CSM sells frozen bread operations for 7.7m
operations to Neuhauser for €7.7m, a move that follows heavy
restructuring to improve efficiency of its European bakery supply
unit.
The deal, which follows the sale of the viennoiserie operations earlier this year, is expected to close in the short term. Both the frozen bread and viennois operations fell under CSM's Delices de la Tour subsidiary. In financial year 2006 all the businesses at Bakery Supplies Europe took steps last year to improve organisational efficiency and effectiveness. For instance, the British and German organisations made what CEO Gerard Hoetmer called "substantial changes to their overheads structure", while the Spanish and Portuguese activities were merged. In addition, factories have been shut down in the UK and France, amongst other places. A spokesperson for CSM told FoodNavigator.com that the sale does not impact the company's bakery ingredients products, which also fall under Bakery Supplies Europe, but relates only to end products. "CSM will remain active in bakery supplies," he said, adding that the company felt it had "insufficient skill" to make the frozen bread part of the business profitable at the level it wanted. In full year 2006 the bakery giant, which also supplies ingredients though its Purac division, reported net sales from continuing operations of €2.4 bn, up 1.2 per cent on the previous year. The operating result from continuing operations before exceptional items amounted to €155.1 million, up 21 per cent. "2006 was a good year for CSM both financially and operationally," said Hoetmer. "Our sharpened strategy, developed with a view to turning CSM again into a cost-conscious, customer-oriented and innovative player, is up and running." CSM's so-called 3-S restructuring programme also led to cost savings amounting to €43 million in 2006, resulting in cumulative savings of €62 million. Restructuring costs totalled €24 million in 2006. Restructuring measures also affected the Purac division last year, including reduction of the workforce, optimization of factories, and purchase savings. A new lactic acid factory was also constructed in Thailand, which is expected to bring in economies of scale and production methods to boost efficiency. Purac is focused on single ingredients, and it supplies the pharmaceutical and chemical industries as well as food. Last month the company finally received the green light fro the sale of its sugar business, CSM Suiker, to Royal Cosun. CSM announced that it was planning to sell its sugar business in February 2006, as it was felt the division could not compete in the industry once EU sugar regulations came into force. The sale, said to be in the region of €202m, was expected to be completed in Q4.
