Baby Care business area
Thanks to the acquisition of Bimbosan AG, the HOCHDORF Group now has a tradition-rich, successful Swiss brand in the Baby Care Division. Cooperation has got off to a good start and initial discussions have been held on the further internationalisation of the brand.
In the first six months of 2018, the Baby Care Division grew 4.1% and generated net revenue of CHF 77.1 million (PY: CHF 74.1 million). We are pleased that despite the delayed brand registration in China, we were able to increase the turnover. This was mainly due to the higher turnover with existing customers in the Middle East and in South and Central America. However, customers in Asian countries also recorded attractive growth.
The production and filling systems for infant formula of HOCHDORF Swiss Nutrition Ltd were well filled in the first half of the year. Some of our customers recorded substantial growth. This enabled us to compensate for the loss of our profitable business in China, at least in terms of sales. Nevertheless, the speedy registration of our China brands remains a key goal which we continue to pursue with great effort.
We are also focused on acquiring new customers to utilise the capacity of the new production and filling line in the Sulgen plant. For example, towards the end of the first half of the year, we were able to perform some test production runs for potential customers on the new spray tower line. However, we do not expect regular production runs for new customers until 2019.
In the first half of the year, the net revenue generated by Pharmalys Laboratories SA remained below targets. The lack of business in China put enormous pressure on turnover and earnings; high market entry costs also weighed on the result. We expect a very strong second half of the year but will end the year below the previous year in terms of turnover and earnings.
As of the beginning of May 2018, the HOCHDORF Group acquired the traditional Swiss company Bimbosan AG. With this successful Swiss brand for infant formula and food for small children, we plan to enter the international market as well. Initial talks were held in Asian and African countries. However, due to the cumbersome product registration, the international expansion will not take place before the second half of 2019, at the earliest. In Switzerland, Bimbosan successfully launched various new products and stepped up its online presence (website and social media) in the first half of the year.
As in the previous year, the order books for the second half of the year are well filled. Without the additional capacities of the new production and filling line, it would not be possible to deliver the goods ordered by our customers and promised. In the event of registration of our brands for China, our new plants would provide us with sufficient capacity to supply our customers as quickly as possible.
On the production side, in August we launched the first commercial production runs on the new production and filling line in Sulgen. We will continue to focus on the acquisition of new customers. On the market side, all companies are looking forward to various market and product launches.
In April, we announced a turnover forecast for the Baby Care Division of CHF 220 – 230 million. For these reasons, we now expect lower net sales of CHF 200 – 215 million for the 2018 business year.