Russia and Ukraine choc sales fuelling Theegarten growth

By Jane Byrne

- Last updated on GMT

Related tags: Eastern europe, Global chocolate market, Europe, Ukraine

Confectionery wrapping machine supplier Theegarten Pactec claims Russia and the Ukraine have been the fundamental growth drivers for the firm over the past three years, citing greater affluence and increasing demand for Western style products in the region.

Steffen Hamelmann, communications spokesperson for the German equipment supplier, told this publication that demand in those countries for its chocolate packaging machinery, in particular, has been significant.

In fact, Theegarten maintains that the chocolate segment now represents between 70 to 75 per cent of its turnover.

Hamelmann also noted a hike in sales in recent years in Poland and the Czech Republic and a stepping up of the company’s activity in Asia, securing new contracts in China and India as well as developments underway in Malaysia, Thailand and Indonesia.

And the company states that sales outside of Germany are its continued focus with exports accounting for 93 per cent of its sales.

Central and Eastern Europe

Although Western Europe still commands a 37 per cent share of the global chocolate market, it is gradually losing ground to North America and fast growing regions led by Central and Eastern Europe, claimed a recent Leatherhead report on the sector.

Many of the biggest chocolate suppliers in the world have moved to Central and Eastern Europe in recent years to take advantage of lower labour costs. And the supplier migration has given international brands a stronger presence in the region, according to the analysts.

Combined with the help of economic growth, which has fuelled consumer demand, this supply side trend has helped Central and Eastern European increase its dollar share of the global confectionery market from 9.10 per cent in 2004 to 10.87 per cent in 2008.

Recession proof business

Theegarten Pactec said Hamelmann, remained relatively unaffected by the economic crisis, having bucked the market trend with a 10 per cent increase in sales for 2009 and a hike in new orders for the first quarter of its current fiscal year.

He said that this was due in part to the fact that it focuses primarily on the confectionery sector and within this niche it “has a diversified range of clients, has established relationships with all the big players in the sector.

According to Hamelmann, the supplier also benefited from the fact that its order sheet was full for 2009 from bookings confirmed back in 2008.

Developments underway

R&D focus over the next 12 months, added Hamelmann, is aimed at enhancing the flexibility and speed offerings of its continuous motion high speed wrapping machine for deposited or enrobed chocolate products with or without center-filling, jellies and other products.

He said the firm was hoping to launch a wrapper at Interpack in May 20111 that could provide top twist, side twist and bunch wrap functionality for products at high speeds up between 800 to 900 products per minute, while greater flexibility in its flow wrap equipment is also on the supplier’s radar.

Related topics: Processing & Packaging, Emerging Markets

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