New Markets business area
Continued focus on Southeast Asia, Russia and the Middle East
The New Markets business area offers Duni’s concept of attractive quality products and table setting concepts, as well as packaging solutions, focusing on non-European markets. The business area is responsible for the subsidiaries Duni Song Seng in Singapore and Duni in Russia, as well as other exports outside Europe. In addition to customer segments such as hotels, restaurants and catering, the business area also markets its offering to the grocery retail trade.
Net sales amounted to SEK 195 (150) m. At fixed exchange rates, this represents an increase in sales of 29.6%. With the exception of Russia, the business area has developed positively.
Operating income was SEK 1 (3) m and the operating margin was 0.8% (2.2%). The business area accounted for 5% (4%) of Duni’s net sales in 2014.
The business area’s strategy in brief:
- Focus on three geographic areas: Singapore, Russia and MENA (Middle East and North Africa).
- Continue to build on the acquisition of Song Seng and grow sales of premium products.
- Further develop the distributor network in regions where global customers demand that we are able to deliver.
New Markets focuses on three geographic areas:
Continued growth of the business in Singapore
The business area’s largest market is Singapore, where Duni currently has its own sales organization through the acquisition of Song Seng. With the establishment of Duni Song Seng in 2013, a stable basis was created for building up Duni’s business in Singapore and Southeast Asia. The business area was further developed during 2014, at the same time as contacts were created to grow sales of Duni’s premium products in the region. In the process, during 2014 Duni allocated new resources to Singapore, leading to a twofold increase in sales of premium products.
Approximately 25% of Duni Song Seng’s sales go to other countries in the region. The company has several global fast-food and cafe chains as customers. Hygiene is important on these markets – a trend which is being maintained. Sustainability and the environment are becoming increasingly important, and this is one of Duni’s strengths.
At the end of 2014, Duni Song Seng in Singapore had 35 employees. The business area has also recruited one employee, stationed in Hong Kong, to grow sales in the rest of the region. Other countries – from Japan in the North to Australia in the South – are controlled through some 15 distributors.
“Duni Song Seng in Singapore quickly adopted the new communication; with Goodfoodmood® we have a platform which can strengthen our unique position.”
Patrik Söderstjerna, Director business area New Markets
Challenges in Russia
2014 was a very turbulent year in Russia. During the year, the ruble lost approximately 40% of its value against the euro. This has had a significant impact on Duni’s business in Russia.
Russians are spending significantly less on restaurant visits, and restaurants are being forced to make savings, which in the long-term may lead to cheaper products replacing Duni’s range. A number of activities have been carried out to counteract the negative changes on the market.
Own resources in Dubai
Middle East and North Africa grew by approximately 30% in 2014. In 2013, the business area stationed an employee in Dubai, and a second one is planned for 2015. Focus is on napkins, tablecoverings and candles. The market is large and interesting, but occupancy rates at hotels in Dubai have fallen somewhat, and with that also demand for Duni’s premium products within the hotel sector.
The Duni brand has a strong reputation also in these regions. It is important to continue to increase awareness of Duni’s products. It is also important to have our own employees on-site in selected markets.
Strong growth in Australia
Australia recorded the strongest growth among the distributor-led markets. Other markets are also continuing to develop well. Variations in demand are considerably larger than on the European continent, a factor which places greater demands for flexibility.
|Net sales|||Operating income|
|Net sales, %|
|Middle East and <br/>North Africa||14|
|Asia and<br/> Oceania||6|
|South and<br/>Latin America||4|
The map shows the New Markets business area’s markets at the end of 2014/beginning of 2015. The red shading shows where New Markets has its own personnel: Dubai, Hongkong, Russia and Singapore. The pink shading shows where sales take place via distributors.