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Fortenova Group and Meggle reach agreement on the purchase of Osijek dairy’s property and production line

10/28/2020

Belje plus, part of the Fortenova Group, and MEGGLE Croatia reached and signed an agreement on the purchase of the assets of the MEGGLE dairy in Osijek. By purchasing MEGGLE’s property and production line – with the intention to commence own production as of 1st January 2021 -  Belje will preserve the long-standing tradition of milk production in that part of Slavonia.

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.

Fortenova Group already accounts for around 10 per cent of the total milk quantity produced in Croatia, which is around 5 per cent of the local needs. Most of the milk produced at Belje is used for the production of ABC cheese, with its annual production currently at the level of 3,700 tonnes, while plans have been developed for the significant 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. 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 31st December 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”, said Marjan Vučak, President of the Management Board of MEGGLE Croatia.

“The MEGGLE Group is aware of how important it is to preserve the milk production in Osijek, which is why we had delayed our decision for as long as this was possible and we are glad that with the new owner it will be continued after all. Over all these years Meggle has been a socially sensitive and responsible employer and a reliable business partner. Having reached this agreement with Fortenova Group confirms that we have continued to behave that way in this restructuring process, too, and we shall keep operating according to the same principles going forward”, said Matthias Oettel, CEO of the MEGGLE Group.

“Fortenova Group has continuously worked on further improving the value and strengthening the portfolio of its brands. 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. 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. 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” – said Fabris Peruško, Chief Executive Officer of Fortenova Group.

“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” – says Andrej Dean, President of the Management Board of Belje.

The transaction will be carried out once all the required regulatory approvals are in place.

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