Contental Bakeries by yaofenji


									Continental Bakeries in France

       Best in France Case Study
       September 2006 - December 2006
   Szilard Buksa, Jacques de Sonis, Jordi Guitart Clermont,
              Heather Hurst and Diana Lupusor

1. Company overview

2. First Phase
  1.   Why it came to France?
  2.   Constraints in France
  3.   Adaptation to France

3. Second Phase
  4.   Benefits of direct investment
  5.   Essential advice
1. Company overview

2. First Phase

3. Second Phase
Company overview

• Leading producer and distributor of
private label biscuits in Western Europe     European Leader

• 6 European countries: Netherlands,
Germany, Belgium, Austria, Hungary,
 • Top three positions in all of the
 segments it operates in.

 • 1999 – have been acquired by IK
 funds, private equity Nordic company with
 a portfolio encompassing 24 companies

 • Sales went up 40% from €126 million in
 1998 to €175 million in 2005

Operating in the European food industry, the
company is focused on the following specific
segments: pastry products, biscuits and bread

A comprehensive range of international and
regional products

The Company designs, produces and distributes:

• sweetened (sandwich biscuits, wafers, honey cake and
• unsweetened (toast, rusk and rice cakes)
• savory biscuits (puff pastry)

The Company owns a limited number of strong international brands including
Haust. The major brands in the Haust portfolio are Haust, Bussink, Barkhuis,
Brink, Van Kooten and Pirou. In addition, Haust also produces private label
articles within the group and for fellow manufacturers.

                                                  Wafer rolls to accompany a
           Toast, savory biscuits, rusk
           and breadcrumbs                        cup of coffee or an ice-
                                                  cream dessert
           Deventer gingerbread and
           honey cake                             Puff pastry, savoury
                                                  biscuits, rusk, cake
                                                  products, sandwich
           Cookies, spiced biscuits,              biscuits, butter biscuits,
           butter biscuits, wafers and            shortcake biscuits and
           rice wafers                            ladyfingers

           Groningen gingerbread and               Wafers, ice wafers and
           deluxe cake loaves                      chocolate covered wafers

Head Office

 The Continental Bakeries (Haust) is headquartered in Dordrecht, the
 Netherlands employs approximately 800 FTEs in 11 locations.

 The Head Office accommodates the following corporate departments:
 - Automation
 - Board of Directors and Secretariat
 - Finance and Accounts
 - Purchasing and Logistics, including order handling and sales planning
 - Human Resources
 - Production and Technology, including quality assurance
 - Project Management
 - Marketing and Sales, including packaging development and export
 - Central Warehouse and Dispatch Department
French subsidiary

1996 - entrance in the French market as an importer
        •Transportable products(even if partaining to food industry)
        •Feasible transportation from single location
        •Advantages of scale economies

2001 - establishment of the Sales Subsidiary

Number of employees:
       3 with mainly commercial responsabilities
       60 commercial agents

Top ten sales in France
French clients
Company values

• Adaptation to every single client

• Focused on
   Innovation
   Proactiveness
   Leadership
   Internationalization
1. Company overview

2. First Phase

3. Second Phase
Why it came to France

Why did they enter the French market?
        Company’s goal: “to be number 1 in Europe”
        France is the biggest market in Europe (1,35 B euro)

Why did they establish a French subsidiary?
        Better convenience for clients (administrative procedures and
        Necessity for local differentiation of products
        Specificity of sheltered French market: easier to compete with
         local producers
        Avoidance of duplication of facilities
Constraints in France

• Foreseen Constraints
    Protectionism
    France is already well known for its bread products
    Must modify product to French tastes

• Discovered Constraints
    Diverse and varied taxes and paperwork
    TVA system: end distributor must add the TVA (TVA Law art.
     283.1 since 1st September 2006)
    “Shop Culture”
       Distributors from same group (ex. Leclerc) not well connected
    Cost of transport
Key Constraint Costs

• Communication
    Difficult to find many experienced bilingual talents in France

• Taxes
    Wide array of taxes leads to costs in figuring out how to pay
     them and who should pay them

• Transportation
Adaptation to France

• Recruitment/Selection: only French and
  distribution agents to deal with “shop culture”
• Innovative products but still low prices
• 20 years experience - Anticipating clients’ needs
• Administrative procedures
• Communication policies

… further adaptation needed
1. Company overview

2. First Phase

3. Second Phase
Benefits of direct investment

Their perception about the benefits of an investment in

       Cheaper labor force compared to Netherlands
       Current high transportation costs
       Increased coordination and control
       Distributors prefer local producers (because of
        logistic and TVA issues)
       Easier to find labor force
       The possibility of monopsonycal situation on local
        labor markets
Essential Advice

• Buy an existing French company

• Hire French employees

• Favor “royalties”
We thank

• Antoine CONSTANS
   French and Belgian Regional Director
   19 rue Steffen - 92600 Asnières sur Seine
• Professor Michael SEGALLA
Our Team

• Szilard BUKSA
• Jacques DE SONIS
• Heather HURST
Thank you for your attention

        Any question?

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