Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Griffin's to ramp up exports under new ownership, CEO says

Griffin's to ramp up exports under new ownership, incoming CEO Taylor says

By Paul McBeth

July 23 (BusinessDesk) - Griffin's Foods, the maker of Gingernuts and Eta brand snacks, plans to lift exports to more than 50 percent of sales within five years by leveraging new owner Universal Robina Corp's links in southeast Asia, says incoming chief executive Alison Taylor.

Auckland-based Griffin's was sold to URC for $700 million this week, ending about eight years of ownership by Australian private equity firm Pacific Equity Partners. The company can use URC's networks in Asia to meet growing global demand for New Zealand-sourced food, Taylor told BusinessDesk.

"We're certainly expecting in the next five years doing more business globally, with over 50 percent coming from offshore," Taylor said. "The Asian market is the next natural stop for us."

The government is looking to increase the country's exports to 40 percent of the economy by 2025, and has tasked the Ministry of Business, Innovation and Employment to analyse food and beverage exports, which account for more than half of New Zealand's merchandise trade.

Local manufacturers exported about $287 million of snack foods in 2012 out of a total $1.72 billion processed food exports, according to a Coriolis report for the Food and Beverage Information Project published in January.

About a third of Griffin's $280.8 million in annual revenue came from exports in calendar 2013, up from as little as 2 or 3 percent of its $186.4 million in sales in 2006, when PEP bought the manufacturer. The Coriolis report ranked Griffin's the country's seventh-biggest processed food firm.

Griffin's has excess capacity at its two South Auckland plants, Taylor said. PEP said it had invested $180 million in the company over the course of its ownership to improve the manufacturer's efficiency. That included some $55 million it spent buying the Nice and Natural wrapped snacks business.

The Philippines food and beverage company will pay $100 million upfront, with the balance to be paid once the deal is completed, and will be funded from long-term debt financing and internal sources, URC said in a statement to the Philippines Stock Exchange. The sale needs Overseas Investment Office approval.

"The proposed acquisition is expected to transform Griffin's international growth strategy as it will benefit from URC's existing distribution networks across the Philippines and other Asia countries," URC said. "In addition, the acquisition complements URC's product portfolio, leveraging its distribution strength to sell a premium range of products in its home and international markets."

PEP tried to sell Griffin’s in 2011 after struggling to find a buyer. It was reportedly looking for a price in the range of seven to nine times earnings, which were about $108 million at the time. The sale to URC was at a multiple of 8.97 times earnings before interest, tax, depreciation and amortisation of $78 million.

The Australian private equity firm bought Griffin’s for $292.4 million in 2006 from French food group Danone at an enterprise value of $385 million

The sale comes after accounts for NZ Snack Food Holdings show the Griffin’s holding company made a capital return of $192 million in a share repurchase in the same year PEP refinanced the food manufacturer.

The group had interest bearing debt of $442.4 million as at Dec. 31, up from $234.6 million a year earlier, according to financial statements lodged with the Companies Office. The $274.5 million of bank debt matures in January 2016, while $167.9 million of mezzanine notes mature in January 2019.

NZ Snack Foods reported a 75 percent slump in profit to $5.1 million in calendar 2013, as its finance costs climbed by more than half to $23.8 million. Revenue fell 4.3 percent to $280.8 million. Gross margins were largely unchanged at 53 percent. Operational cash inflow more than doubled to $34 million, and the group held cash of $34.8 million as at Dec. 31.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Cosmetics & Pollution: Proposal To Ban Microbeads

Cosmetic products containing microbeads will be banned under a proposal announced by the Minister for the Environment today. Marine scientists have been advocating for a ban on the microplastics, which have been found to quickly enter waterways and harm marine life. More>>

ALSO:

NIWA: 2016 New Zealand’s Warmest Year On Record

Annual temperatures were above average (0.51°C to 1.20°C above the annual average) throughout the country, with very few locations observing near average temperatures (within 0.5°C of the annual average) or lower. The year 2016 was the warmest on record for New Zealand, based on NIWA’s seven-station series which begins in 1909. More>>

ALSO:

Farewell 2016: NZ Economy Flies Through 2016's Political Curveballs

Dec. 23 (BusinessDesk) - New Zealand's economy batted away some curly political curveballs of 2016 to end the year on a high note, with its twin planks of a booming construction sector and rampant tourism soon to be joined by a resurgent dairy industry. More>>

ALSO:


NZ Economy: More Growth Than Expected In 3rd Qtr

Dec. 22 (BusinessDesk) - New Zealand's economy grew at a faster pace than expected in the September quarter as a booming construction sector continued to underpin activity, spilling over into related building services, and was bolstered by tourism and transport ... More>>

  • NZ Govt - Solid growth for NZ despite fragile world economy
  • NZ Council of Trade Unions - Government needs to ensure economy raises living standards
  • KiwiRail Goes Deisel: Cans electric trains on partially electrified North Island trunkline

    Dec. 21 (BusinessDesk) – KiwiRail, the state-owned rail and freight operator, said a small fleet of electric trains on New Zealand’s North Island would be phased out over the next two years and replaced with diesel locomotives. More>>

  • KiwiRail - KiwiRail announces fleet decision on North Island line
  • Greens - Ditching electric trains massive step backwards
  • Labour - Bill English turns ‘Think Big’ into ‘Think Backwards’
  • First Union - Train drivers condemn KiwiRail’s return to “dirty diesel”
  • NZ First - KiwiRail Going Backwards for Xmas
  • NIWA: The Year's Top Science Findings

    Since 1972 NIWA has operated a Clean Air Monitoring Station at Baring Head, near Wellington... In June, Baring Head’s carbon dioxide readings officially passed 400 parts per million (ppm), a level last reached more than three million years ago. More>>

    ALSO:

    Get More From Scoop

     
     
     
     
     
     
     
     
    Business
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news