German flour mills begin to grind their way to the top

German milling companies are boosting their stakes in the zł.3 billion Polish flour market and if they do not slow down they will soon take over market leader Polskie Młyny. After having secured launching pads to the domestic market, VK Meuhlen and Hemelter-Muehle Dr. Cordesmeyer, are preparing for a large offensive.

"Within the next two years we plan to raise cereal processing to about 760,000 tones annually [currently 440,000 tones]. This is an element of the strategy to acquire control of a 25% stake of the national market," said Rafał Salomon of the management board of VK Muehlen Polska.

If the firm fulfills its plans it will be very close to Polskie Młyny. However, "We want to strengthen our standing on the flour market in a way that enables us to control a 10% stake [in 2007 - 4%]," said Dorota Godun of Gdańskie Młyny and Spichlerze Dr. Cordesmeyer. Despite the serious announcements, the market leader is not scared.

"Polskie Młyny intends to retain and strengthen its position as market leader in the milling sector. We produce over 500,000 tones annually, which ensures us an over dozen percent stake in the market," said Irena Jagielska, spokesperson of Polskie Młyny.

According to experts, the plans of the German companies might be successful if they manage to acquire several local and troubled mills. (Puls Biznesu, pp. 1, 6-7) M.M.