Cloetta Fazer to close subsidiary in Poland

Cloetta Fazer will close its subsidiary in Gdansk, Poland, during 2005. Consultations with the labour unions will commence immediately after Easter and are expected to close before the end of April 2005. Cloetta Fazer will continue to sell its brands on the Polish market through collaboration with a local distributor.

Cloetta Fazer’s Polish subsidiary has recorded losses for the past few years, mainly due to a weak market position and a tough price competition. Under these market conditions, it has not proven possible to operate a profitable production and sales company. “Cloetta Fazer’s strategy is to focus on the Group’s strongest brands. We will continue to market and sell our prioritised brands on the Polish market through a local distributor. In the future, the Polish market will be supplied by the Group’s units in Finland and Sweden. Together, these measures will provide a more cost-effective solution”, adds Karsten Slotte. The Polish subsidiary reported net sales of MSEK 169 and a profit after net financial items of MSEK –10 in 2004, and is expected to show a loss throughout the remainder of 2005. Added to costs arising from the wind-up of the subsidiary, this will have an estimated negative impact on the Group’s earnings of around MSEK –50, of which around MSEK 20 will not affect cash flow. The number of employees in Cloetta Fazer Polska is 320. Union consultations will be started immediately after Easter and are expected to be finalised before the end of April 2005. Cloetta Fazer has been active in the Polish market for several years. Until now, the Cloetta Fazer products sold in Poland have also been manufactured locally. The total production volume in 2004 was 5,500 tonnes, down by 20% from the preceding year. “The local management and employees in Poland have made an ambitious effort to reverse this negative trend, and it is deeply regretful that we now have to make this decision,” says Karsten Slotte, CEO of Cloetta Fazer and President of the Supervisory Board of Cloetta Fazer Polska.