Chr Hansen taking control in Eastern cultures push

12-Nov-2008 - Last updated on 12-Nov-2008 at 12:45 GMT

Chr Hansen says that inauguration of a new legal entity within Romania is far from just a cosmetic change to their expansion plans and will offer greater control in the development and sale of its dairy cultures.

As of 1 November this year, the company says that the new entity has allowed the group to take full control of its operations in the high potential Romanian market for cultures in wine and dairy production.

The group said it expects to gradually step up operations through the entity to provide other products across its portfolio such as natural colours.

Jacob Vishof Paulsen, manager for Chr Hansen’s central and Eastern European operations, told DairyReporter.com that the move, which reflects significant investment in the country, is targeted at streamlining interaction with manufacturers.

Paulsen said that the company has recently acquired warehouse space in the country as well as securing other resources like finance

“We have added a lot of infrastructure in the country, where we had previously relied on agents and distributors,” he said.

Dairy demand

According to the company, Romanian dairy products are currently showing annual growth rates between 15 to 20 per cent on the back of investment from a growing number of multinational producers.

“Many foreign companies have invested in Romania and they have a significant impact, setting new standards for product quality, innovation and product development,” he stated. “We have interaction with most customers already, but I am happy that we are now taking full ownership of the [operations] to secure the best service possible.”

The company said that it had opted to follow its customers into the Romanian market to better meet their needs in targeting local consumers.

“Since Romania became an EU member last year we have seen a tremendous development of the food market,” stated Paulsen. “We see the Romanian market as a key market for growth.”

Global cultures push

Paulsen added that the recent completion of a €50m Danish cultures plant construction just outside of Copenhagen would ensure the company could meet an expected rise in demand for cultures, particularly in dairy production.

However, he claimed that the Romanian expansion reflected a long-standing plan for aggressive growth in the region. It has been five years since the company had entered the Ukrainian market and ten since its move into Russia, Paulsen said.

Culture construction

Speaking at the opening of its new cultures plant earlier this year, group chief executive Lars Frederiksen said that sales of the products had risen annually by between 15 and 20 per cent on the back of demand for more nutrition focused goods in both emerging and mature markets.

“Ten years ago, yoghurt were simply seen as yoghurts,” he stated back in September. “However, the cultures’ potential for providing immune stimulation benefits in these products, as well as infant nutrition, has become massive business.”