Wedel expects to exceed PLN 1 billion in revenue in 2023 for the first time, compared to about PLN 900 million a year earlier, managing director Maciej Herman said. The company wants to increase the share of exports in turnover, which will exceed 10% this year, while the target is to have about 20%.
“We are at the end of August, and everything points to the fact that this year we will exceed PLN 1 billion in turnover for the first time ever, which means there will be a double-digit percentage increase against PLN 900 million in 2022, while in terms of volume we are doing a little better than last year. […] In terms of our foreign expansion, we are present in 64 countries and exports account for about 10% of turnover, which we will exceed this year, while ultimately we want to reach about 20% of exports in turnover,” Herman said at a press conference.
He also stressed that Wedel is currently in the process of investing in the expansion and modernization of the factory in Warsaw’s Kamionek district. The value of the investment may reach a total of about PLN 300 million.
“Approximately PLN 200 million are spread over three years for investments in two buildings, where the production part will be, but also laboratories and the R&D department will be built, and which will be put into operation later this year, while next year we will take care of the interior fit-out. In addition, about PLN 100 million will be spent on everything else, i.e. new production lines, upgrades and renovations. We have an increase in costs because the prices of construction materials are rising, but we assumed a certain margin, and within that margin we’ve managed to fit in,” The director said.
Earlier, Wedel estimated that the expansion of the factory in Warsaw’s Praga district would be completed in Q3 2024.
The expansion of Wedel’s factory in Warsaw was announced as early as 2020, and at the time the company said it would cost around PLN 200 million. The factory building was to be expanded to include a production section, which would increase the capacity of the current factory, but last year. Wedel approved another investment in addition to the production part: the addition of a new building, which will house laboratories and an R&D department. As a result, the company increased its investment budget by a further PLN 20 million against the original PLN 200 million.
Poland’s chocolate market grew by 17.3% in value between July 2022 and June 2023 to PLN 10.32 billion, while volume growth reached 2.3%, Wedel Managing Director Maciej Herman said. Consumption in Poland will continue to grow over the next five years and could reach 6.4 kg/person in 2028, about 8.5% more than today.
“In 2022, the value of the global chocolate market was $113.6 billion, and the market is projected to grow by about 51% to $170.5 billion between 2022 and 2028, and to grow by about $10 billion in 2023. According to Nielsen, the value of the Polish chocolate market is PLN 10.315 billion at the end of June 2023 (July 2022 – June 2023), and this is a 17.3% year-on-year increase compared to PLN 8.794 billion (July 2021 – June 2022). In turn, in terms of volume, the market grew by 2.3% to 211.1 thousand tons from 206.35 thousand tons,” said Wedel Managing Director Maciej Herman and noted that the difference in value and volume dynamics is due to record inflation in Poland.
He added that in 2022, chocolate consumption in Poland was about 5.9 kg per person, and over the next five years consumption will grow and in 2028 it could reach 6.4 kg/person, about 8.5% more than today (in 2025 it could be 6.0 kg, in 2026 – 6.1 kg, and in 2027 – 6.2 kg). Germany currently consumes about 8.4 kg, Ireland 7.7 kg, Sweden 7.4 kg, the UK 7.2 kg, and Bulgaria 6.6 kg.
“Looking a few years ahead we are moderately optimistic about the market in terms of volume, but predicting in terms of value in the current situation and what will happen even three months from now is almost impossible, because just three months ago no one expected the price of cocoa to shoot up so much. There are so many variables in Poland that it is difficult to predict anything. There are all the time problems with production and raw material prices, problems with inflation, which affects consumer decisions. On the other hand, the issues of the impact of the pandemic are behind us.” – He added, when asked about the prospects for the Polish market.
He pointed out that cocoa prices on world markets are rising all the time and are now the highest in 46 years – at the end of August this year, the price of cocoa on the London Stock Exchange was £2,888 per ton, up 60% year-on-year.
Herman pointed out that Poland is the third largest exporter of chocolate in the European Union (by volume) – in 2022 we exported 295,000 tons of products, after Germany (680,000 tons) and the Netherlands (322,000 tons), while the EU as a whole exported 2.5 million tons.
Poland is also the fourth exporter in the world (after Germany, Belgium and Italy) in terms of the value of chocolate product exports, which amounted to $2.4 billion in 2022. This meant a 7.1% share of global exports.
Source: Wedel and ISBnews
