Finnish feed, food and ingredients giant Raisio Group has reported a return to the black and increased turnover in a year of change that saw it gain greater control over its activities - particularly in its ingredients division.
The company turned a 2006 loss of €28.1m into a €10.6m profit on revenue of €421.9m (€402.6m in 2006) as it consolidated activities, reigned in licensing agreements, dealt with raw material price hikes, and drove into new markets with new products.
Social and environmental responsibility was also high on the company's agenda.
"This means that combining healthiness, pleasure and convenience with ecological, plant-based nutrition can shift the direction of the food business," said chief executive officer, Matti Rihko.
A new policy that saw it abandon long-term fixed pricing for roaming four-month deals was introduced and would be fully implemented in 2008.
While its food (including Benecol foods and beverages) and feed divisions account for 91 per cent of Raisio's turnover, its ingredients division has seen great change.
The ingredients division, which account for nine per cent of the Group's turnover, saw its sales fall by from €49.7m to €44.9m - a drop of 9.6 per cent. But while turnover fell, the ingredients division's earnings rose from €7.8m to €9.5m as its consolidation reaped dividends.
Raisio won back regional rights to the plant stanol ester compound from its partners McNeil Nutritionals and Cilag GmbH International in the USA, Great Britain, France, Ireland, Belgium, the Netherlands and Luxembourg.
It also regained the rights to the Benecol brand in France and the USA in the product categories in which McNeil and Cilag are not currently active.
An accord with Unilever (owner of main rival Pro.activ) was inked to cease patent disputes globally between the two firms while back in Finland, the company expanded its Finnish wood and vegetable oil-sourced, stanol-production plant. Its other plant is in South Carolina on the east coast of the US.
It listed threats as:
- Slowdown in growth of European markets
- Slowed entry into new markets due to differing regulatory systems
- Stricter interpretation of European Union regulations
Raisio produces the Benecol plant stanol, cholesterol-lowering ingredient as well as Benecol cholesterol-lowering food range it sells in more than 30 countries. The range includes margarines, spreads, cream cheese-style spreads, yoghurts, yoghurt drinks, cereals, milk and soy drinks, pasta and olive oil.
Aside from providing the functional basis for its Benecol end-product range, the ingredient is also licensed out to other food manufacturers.
Vincent Poujardieu, vice president of business development and Raisio's ingredients division said the division had made Asian markets a special focus.
It had opened a sales office in Thailand as well as bolstering its position in India and China. The company's first foray into the Indian market involved a partnership with an Indian supplements maker to distribute a supplement containing a powder form of Benecol.
"Raisio is focusing on new and promising regions of the world," Poujardieu said. "Among these regions, Asia is certainly the most promising for functional foods or dietary supplements with heart-health related benefits. Changing lifestyle and eating habits have lead to the strong development of obesity, diabetes and, as a consequence, cardiovascular diseases."
An example being the cholesterol level of Beijing residents which has increased more than 20 per cent in 15 years, according to the World Health Organization (WHO).
"Raisio's strength lies in the ability of it and its partners to adapt to the purchase behaviour of local inhabitants and to offer Benecol product applications matching the local consumption habits," Poujardieu said.
Latin America was another market Raisio was focusing on - it launched a Benecol-containing yoghurt in Ecuador there in 2007.
The company said the market for cholesterol-lowering functional foods was growing "thanks to the rapidly-increasing awareness of and interest in the impact of diet on health and the prevention of diseases."
Raisio employs about 1,100 people in nine countries, with production facilities in seven.