Ahold completes Asian withdrawal
Dutch retail group Ahold has announced the sale of its last remaining
Asian business, Thailand-based CRC Ahold. The US and Europe will
now be the sole focus of Ahold's retail and foodservice operations.
Ahold has been restructuring its business for more than a year after poor performances and currency depreciations took their toll on results - a situation exacerbated by the discovery that the group's results had been overstated to the tune of €1 billion as a result of fraudulent accounting practices in the US.
The group's Latin American, Asian and Spanish operations were all slated for sale, as have been various minor business units in the US and Europe.
The sale of Ahold's stake in CRC Ahold to its partner, the Central Group, marks the end of the Dutch company's six-year flirtation with the Asian market. Thailand was the first Asian market targeted by Ahold with the creation of its joint venture there in 1997. This was followed by expansion to Indonesia and Malaysia - operations which were sold to the Hero and Dairy Farm groups respectively in early 2003.
CRC Ahold operates 47 stores and has a wholesale business delivering to some 300 convenience stores in Thailand. Its sales in 2003 were around €312 million. Ahold did not disclose the price paid for the business by Central Group.
Ahold is now left trying to find buyers for its businesses in Argentina, Peru and Spain, as well as part of its Brazilian business and various hypermarket, supermarket and convenience store businesses in the US and Poland, the proceeds of which will be used - like other the disposals before them - to reduce the company's debts and strengthen its balance sheet.
The group still remains a major player in the US retail and foodservice sectors, is the clear market leader in the Netherlands (although it has suffered somewhat from a high-price reputation in the recent recession) and has strong positions in a number of central and eastern European countries, not least Poland and the Czech Republic.
But despite the large number of businesses put up for sale by Ahold, the group's new chief executive officer Anders Moberg stressed that there was a distinct strategy being followed and that the new, streamlined Ahold would be better placed to face the challenges of the future.
"Every associate at Ahold recognises that we do not have the luxury of time or distraction. Our future, the future returns to our shareholders and the value we bring to customers, depends upon our undivided focus on rebuilding the strength of our business. Shareholders must also understand the importance of our need to stay focused on improving our competitiveness in all markets," he told shareholders at yesterday's AGM.
The results of the various investigations currently underway by the Dutch and US authorities would throw more light on the extent of the fraud, he said, repeating his call for shareholders to drop plans for a further investigation of the company's accounts.
"It is not in the best interests of the company to start any additional investigation," he said. "I want to appeal to you to wait at least until the current investigations are concluded."
"Let me make it clear that the difficulties which occurred in 2003 were the result of poor controls, and the misguided actions of a handful of individuals, and not wholesale corruption throughout our company. Those individuals found to have been involved have been dealt with. Some 39 executives and managers have been removed and 60 face disciplinary action of different degrees."
He said that new corporate governance guidelines introduced this year would make the company's accounts much more transparent and avoid the likelihood of further fraud in the future.
