The industry witnessed two surprising CEO appointments this week with new men set to take up the reins at Tate & Lyle and Bertolli owner Grupo SOS. After his take on the new man in charge at Tate & Lyle, Dean Best looks at the challenges that lie ahead for the Spanish food maker’s new boss.
Eyebrows were raised this week at the news of Tate & Lyle’s new chief executive but it was not the only senior management appointment to cause surprise among industry watchers.
Questions have also been asked about the move by Grupo SOS, the Spanish food maker behind the Carbonell and Bertolli olive oil brands, to hire Jose Manuel Muriel as its new CEO.
Muriel, a former dairy industry executive, joins SOS at a turbulent time for the business. The company has been shaken after a share scandal led to the departure of its chairman and CEO, two men now facing legal action from their former employer. SOS is also in talks to restructure its debt and is looking to a share issue to shore up its balance sheet.
SOS may have posted robust first-quarter results last week but Senor Muriel has a lot on his plate as he rejoins the food industry from Spanish car maker Santana Motor.
Muriel has joined a business busy renegotiating a mammoth EUR994m (US$1.39bn) syndicated loan after it broke covenants surrounding the lending agreement. SOS has also embarked on a court battle with its ex-chairman and former CEO over a well-publicised share scandal.
The former executives, Jesús Salazar and Jaime Salazar, remain major shareholders in SOS and it is unclear what impact the legal battle could have on their stake in the business. Muriel will also have to oversee SOS’s plans to raise EUR200m in a share issue prompted by the share scandal, which forced the company to restate its 2008 accounts – and record a EUR190m loss for the year.
A longer-term aim for the new SOS boss will be to pursue the company’s ambition to sell off assets including its vinegar and sauces business to reduce debts, a tricky task in this economic climate.
Last July, SOS looked to be in a position of strength and stumped up EUR630m to buy Bertolli from Unilever, a deal Jesús Salazar then labelled “absolutely strategic” in the group’s plan to become “worldwide leaders in olive oil”.
Bertolli has undoubtedly boosted the business. SOS saw profits from its olive oil businesses more than double during the first three months of the year, helping group earnings to climb by more than 55%. Olive oil now accounts for 97% of the company’s EBITDA and has strengthened the group’s presence overseas.
However, it is almost a year since the Bertolli acquisition and, despite the robustness of SOS’s olive oil business, the company, with a new CEO returning to food after a spell in the car industry, has plenty of distractions. It will be Muriel’s job to keep the eyes of the business on the road ahead.