Competition drives investment in Greek dairy industries

Intense competition and the need to provide new products of high added value spurred Greek dairy product companies to maintain a strong investment momentum in 2003, which reflected on their financial results, according to a study by Stat Bank. The total value of installed equipment rose by 15 percent to 566.8 million euros. Annual sales rose by 8.2 percent to 1.4 billion euros, with the average gross profit margin remaining stable at 28 percent. However, profits before tax declined 14 percent to 36.2 million euros, from 42.3 million in 2002, due to the presence of one-off revenue items included in the previous year’s financial results, and the large increase, by 13 percent, of management and distribution costs. Delta and FAGE remained the two largest companies of the dairy product sector in Greece. Delta Milk Industry’s turnover amounted to 304 million euros and profit before taxes at 18.5 million. Delta Ice Cream’s sales in Greece rose by 9.4 percent to 78.8 million euros, with profit before tax at 5.6 million euros. Yogurt remained FAGE’s main strength. In 2003 the company had sales of 335.8 million euros, with profits before tax amounting to 8.1 million euros. Mevgal, another strong player in the Greek market, placed emphasis on the promotion of new products and exports. The company achieved a 7 percent increase in sales to 164.2 million euros in comparison to 2002, with profit before taxes falling slightly to 6.27 million euros from 6.74 million. Among smaller operators, Olympos reported a surge in pretax profit to 403,000 euros from 117,800 euros in 2002 from a 38 percent rise in turnover to 34.9 million, and Kri-Kri 31 percent profit growth to 2.1 million, with sales rising 27 percent to 18.1 million euros. The recent entry of Dutch group Friesland’s in the Greek yogurt market, with a new plant in Achaia, is seen certain to further intensify competition. Yogurt holds a prominent place in the Greek dairy products industry, with a 97 percent share in the domestic market and a notable export performance. Greeks consume annually more than 80,000 tons of packaged, European-type yogurt as well as 18,000 tons of traditional Greek yogurt, with per capita consumption standing at 9 kilos. The annual per capita consumption of pasteurized milk is about 38 liters.

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