CSM sheds confectionery unit

- Last updated on GMT

Major Dutch bakery ingredients firm CSM confirms the sale of its
confectionery unit to focus on core business. The
Diemen/Breda-based company said it expects to complete the sale of
the unit to CVC Capital Partners in the first quarter of 2005.

Expected to sell for about €850 million, the divestment announced in August is part of the firm's strategy to shed non-core activities to focus on core bakery supplies and sugar operations.

The Diemen/Breda-based firm said it expects to complete the sale of the unit to CVC Capital Partners in the first quarter of 2005.

"The sugar confectionery division will benefit from being part of CVC Capital Partners, which offers greater opportunities for the growth of the confectionery activities than alongside the other divisions of CSM with their strong business-to-business orientation,"​ said the firm in a statement last week.

The move fits in with the €2.8 billion firm's strategy to focus on its core bakery supplies and sugar operations, shaving off any units that are in the way of this aim.

Carving a bigger slice of the European bakery ingredients market, CSM went on the acquisition trail last year buying in June the bakery operations of Coberco Dairy Foods, outside The Netherlands, that had an annual turnover of €11 million. And in May, 9500-strong CSM reached an agreement to acquire the bakery ingredients business of Unilever in Hungary. The transaction, valued at €5.1 million ($5.9 million), took effect from 31 May.

In March this year the firm officially sealed the merger of UK bakery ingredients and finished foods firms, Arkady Craigmillar, Readi-Bake and Caravan Brill. CSM bought Readi-bake, a subsidiary of Country Home Bakers with annual sales of €22 million, last year for €28 million, giving it a step up into American-style cookies and sweet treats in the British market.

Earlier this month CSM in a €24 million deal signed off its stake in non-core activity Koninklijke Nedalco, a natural alcohol supplier.

Jaap Vink, CSM chairman stressed recently that its biochemicals division in particular would benefit from the new focus.

This unit, which covers a wide range of products such as lactic acids and food preservatives sold mainly under the Purac brand, saw a slight drop in turnover for the first half of this year to €138.9 million.

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