Cloetta Fazer completes gum acquisition

By Charlotte Eyre

- Last updated on GMT

Related tags Cloetta fazer Confectionery

The acquisition of Finnish gum manufacturer Fennobon Oy by Cloetta
Fazer today comes into force, as the Sweden-based confectionery
company moves to make its mark on the sugar-free and functional gum

Although Cloetta Fazer has until now not had any products of its own in this area, the company claims the acquisition will lend it expertise in what it claims to be the fastest growing product segment in the confectionery market.

Indeed, figures from market analyst Global Business Insights support the company's plans, as a recent report stated that the gum market in Europe will increase at an average 2.5 per cent in value each year until 2010, compared to 1.9 per cent for the sugar confectionery sector.

Fennobon is something of an expert in the gum market, being the only domestic manufacturer of gum in Finland, and the company produces a range of functional gum products, including Xylident - a gum marketed as reducing cholesterol.

"Nearly all chewing gum sales in Finland consist of products with a high xylitol content of the type Fennobon is specialised in," said Tom Lindblad, Managing Director of Cloetta Fazer's Finnish subsidiary.

"We strongly anticipate continued growth for the chewing gum segment and will invest ambitiously to develop and market these products," he added.

Established in Karkkila, Finland in 1990, Fennobon reported annual sales of approximately SEK 66 million (€6m) in 2006.

Each year, around 40 per cent of total sales are exported to countries like Japan, the US and Germany.

Cloetta Fazer plans to keep production at the Finnish site, and may in fact increase current production facilities, the company said.

Both companies declined to divulge the price of the purchase, which was first announced in November 2007.

Cloetta Fazer is currently one of the largest confectioners in the Nordic region, with a 22 per cent market share.

The company has 1,500 employees - 600 in Finland and 370 in Sweden - and produces throat lozenges, toffee and lollipops as well as chocolate products.

The company's overall strategy is to increase its presence in the Nordic region, and last month it acquired Swedish pastilles-maker Karamellpojkarna, the third biggest supplier of throat pastilles in the country.

Related topics Markets Gum

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