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CSM sells weak French division

By Catherine Boal , 25-Jan-2007

Ingredients firm CSM is to jettison part of its French subsidiary, Délices de la Tour, after a disappointing performance from the speciality bread maker.

Under plans announced yesterday, CSM will sell the production activities of Délices' Le Mans factory to French viennoiserie maker Panavi.

The deal will hand over production of gourmet bakery items such as beignets, croissants and pain au chocolat - sales of which total €25m - to Panavi who currently own 38 per cent of the French raw viennoiserie market.

CSM expect to complete the €15m sale in the first quarter and said it will retain the stone-oven bread activities of the French subsidiary in Mauberge.

Last year, CSM put into effect a number of measures designed to streamline its bakery portfolio and strengthen growth in pivotal areas. The group made a $70m (€53.8m) acquisition of CGI Desserts, a supplier of thaw and serve bakery products and, in May, divulged plans to spend €19m on expansion of its American-style bakery lines.

While focussing on bakery has strengthened the group's performance over the past year, Délices de la Tour underperformed with disappointing sales damaging the firm's portfolio.

CSM's main product groups include bakery ingredients and products, lactic acid and lactic acid derivatives, and sugar. With these activities CSM has an annual turnover of €2.6 billion and a workforce of approximately 8,500.

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