Having announced a healthy 5 per cent jump in quarterly net profits during difficult times, Sweden's Cloetta Fazer Group says it is about to invest in modernising its production facilities in Finland and Sweden.
The Group's first net quarter profit rose to SK 98 (€10.7m), while operating profit amounted to SK 92. The operating margin rose to 12.8 per cent, up from 12.3 per cent, while sales declined by 3 per cent to SK 719.
"The drop in sales during the first quarter is explained by the fact that our substantial Easter sales arrived later than in the preceding year", said Cloetta Fazer's CEO Karsten Slotte. "We mainly see increased sales in the pick-and-mix segment around the Easter holiday."
"It is highly satisfying that the operating margin has continued to rise and, after the first quarter, has reached a level on par with the full year 2002. The key brands are still performing well and this, in combination with effective product management, has contributed to ongoing improvement in the margin," added Slotte.
Encouraged by its financial performance, the company also said that this autumn it plans to start SK 150 investment programme to raise production efficiency and output.
The investment plans are in line with the company's new production strategy. The first step will involve construction of a new line for wafer products in Ljungsbro, Sweden, where the sugar coating capacity will also be extended. In Vantaa, Finland, the company will build a new line for filled chocolates which is scheduled for completion in autumn 2004.
"This will be our most ambitious investment programme for upgrading of production efficiency in many years. The programme is entirely consistent with our new strategy to increase specialisation of the production units and our established focus on the key brands. The investments will boost our production capacity and efficiency, since parts of our manufacturing operations are currently operating at the limit," according to Slotte.
The Cloetta Fazer Group is the Nordic region's largest confectionery company, with a market share of 22 per cent. The company has production facilities and sales companies in Sweden, Finland and Poland, a partly owned sales company in Norway, representation offices in the Baltic countries and sales agencies in the other markets. Cloetta Fazer's strength lies in its many popular brands, such as Fazer Bla, Kexchoklad, Dumle, Geisha, Polly and Center. The average number of employees is just over 2,000.