With Cadbury, Kraft completes its portfolio and earns another US$ 546.4 million in Brazil
Valor Econômico
In Brazil, the purchase of British Cadbury by American Kraft will increase the earnings of the latter by R$ 1 billion (US$ 546.4 million), getting to R$ 5 billion (US$ 2.73 billion). The figures correspond to Cadbury's sales in 2008, leader in the segment of candy, sweets and chewing gum, which last year had 25% of the sales in volume, according to Nielsen.
Even being promising, the deal with Kraft forced Cadbury to suspend an operation in Brazil. The company, according to sources connected to the project, planned to debut in the chocolate market at the end of last year, with a line that would take the name of the company. With the purchase offer made by Kraft in September, the plans were suspended.
In the initial project, Cadbury would outsource the production of chocolate. The company has a plant in the country, in Bauru, in the interior of São Paulo, that is exclusively dedicated to the production of hard candy, chewing gum and mints. With Kraft ahead, the line might be resumed and made possible in one of the plants of the company. But the project's future is uncertain. Neither Kraft Foods do Brazil, nor Cadbury do Brazil have commented on the matter.
Should it be closed the deal between the two companies should not undergo sanctions on the part of the Brazilian antitrust authorities since they do not compete with each other. Kraft Foods is the second largest manufacturer of chocolates of Brazil, with 35.8% of the sales in 2009, according to Nielsen, only behind Nestlé and its subsidiary company, Garoto, which 22.5% and 22% of the market, respectively.
Kraft Foods had net earnings of R$ 2.21 billion (US$ 1.2 billion) in 2008 (the 2009 results have not been disclosed yet), with growth of 10% on the performance of 2007. The company has had good results in emerging markets and Brazil is seen as one of the priorities by the international headquarters. In 2008, the net profit in the country amounted to R$ 273 million (US$ 149.2 million), with an increase of 116%.