The intention is that production will commence on January 1, 2021.
With the start of the production in Osijek, Belje will purchase milk from Meggle’s present contractors, while the need for employees is still under review, with around 100 people expected to be employed.
Fortenova Group already accounts for around 10% of the total milk quantity produced in Croatia, which is around 5% of the local needs. Most of the milk produced at Belje is used for the production of ABC cheese, with annual production currently of 3,700 tonnes, while plans have been developed for the expansion of its portfolio.
“We are happy with the agreement reached and with having closed the sale of Meggle’s assets in Osijek, as well as with Belje’s decision to produce on that location following our withdrawal,” said Marjan Vučak, president of the management board of Meggle Croatia.
“After having made the final decision on closing down our production in Croatia, the Meggle Group has exerted maximum efforts to find a buyer for the assets in order for as many of our employees as possible to have new employment after December 31 and for our contractors not to have any standstill in the purchase of milk. Until the end of the year Meggle shall continue to restructure its operations, in accordance with the agreement reached with the trade unions, while meeting all the assumed obligations in time and in full.”
Fabris Peruško, CEO of Fortenova Group said Belje needs additional production capacity for ABC cheese, and the acquisition will help in achieving this.
“With the Osijek plant we have secured the prerequisites for the development of new products, made of local raw material, of premium quality and higher added value. With this move we shall continue to work on the preservation and further growth of the local agricultural production, which along with saving existing and opening new jobs, is of great significance for Slavonia and the broader community,” Peruško said.
“Fortenova Group views its operations in the long term and we are currently preparing the company for operations in the period following the crisis in order to have as strong as possible a lever for growth once the recovery starts, with this transaction to be entirely financed from our operations.”
Andrej Dean, president of the management board of Belje, said the acquisition of Meggle’s assets and the development of new products can be an additional encouragement to increase the quantities of milk produced, and for small producers to invest in dairy cow farms in Croatia.
“This would certainly have a positive effect on the change of trends, after this year the long-lasting decline in milk quantities produced in Croatia has finally been stopped. The dairy industry is one of the major focus areas of the 2020-2025 strategy in Fortenova Group’s agriculture division, and the Belje food industry will be the platform on which the development in that segment will gain momentum.”
The transaction will be finalized after all required regulatory approvals are in place.
