Croatia's Belje agrees to acquire Meggle's local production capacities

By purchasing Meggle’s property and production line in the northеrn city of Osijek, Belje plans to commence own production there as January 1, 2021, Fortenova said in a statement on Wednesday.

The completion of the transaction is pending regulatory approvals, the statement read, without providing the value of the deal.

"With the start of the production in Osijek Belje will purchase a certain quantity of milk from MEGGLE’s present contractors, while the need for employees is still under review, with around 100 people expected to be employed," the statement added.

Fortenova Group also said it already accounts for some 10% of the total quantity of milk produced in Croatia. Most of the milk produced at Belje is used for making the ABC cheese, whose annual production is currently at 3,700 tonnes, while there are plans to significant expand Belje's portfolio.

"In order to utilise all potentials of ABC fresh cream cheese, which is one of the strongest regional brands and one of our strongest export products, Belje needs additional production capacities and MEGGLE’s withdrawal enabled us to secure them within short time," Fortenova's CEO, Fabris Perusko, said in the statement.

In July, local media reported that Meggle had decided to restructure its operations in Croatia and shut down its factory in Osijek by the end of 2020, as part of a streamlining process that aims to establish sustainable long-term business models in all of its markets.

Meggle has been present in Croatia since 1996, when it opened its first distribution centre in the country. Production was launched three years later.

According to official data for 2019, cited by local media earlier in October, the local unit of French multinational dairy products corporation Lactalis, Dukat, was the largest dairy company in Croatia last year, purchasing 42% of the country's total milk output of 435 million litres. Local dairy Vindija was second with a 29% share of purchased milk, followed by Belje with 11% and Meggle with 6%.