Frigoglass: USA and Asia drive the ... chariot of growth

By: Roi Haikou (BMG)
Frigoglass connected the East and the West and reached the four corners of the planet. It looks ahead with optimism at 2010 despite the negative effects of the economic crisis, with great expectations from the recently acquired Universal Nolin in the USA and from the Asian subsidiary companies. Frigoglass is also expecting to see the first signs of economic recovery from the South-Eastern European markets.

"We are thrilled by our entry into the American market, acquiring Universal Nolin was an excellent choice for out company.” Petros Diamantidis, Managing Director

The managing director of Frigoglass (www.frigoglass.com), Mr Petros Diamantidis, stated that the company is aiming for growth in the American market. The management team is planning to expand the product portfolio of Universal Norin bringing the Frigoglass solutions to the American market of commercial refrigerators. “We are thrilled by our entry into the American market (which is estimated by 300 million euros for the year 2008), acquiring Universal Nolin was an excellent choice for out company” said Mr Diamantidis, explaining that approximately 30% of the global bottling market operates in North America. For that reason around 25 million euros will be invested within the present year. A large part of this investment focuses on improving the company’s effectiveness and insuring the entrance of the Frigoglass products in the production line.

The Universal Nolin market share is estimated between 6% - 8% and Frigoglass ‘s goal is to reach at least a 20% share within the next years. It is also worth mentioning that the Universal Nolin existing administrative team is familiar with the American market hence it remains in place.

Frigoglass and Coca-Cola share long-term bonds and therefore it is expected that the American Giant will promote sales growth in the USA.

One of Frigoglass’ s competitive advantages is the environmentally friendly Ecocool refrigerators range and also the fact that this is the first company of its kind that offers a complete range of  “green” deep-freeze products. For that reason the company’ s entrance into the American market creates new important opportunities. Coca-Cola has already started to replace its commercial fridges with environmentally friendly ones. Although 2009 results suffered the negative effects of the crisis, Frigoglass has all that is needed to achieve high growth rates in 2010.

Many believe that the USA is only the beginning judging from the manner in which the group has been geographically expanding until today. The management team is aiming that the company enters into new markets. For that reason the United States are thought to be the first stop of the group’ s expansion into the ... New World.

Asia – Oceania

Frigoglass has big expectations from the Asian markets, especially China which is the fourth larger Coca-Cola consumer. “We see great potential in the Chinese market” stated Frigoglass executives adding that the operations in China have produced the first significant sales in 2009 and have contributed to a sales rise in Asia during the year.

The operations in China have produced significant sales in 2009 contributing to a sales rise in Asia during the year. As a result, the sales of the Group are geographically balanced whilst Asia is playing the leading role. More specifically, in 2009 operations in Asia produced a total of 27,4% of the Group’ s total earnings and doubled its contribution compared to 10,1% of last year’ s. On an annual growth level the Asian market accelerated by a 73,9% sales growth rate, which amounted to 72,2 million euros making Asia the only geographical region that had positive earnings.

Similar to 2009, in the present year Frigoglass’s main priority is the best possible exploitation of the production plants in China, India and Indonesia. The fact that the “land of dragons” is the global recovery steam engine reinforces Frigoglass’ s promising perspectives in that geographical region. 

Europe

The managing team of Frigoglass expects the South-eastern European markets to recover first, a conclusion based on samples from the fourth trimester of 2009. Western Europe prospects seam more promising than the ones in 2009, whoever, as Mr Diamantidis mentions “compared to the South-eastern Europe, recovery will have a slower rate”.

According to the results of 2009, South-eastern Europe took a dive by 63,9% with sales at 59,6 million euro and countries such as Russia, Ukraine, Rumania, Poland and Bulgaria diving the lowest.The sales in Western Europe have fallen by 44,3% for the entire year, mainly due to a substantial sales decrease in Germany and Italy.

The African market shows a sale increase

Frigoglass will focus on operations in Nigeria this year, aiming to strengthen its presence in the African continent. “Nigeria continues to positively contribute to the operations of our group”, mentioned Mr. Diamantidis. Within the 2010 investment plan, investments will be included to raise the productivity of the plants.

Sales in Nigeria have risen by 2,4% for the entire year and are estimated at 72,7 million euros. Sales in Nigeria represent 22% of the total sales compared to last year’ s 15%. Sales in the glasswork industry dropped by 1% in euro and amount to 51,9 million euros. (However they have risen by 16,4% in the local currency due to the devaluing of Naira). The sales of the rest of the Nigerian operations (metal and plastic lids) also rose by 12,1% in euros totalling 20,9 million euros. Net profit from Nigeria amounts to 5,9 million euros. Sales in Africa and the Middle-East dropped by 16.5% for the year although they increased at the fourth trimester driven by South Africa and Kenya.

The results of 2009

Frigoglass ended the financial year 2009 with a drop in sales by 30,8% which amounts to 337,6 million euros. The fourth trimester sales have risen by 42,4%, totalling 91,4 million euros and demonstrating a successive improvement compared to the third trimester of the same year. The consolidated net profit of 2009 dropped by 84,4% totalling to 3 million euros, with the additional charge of a higher tax rate and the increased minority vote rights. Net profit was effected in the fourth trimester from the backdated extraordinary tax contribution that all the Greek business had to pay and amounted to 5,5 million euros for Frigoglass.

With the extraordinary tax contribution excepted, net profit of the entire year amounted to 8,5 million euros, dropping by 56,1% versus 2008.

One of Frigoglass’ s biggest clients, Coca-Cola marked a 21,3 % sales increase during the entire year. Brewery sales dropped by 21,3% for the entire year. Sales to Coca-Cola Hellenic amount to 14,7% of the deep-freeze industry for the year 2009. (bmg)