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51
However, this partnership (which 6( capture) almost 50% of the volume of fluid
milk marketed in Canada) did not materialise, and in December 2000, Dairy-
world dairy operations 7(buy) by Saputo. The latter is also very active in the
consolidation process. Saputo, a Quebec private processor, 8(buy) a few years
ago a major American cheese maker (Stella Foods). The company has posi-
tioned itself as an important supplier for restaurants and food services, and is
very active on the retail and export markets. Saputo is currently the number one
dairy processor in Canada and may become an important player on the interna-
tional scene in a near future.
Sales of ice cream in Canada 9( dominate) by two multi-national compa-
nies, Nestle and Unilever, while two other multi-national firms, Danone and
Parmalat, are important players on the Canadian yoghurt market. Still in 1997,
the partnership of two co-operatives (Agropur/Dairyworld), named Ultima, is
the other important player on the yoghurt market. However, it should be noted
that with the exception of Parmalat, and to a lesser extent Kraft, the processing
activities of multi-national firms in Canada do not require much raw milk. In
fact, by the nature of the dairy products process, most buy dairy components
rather than raw milk, while others contract part of their processing. Thus, they
10(more involve) in the marketing of their brand name than in physically
processing their products, which fit in with the new concepts that owners of
global brands will in the future concentrate their management effort and finance
on the branding activity, while subcontracting the manufacturing function to
approved firms (Pitts and Krijger, 2001). Parmalat, which was completely ab-
sent from Canada before 1997, is the exception. Through acquisitions and part-
nerships, Parmalat 11 (now become) one of the most important Canadian dairy
processor.
T a s k S i x . Read the article and make up questions.
DRIVERS OF STRUCTURAL CHANGE
Canada’s dairy processing sector has gone through a major rationalisation.
However, the very low rate of internationalisation of Canadian dairy firms is
striking. In a country where growth from the milk supply is almost non-existent
(2,6% total increase in the milk supply from 1983 to 1997), one would think that
the search for economies of scale would have to lead to the internationalisation of
the industry. Moreover, during the 1983 – 97 period, foreign multi-national dairy
groups, such has Parmalat, Danone and Unilever, have made their entry or in-
creased their presence on the Canadian dairy market through acquisition.
To explain the drivers of structural change, to understand the lack of in-
ternationalisation of Canadian dairy firms and the reasons that made Canada
attractive to foreign firms, three points will be analysed. First, the relative struc-
tural lag of the processing industry, second, we will look at changes in dairy
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