Danone Enters Egypt, Algeria

LONDON - Oct 18/05 - SNS -- Groupe Danone is buying Egypt's Olait, a maker of plain and fruit-flavored yogurts and dairy desserts.

Created in 2003, the company owns a production plant near Cairo with an annual capacity of nearly 25,000 metric tons (MT) and backed up by a distribution fleet. Its products are to be marketed under the Danone.

Groupe Danone has also signed a new agreement with Tunisian company Sotubi, its partner since 1998, for the development of biscuit business in Algeria. Groupe Danone and its Tunisian partners in Sotubi are setting up a joint venture in Algeria with respective equity interests of 51% and 49%.

Groupe Danone will be responsible for operational management, bringing the benefit of its know-how in marketing and technology, while Sotubi will contribute its knowledge of market and distribution channels. The new company will be investing in the construction of a new plant in Alger within a few months.

This agreement for expansion into the Algerian market is associated in Tunisia with a rise in Groupe Danone's interest in Sotubi from 20 to 49%. Sotubi is the leading biscuit maker in Tunisia with over 60% of the domestic market.