Melitta to invest US$ 36.3 million in 2011
Valor Econômico
The German Melitta projects investments of R$ 58 million (US$ 36.3 million) throughout 2011 to increase the presence of its coffee brands in Brazil. The investment will be 5.5% greater than that achieved in 2010, when the sales of the company in the domestic market totaled R$ 740 million (US$ 420.5 million). The earnings last year were 11% higher than in 2009. Now, the estimate of Melitta is of growth of at least 5% in 2011, which would increase the earnings to R$ 775 million (US$ 484.4 million) in its three product lines - coffees, papers and accessories for the preparation of coffee.
The investments planned for 2011 will follow two main lines. The first, with a forecast of lesser investment (R$ 7 million/US$ 4.4 million), will be the increase of the productive capacity of the three manufacturing units the group has in Brazil. With the investments in assets, Melitta intends to increase in 30% the processing capacity of coffee in Avaré (SP) and in nearly 10% the production of the unit of papers of the company, in Guaíba (RS). "Brazil is currently the second largest market of the company with a share of 22% of the global earnings of the group. This year we want to strengthen our brands in Brazil, especially in the regions considered new to us", said Bernard Wolfson, President of Melitta in Brazil.
According to him, the greater productive capacity will support the expected increase in the sales the investments in communication should generate. The second line of investments will consume R$ 51 million (US$ 31.9 million) in resources in 2011 and it foresees new communication campaigns on the TV, radio and directly in the points of sale, both for the Melitta brand and for the Bom Jesus brand, acquired in 2006. Despite not ruling out new acquisitions, Melitta tends to follow its strategy to grow organically. With its two brands, the company closed last year with a participation of 9.3% of the coffee market, nearly one point percent above the 8.6% registered in 2009.
The plan for 2011 is to develop the markets of Rio de Janeiro, Federal District, Minas Gerais and the entire Northeast. For the company, the entire block is called "regions in development" and it currently represents only 10% of the earnings of the Melitta in Brazil. The investment in communication is not made by chance. One of the greatest barriers for Melitta is to be recognized by the consumer as a brand of coffee instead of just paper filters, as it has traditionally become known. According to Wolfson, in the new regions Melitta is still unknown to the consumer, but there is room to grow.
If the forecast is confirmed, the new block will have an important share of the estimated earnings of R$ 1 billion (US$ 625 million) of the company in 2017. Wolfson says the current installed capacity of the plants is enough to meet the demand at the moment, so a new plant is not in the plans of the company. The German group has got to the new regions of the country with the brands and plants it already has, unlike its main rivals. Leader Sara Lee, for instance, began the production in the Northeast after acquiring Café Damasco and take over a unit in Bahia. As regards 3Corações - joint venture between Santa Clara and Strauss-Elite - strengthened the presence in the Southeast after acquiring the Minas Gerais Fino Grão.