It will be a crucial step in the Italian manufacturer’s plan to set up large hazelnut tree plantation in Serbia and reduce dependence on third-party hazelnut suppliers. Hazelnut prices skyrocketed last year on concerns of frost in Turkey, the world's leading producer of the commodity.
Ferrero Group’s Serbian subsidiary Agriser, the only company to register and take part in the April 20 auction organized by the Serbian Privatization Agency, successfully bid for 699.5 ha of arable land and accompanying objects in the municipality of Sombor in northern Serbia.
The auction was kicked off with an initial offering price of €7.94m ($8.63m), just a notch below the winning bid. Serbia’s privatization scheduled the holding of the auction on February 20, while the deadline for receiving applications from interested bidders expired on April 8.
The signing ceremony for the contract to privatize the 700 ha of agricultural land controlled by Aleksa Santic will be held in the coming weeks in the Serbian government headquarters.
Hazelnut nursery with 700,000 plantlets set up
Ferrero, the world’s foremost hazelnut buyer, plans to plant all 700 ha of the newly acquired land from Aleksa Santic with commercial hazelnut varieties. The Italian company uses the nut in its leading consumer brands such as Nutella, Kinder Bueno, Kinder Surprise, Rocher and Mon Cheri.
Even before the auction was announced, Ferrero confidently signed a business cooperation agreement with Aleksa Santic to set up a nursery with 700,000 plantlets of hazelnuts on 40 hectares of the Serbian company’s land back in December 2014.
Aleksa Santic is located in a small village of the same name, just 7km away from the Serbian-Hungarian border. The company’s arable land, situated on an altitude of around 124m, mostly consists of loess soil, a fertile soil that is conducive to intensive agriculture. There are no major water streams, or bodies of standing water in the immediate area.
The move to raise hazelnut orchards in Serbia was heralded in mid-2014 when Ferrero Group representatives met with Serbian government officials to announce their plans to install a centre for hazelnut production in Serbia. The proposed hazelnut center, according to a Serbian government communiqué, should have a total acreage of 1,000 hectares under hazelnut trees, with a further prospect of enlarging the area to more than 10,000 hectares by 2020.
Ferrero’s eastern approaches
Ferrero is clearly intensifying efforts to gain control over diverse sources of hazelnut supplies, thus reducing the risk of hazelnut shortages or sudden spikes in prices of the commodity. The European Commission recently cleared the takeover of Turkey-based hazelnuts trading and processing company Oltan from Trabzon by Ferrero International.
The operation created the world's largest hazelnuts supplier, with a significant market position for hazelnuts grown in Turkey, which accounts for around 70% of the worldwide production.
The Commission concluded that the transaction would not raise any competition concerns, in particular because the merged entity will continue to face sufficiently strong competition after the merger and customers will still have sufficient alternative suppliers in all markets concerned.
What shell we do with the waste?
With the ever-increasing volumes of hazelnut shells and cocoa bean skins left behind in confectionery plants, Ferrero recently teamed up with members of the paperboard and packaging industry to find a productive use for the waste.
The cooperation project named ECO°PAPER is team effort involving Ferrero, Stora Enso Barcelona (Spain) and Papiertechnische Stiftung (Germany) that started in July 2012. ECO°PAPER has taken an innovative approach to using what has always been seen as waste, by treating the by-products and turning them into packaging.
“We have access to large amounts of residual by-products which we realized could be used constructively,” said the project coordinator at Ferrero.
Early studies have shown that confectionary waste is capable of substituting for virgin cellulose in the middle layer of triple-layer folding box board. The paper recipes developed in the laboratory were up-scaled to pilot plant scale. The project team successfully performed several industrial trials and produced some dozen tons of multiply board containing up to 13 % ground nut shells.