New Markets business area
WITH THE WORLD AS A MARKET
With the acquisition of the napkin manufacturer Terinex Siam in Thailand, Duni’s position outside Europe has been further strengthened.
Business area strategy in brief:
Focus on four geographic areas: Southeast Asia, Russia, the Middle East and North Africa
Continue to build on the acquisitions of Song Seng and Terinex Siam and grow sales of premium products
Further develop the distributor network in regions where demand for Duni’s concepts is strong
Acquisitions and new strategic partnerships complement organic growth
The New Markets business area sells Duni’s concepts and products in markets outside Europe. The business area includes the subsidiaries Duni Song Seng in Singapore, Terinex Siam in Thailand and Duni in Russia, as well as exports to other markets such as the Middle East, Oceania, the rest of Asia, and North and South America. The business is primarily focused on the HoReCa segment and retail chains.
Duni operates on a number of markets outside Europe. In Russia, a continued weak currency has impacted consumption. Duni is working proactively to adapt to the prevailing circumstances. Reduced financial exposure to Russia has been prioritized, as well as a product range which includes more low price category alternatives.
Other countries included in the business area have performed somewhat weaker than last year. Singapore experienced negative growth due to the low oil price and reduced trade with the rest of the world. Certain markets in the Middle East were also adversely affected by the lower oil price.
ACQUISITIONS STRENGTHEN THE PLATFORM IN SOUTHEAST ASIA
Being established outside Europe is a key factor for generating good business on new markets. Therefore, the acquisition of Song Seng in Singapore in 2013 was important. By owning and operating a company in Asia, Duni obtained a foothold for introducing its premium products to a number of countries. Access to larger networks and more sales channels has been a natural consequence.
In 2016, an additional growth initiative was carried out. In the middle of the year, Duni acquired 60% of the shares in Terinex Siam in Thailand, a leading manufacturer and supplier of primarily, napkins but also of single-use products for food. The acquisition has resulted in several advantages. Clear growth advantages result from Duni having its own production base in Asia. In addition, the product offering has been broadened, particularly in the low price category, and thereby access to new and important customers has increased.
“The acquisition of Terinex Siam means that Duni is able to introduce a complete offering to major customers outside Europe. It creates business with good potential for long-term growth.”
Patrik Söderstjerna, Director Business Area New Markets
PARTNERSHIP FOR THE FUTURE
The acquisitions in Asia in recent years have been important from a number of reasons. New partnerships provide valuable learning experiences, and the importance of being open-minded when encountering other corporate cultures cannot be emphasized enough. Therefore, it is essential to develop the companies further in order to retain the strong expertise that they already possess.
INCREASED INTEREST IN AUSTRALIA
Australia is increasing in popularity as a tourist destination and, following the acquisition of Terinex Siam, it is even more relevant to cultivate the Australian market. Meeting such a market with a complete range of products in all price classes opens up new possibilities. In total, the acquisitions have resulted in improved conditions for creating good relations with large, global chains within the hotel and grocery industries, an important customer category for Duni’s export goods.
During the year, work has continued on introducing Duni’s Code of Conduct in the new companies. Regular training courses are being held with suppliers. The work is appreciated and regularly followed up. An increasing number of customers and employees are taking note of Duni’s committed approach to the environment and corporate social responsibility. This contributes to a good reputation and thereby benefits both sales and market position.
New Markets’ markets
Own personnel: United Arab Emirates, Australia, Russia, Singapore and Thailand
Selling take place through distributors
Not included in New Market’s market
|Net sales|||Operating income|
|Net sales, %|
|Asia and Oceania||62|
|Middle East and North Africa||12|
|North, South and Latin America||7|