partly due to Nestlé Polska's decision to concentrate on the Nestlé brand, as well as other strategic international brands in the Nestlé portfolio, such as KitKat and Lion". The company also confirmed that the agreement with Jutrzenka will not affect Nestlé Polska's operations at its countlines factory in Kargowa.
According to industry analysts Euromonitor International , the Polish confectionery sector achieved constant value growth of 2 per cent in 2004, with a market value of PLZ4,639 million (€1,128 million). Nestlé Polska is the second biggest confectionery brand behind Cadbury Wedel, with 13 and 14 per cent of the Polish confectionery market respectively.
Nestlé entered the Polish market in 1993 - shortly after establishing operations across Slovakia and the Czech Republic. Since acquiring the Goplana confectionery brand in 1994, Nestlé has steadily invested an estimated €300 million in the country.