News

Orkla business makes acquisition, parent sees profits rise

1 Nov 2017

Orkla Food Ingredients has signed an agreement to purchase 100% of the shares in Arne B. Corneliussen, a manufacturer and supplier to the Norwegian food industry, while Orkla reported that its operating profit grew 8%.

Orkla Food Ingredients has signed an agreement to purchase 100% of the shares in Arne B. Corneliussen, a manufacturer and supplier to the Norwegian food industry. The company’s product portfolio consists of spices, marinades, flavourings, starter cultures and other functional ingredients, in addition to packaging solutions. Its customer market is Norwegian food manufacturers with the Norwegian meat industry as main segment.

Orkla Food Ingredients provides bakery ingredients to the Nordic region, supplying products such as margarine and butter blends, yeast, bread and cake improvers and mixes, marzipan and ice cream ingredients. In acquiring Arne B. Corneliussen, the business area will expand its product range and customer base in Norway.

“This acquisition gives us access to a new growth platform in the food industry,” said Pål Eikeland, Orkla EVP and CEO of Orkla Food Ingredients. “The purchase of Arne B. Corneliussen also offers potential for synergies with our existing ingredients operations in Norway, in the form of a more strategic focus on the out-of-home sector as well as savings in areas such as purchasing and distribution.”

Arne B. Corneliussen, established in 1949, has been owned since 1995 by DAT-Schaub, a subsidiary of Danish Crown.

“We have had nothing but good experiences during our period as owners of Arne B. Corneliussen, but the time has now come to concentrate our operations,” said Jan Roelsgaard, CEO of DAT-Schaub. “We think that a Norwegian owner will be positive for the company, and we look forward to continuing the close collaboration between DAT-Schaub and Arne B. Corneliussen.”

The company, which has 32 employees, has its head office, production facilities, test kitchen and warehouse at Økern in Oslo. The business now being sold had a turnover of NOK188 million in 2016. The parties have agreed not to disclose the purchase price.

Concurrently, parent company Orkla reported that its operating profit grew 8%, ending the third quarter of 2017 at NOK1,267 million. For the Branded Consumer Goods business, operating profit advanced 5%.

Orkla’s operating revenues increased 5% to NOK9,858 million. The Branded Consumer Goods business delivered a 4% increase in sales, with organic growth accounting for 1.2%.

“It has been a challenging quarter, with continued price increases for key commodities in the EU,” said Orkla President and CEO Peter A. Ruzicka. “We have nonetheless managed to improve our operating profit as a result of both top-line growth and cost savings. For the 14th consecutive quarter, we have achieved organic sales growth in Branded Consumer Goods.”

Sales growth at Orkla Foods was broad-based. Orkla Confectionery & Snacks increased its turnover and developed well in all regions except Norway, the company said. Orkla Care experienced sales growth in all companies apart from House Care. Revenue performance at Orkla Food Ingredients was on a par with the corresponding quarter in 2016.