Numico completes European baby food restructuring

Related tags Baby food

Royal Numico said yesterday that it has now closed all of the eight
Europe-based baby food maufacturing plants that were targeted for

The Dutch firm has recently closed the Friedrichsdorf plant in Germany and last week closed a plant in Wells, UK.

The firm launched a restructuring plan in July 2003, which is aimed to generate annual cost savings of €35 million in 2006.

It is part of an overall strategy to increase margins through nutrition specialised for infants and hospitals.

Goldman Sachs has forecast strong returns for Numico's new strategy, which eliminates much of the pricing pressure from retailers.

"Given that the clinical nutrition business has no exposure to the mass market retailers and that retailer brand has less than a 5 per cent share in the western European baby food market, we believe Numico is better placed than its peers to deliver growth despite…industry pressures [such as static consumer markets and consumers trading down],"​ commented the analysts earlier this year.

Numico has also been buying up baby food business in Europe to increase its market share. Its first acquisition was Valio's baby food business in May 2004, followed by Italy's Mellin earlier this year.

In May the baby foods division reported its first quarter of double digit growth (11.9 per cent) while clinical nutrition experienced solid sales growth of 12.3 per cent.

Related topics Maternal & infant health

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