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European frozen food giant Nomad Foods to shut down manufacturing plant in Bosnia and Herzegovina

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Nomad Foods, the European provider of frozen food products, intends to shut down a manufacturing facility located in Bosnia and Herzegovina.

According to a statement from the owner of the Iglo and Aunt Bessie’s frozen food brands, the facility in Čitluk is scheduled to cease operations starting on December 1st. The closure of the plant will unfortunately lead to the termination of 52 jobs.

UK-based Nomad Foods acquired the plant in 2021 as it ventured into the ice-cream category for the first time through the purchase of frozen-food assets from Croatia’s Fortenova Group, encompassing the Ledo, Ledo Čitluk, and Frikom product lines.

The spokesperson also verified that the facility manufactures frozen fish, fruit, and vegetable products under the Ledo brand. Additionally, they mentioned that all other product variations for the Bosnia and Herzegovina market are sourced from Ledo in Croatia and Frikom in Serbia.

In 2019, Fortenova emerged as the successor to Agrokor, which had previously held the title of the largest consumer-goods company in the Balkans until it was placed under state administration in 2017.

The spokesperson for Nomad Foods emphasized that the company’s top priority is to provide support to all colleagues directly affected by this decision. This decision was reached after thorough and deliberate consideration regarding the future of the Čitluk factory.

The New York-listed business added in the statement, “Products for the Bosnia and Herzegovina market will continue to be produced at our other manufacturing sites in Croatia and Serbia.

“We employ approximately 3,500 people across the Adriatic markets, including several hundred employees working in areas including logistics, sales, marketing and support functions who will continue to be based at Ledo offices in Bosnia and Herzegovina.”

The spokesperson confirmed that Nomad Foods operates four additional regional plants in Croatia and Serbia. However, they declined to specify the exact reason for the closure of the Čitluk site.

Upon acquiring frozen-food assets from Fortenova in 2021 for £615 million (equivalent to $749.5 million today), Nomad Foods announced that the transaction would enable the company to expand into new markets, including Croatia, Serbia, Bosnia and Herzegovina, Hungary, Slovenia, Kosovo, North Macedonia, and Montenegro.

Last year, discussions began between Noam Gottesman, the co-chair and co-founder of Nomad Foods, and his counterpart Martin Franklin regarding strategic options for the business.

During that period, Gottesman mentioned that potential options could encompass “a merger or a comparable transaction,” adjustments to the company’s “current capitalization or dividend policy,” the adoption of a new “corporate structure” for Nomad Foods, and the possibility of delisting from the New York Stock Exchange.

In 2014, Gottesman and Franklin established what was initially known as Nomad Holdings as a platform for making acquisitions. Within a year, it transformed into Nomad Foods after acquiring the European frozen-food company Iglo Group, which was followed by the incorporation of several assets from the Findus Group.

Additional deals in Nomad Foods’ portfolio include the acquisition of the Goodfella’s brand from Boparan Holdings and the purchase of Aunt Bessie’s, a UK-based frozen Yorkshire Pudding and roast potatoes manufacturer, from William Jackson Food Group.

In August, Nomad Foods released its second-quarter and first-half financial results for the period ending on June 30th. Despite a rise in revenue, the company experienced a decline in net profit.

The revenue disclosed for the quarter exhibited a 6.9% increase (8.6% organic growth) to reach €745 million ($785.5 million). Additionally, for the first half, the revenue showed a 6.3% and 8.3% rise, respectively, totaling €1.5 billion.

Adjusted EBITDA climbed 4.5% and 7.9% over the two periods to €132m and €279m.

Net profit, however, dropped 34.3% for the quarter to €49m, and was down 30.7% in the first six months of the fiscal year at €90.4m.

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