Sector News

Yildiz Holding splits Pladis into separate company

June 8, 2016
Food & Drink

Godiva owner Yildiz Holding is splitting its biscuit, chocolate and confectionery unit, Pladis, into a separate company it plans to list publicly by 2020.

Yildiz Executive Deputy Chairman Cem Karakaş, who will serve as chief executive of the new company, said he expects to list Pladis within the next three to four years on the London Stock Exchange and that it would be a FTSE 100 entity. The brands that now make up Pladis, including Godiva, McVitie’s, Ülker and DeMet’s Candy, had about $5.2 billion in revenue last year, he said.

Yildiz, which is Turkey’s biggest food producer and made $12 billion in sales last year, owns a range of businesses, from dairy products to frozen food. In recent years, it has increasingly displayed ambitions to go global. In 2008, it bought high-end chocolate brand Godiva, and in 2014, it acquired United Biscuits Ltd., which owned McVitie’s and Jacob’s Cream Crackers.

Mr. Karakaş said the new company would allow brands to benefit from shared research-and-development capabilities, allowing it to bring innovations that work well for one product to others. He said Pladis plans to release new products under the Godiva and McVitie’s brands this fall.

Yildiz in December launched McVitie’s Digestives Nibbles in the U.K., chocolate-coated cookie balls aimed at people who snack. In the U.S., it launched a chocolate-and-biscuit Godiva bar in September, borrowing from the success of a similar bar developed by Ülker, one of Yildiz’s main cookie and confectionery brands in Turkey and the Middle East.

The new company—which has 36 factories in 13 countries and employs 26,000 people—will accelerate the international expansion of its brands, consolidate its various sales teams and sell various brands through enhanced distribution networks. But Mr. Karakaş said most decisions would be made at the local level, with the decentralized structure key to helping it bring products to market faster than rivals.

Yildiz Vice Chairman Ali Ülker said the company is looking to position Godiva strongly in the mainstream chocolate space rather than just as a high-end brand.

“We believe it’s time to sacrifice some of the brand equity,” he said, adding that the company has begun launching new, more affordable formats like smaller packs or tablet-style chocolate bars that are cheaper to produce.

By Saabira Chaudhuri

Source: Wall Street Journal

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