Hungary's leading mineral water producer to double production capacity

Hungary's leading mineral water producer to double production capacity
Szentkiralyi-Kekkuti chairman Levente Balogh (second right), now the 37th richest man in Hungary, speaking at World Water Day in 2017. / Szentkiralyi
By Levente Szilagyi in Budapest September 24, 2018

Mineral water and soft drinks company Szentkiralyi-Kekkuti on September 21 inaugurated a HUF2.2bn (€6.8mn) plant and bottling line at its base in central Hungary. The new production line has capacity to fill 32,000 bottles per hour, twice the present limit, said chairman Levente Balogh.

In order to secure the regional expansion of his company, Balogh was faced with the dilemma of selling out Szentkiralyi, a strong national brand.

Its profile had been given a further boost in 2008 when he signed up Portuguese national football star Louis Figo to give his face to the product. Balogh’s success propelled him to become the 37th richest man in Hungary by 2017.

The Hungarian businessman chose to partner with sector rival Kekkuti, owned by Alessandro Pasquale. The two businessmen set up CEMW, in which Balogh has a minority stake and he is the chairman of the company, while the Italians have the majority stake. CEMW became the owner of the joint company Szentkiralyi-Kekkuti, the leading producer of mineral waters in Hungary.

In January, Balogh teamed up with Czech soft drinks maker Karlovarske mineralni vody (KMV), owned by the Pasquale family, to purchase the Hungarian operation of soft drink maker Pepsi and gained exclusive franchise rights to distribute its products in Hungary. KMW also took ownership of the Czech and Slovak units of Pepsi, becoming the leading soft drink maker in the region.

The investment will further strengthen the company’s market position, Balogh added. Alessandro Pasquale said Szentkiralyi is one of the strongest and best-liked brands within the group, which also includes Magnesia, S. Pellegrino, Acqua Panna, and Perrier. The company’s revenues rose from HUF10bn in 2016 to HUF16bn in 2017, while after-tax profit in the same period declined from HUF1.5bn to HUF1.4bn. 

Hungary is one of the richest sources of mineral water in Europe as the country has more than 500 deep wells, and mineral water also flows from other 120 wells and springs. Even though the quality of tap water is above average, demand for mineral water has increased dynamically. 

In the last 15 years consumption surged ten-fold and now the country ranks amongst the top in Europe in per capita consumption.

 

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