Nordic consumer goods group Orkla has said the new CEO of its recently-formed confectionery and snacks business will look at potential M&A opportunities.
Orkla this morning (8 April) announced the appointment of Arla Foods executive Christer Åberg to lead its confectionery and snacks business, which was formed as part of the group’s new corporate structure announced in January.
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The company plans to set up a single unit in each country for the new division in a bid to increase its competitiveness in the category. The restructuring will see the merger of its KiMs Norge, Sætre and Nidar units into a single company in Norway. Similarly, Orkla intends to merge its OLW and Göteborgs Kex businesses in Sweden, and Chips and Panda in Finland.
Orkla’s confectionery and snacks business will also include Danish arm KiMs and Latvian subsidiary Latfood but neither unit will be affected by the mergers. Its Krupskaya and SladCo units will also not be affected.
A spokesperson for Orkla told just-food Åberg’s first task when he joins the company in August will be to “enter the new organisation with fresh eyes”.
The spokesperson added Åberg will look at internal growth initially but suggested M&A could also be on the agenda. “We are always open for new possibilities,” he told just-food.
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By GlobalDataOrkla president and CEO Åge Korsvold said the revamp would help it compete more effectively with larger rivals. “It is absolutely essential to determine how we can increase our competitive strength and create new growth opportunities in the Nordic region. We must be optimally equipped to do battle with strong international players. Establishing larger entities will create more opportunities for innovation within and between categories.”
Orkla said staff and trade union representatives have been informed of its intention to establish a single company for snacks, biscuits and confectionery in Norway, Sweden and Finland.
Asked whether there might be job cuts as a result, the spokesperson said: “This is not a cost-cutting structure, this is about being more competitive and creating more top-line value. But you cannot make guarantees”.
A regional head will be appointed for the new companies but the spokesperson said these will be announced at a later date.
The conglomerate is in the process of selling off its non-core activities, such as interests in aluminium processing, as it looks to transform itself into a consumer-facing FMCG group.
But while Orkla has made progress in selling off a number of non-core activities in 2012, Korsvold told a conference last month that the group must also improve the operational performance of its core business.
Orkla operates a number of different businesses across five key areas: food, confectionery and snacks, home & personal care, food ingredients, and international (focused on Russia, eastern Europe). Consumer food operations generate about 60% of sales.
