Turkish food group Yildiz sets up UK company to expand abroad
08/06/2016 01:01
* New company pladis to list on London Stock Exchange
* Eyeing deals that bring distribution in Africa, SE Asia
* To bring Godiva chocolate to UK supermarket shelves
By Martinne Geller
LONDON, June 8 (Reuters) - The Turkish owner of Godiva
chocolate and McVitie's biscuits has set up a London-based
company that will boost its exposure to international markets
and investors, helping the company compete in an increasingly
competitive global food industry.
For now the new company, called pladis, is a wholly owned
subsidiary of Turkey's Yildiz Holding, parent company of Ulker
Biskuvi ULKER.IS and a major food company with 320 brands.
Yet within three or four years, pladis plans an initial
public offering in London that could see it become a FTSE 100
company.
Turkey's allure as a destination for foreign investment has
waned as security concerns and fears about President Tayyip
Erdogan's growing authoritarianism have knocked investor
appetite and the lira currency. urn:newsml:reuters.com:*:nL8N18Z30Q
"Pladis is a global company and London is a global city,"
Cem Karakas, its chief executive, told Reuters, adding that
pladis's goal is to be the preeminent snack food stock on the
London Stock Exchange. "I think there's a scarcity in the
market."
Karakas declined to say how big the IPO would be, but said
Yildiz would like to remain the majority shareholder, as it is
with Ulker.
Pladis will try to tempt a broad investor base with goals
for industry-topping annual sales growth of nearly 17 percent.
Its plans include the roll-out of Godiva chocolate and new
cake products on UK grocery shelves, the expansion of McVitie's
into a global brand, beefed-up sales distribution in the US, and
growth in the Middle East and Africa, where increasingly wealthy
consumers are eating more snacks.
"Snacking" and "grazing" are buzz words in a tepid packaged
food industry grappling with economic instability and a consumer
shift toward fresher foods. Snack foods appeal to busy people
who forego sit-down meals in favor of eating on the go.
Mondelez International MDLZ.O -- the world's biggest maker
of biscuits, chocolate and candy -- claims that focus is an
asset. Its 2015 revenue grew 3.7 percent, excluding issues such
as currency fluctuations and the loss of its coffee business. At
$30 billion, its revenue is six times that of pladis, which has
revenue of $5 billion, operations in 120 countries and 26,000
employees.
Combining Yildiz's Godiva chocolate business with the Ulker
and United Biscuits businesses into one company is aimed at more
efficient distribution and development of new products such as
McVitie's Digestives Nibbles, which went on sale in Britain in
February.
The result of collaboration between separate research and
development teams, the small, chocolate-covered biscuit balls
have already cornered 1 percent of the UK biscuit market, said
Ali Ulker, Yildiz's vice chairman.
Yildiz has long been known in and around Turkey but stepped
on the global stage in 2008, when it bought Godiva. In 2014 it
bought the UK's United Biscuits, maker of Jaffa Cakes and Carr's
crackers and DeMet's Candy of the US, which makes Flipz.
"We are quite an acquisitive animal," said Karakas, who
oversaw the last two deals, as well as the IPO of Bizim Toptan
BIZIM.IS . "In sub-Saharan Africa and southeast Asia we have
open eyes."
He said any upcoming deals will likely be "bolt-on" rather
than "transformative" due to a lack of large targets. He said he
is most interested in buying distribution, which could come from
a range of product categories.
There are no planned job cuts at the plant level due to the
combination, Karakas said, since the company is focused on
increasing its production and sales. Still, there will be
cost-savings, but he declined to say how much.
Despite the Ulker family's long investment horizon, Karakas
said the company would also not hesitate to sell a business if
it turned out to not work.
(Reporting by Martinne Geller in London; Editing by Alexandra
Hudson)
((martinne.geller@thomsonreuters.com; +44)(0)(2075420797;
Reuters Messaging: martinne.geller.reuters.com@reuters.net))
Keywords: YILDIZ BRITAIN/