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Centrale Danone Loses $16 Million due to Morocco Boycott

Centrale Danone Loses $16 Million due to Morocco Boycott

Tuesday, 5 June, 2018 - 10:00
Centrale Danone
Casablanca - Lahsan Maqnaa
Centrale Danone, the Moroccan branch of Gervais Danone, estimated its losses due to a boycott of its products in Morocco at around 150 million dirhams (USD16 million).

The company reported in a statement Monday that its activity dropped around 50 percent since the boycott campaign was launched on April 20.

Several measures were taken to ease the impact of the boycott, said Centrale Danone, including reducing its supply of fresh milk from 120,000 Moroccan farmers, in addition to terminating the operating contracts of hundreds of temporary workers.

Although Centrale Danone is listed in Casablanca stock, Gervais Danone owns a 99.68 percent of its capital for historic considerations.

In 2014, Gervais Danone purchased Morocco’s National Investment Company’s stakes in Centrale Laitière and changed its name to Centrale Danone. The French group continued its acquisition of 99 percent of the capital of Centrale Laitière.

Owning this stake, however, puts the French group before the option of withdrawing the Moroccan company from the stock market or issuing a stake of the shares that exceeds 20 percent of its capital for public sale.

The drop in sales that the company witnessed since being acquired by the French group, in addition to the weakness of the Moroccan capital market in recent years, made Danone wait for better conditions to carry out the public sale.

Given the share acquired by the French group in the Moroccan company, the price of shares of the latter was not affected by the boycott.

In May, the price of Centrale Danone shares rose around 15 percent despite the boycott.

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