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'We expect consumption in Europe to remain weak'

Natra to increase American and Asian presence by 50% in two years

By Jenny Eagle+

19-Dec-2013

Natra on its 2012-2015 Strategic Plan
Natra on its 2012-2015 Strategic Plan

Natra announced it will open a sales office in Hong Kong this year, as well as its first production site outside Europe, in Canada.

Ander Errasti, sales director, consumer goods division, Europe, Middle East and Africa (EMEA), speaks to FoodProductionDaily about its goals for 2014, including the implementation of an ERP management system to oversee all product development and manufacturing processes.

His division saw sales in cocoa and chocolate amount to €198.4m last year, 61% of the total turnover of the business.

The ERP project started in 2012 will be completed by 2015 as part of its Strategic Plan to make savings across the company in the monitoring and reporting of operations, administration and finance.

Jenny Eagle, senior editor, FoodProductionDaily speaks to Errasti about the roll-out of the program, challenges within the industry and what trends we can expect to see in the New Year.

When did Natra launch the new ERP management system?
Errasti: The ERP system supports the company’s business processes. We carried out an analysis and review of all processes in the value chain mid-2012 and decided not only to apply the standard continuous improvement cycle in our processes, but a complete reengineering of them. The new ERP was operative for the main commercial functions in January 2013, followed by the supply chain processes in April this year. We are currently working at the production sites level, and hope to finish the whole project by mid-2015.

Tell me more about your 2012-2015 Strategic Plan?
Errasti: Over the past 10 years Natra carried out a challenging policy of internationalisation through acquisitions, which was accomplished just at the time the financial crisis broke out. Between the years 2010-2012 the company adapted the debt structure resulting from those acquisitions into the new market circumstances and headed towards an industrial business model, as opposed to the buy-and-build model of the previous years.

In 2012 it was the right time for the definition of the strategic plan for the following four years, which defined product innovation, internationalization, customer partnerships and internal efficiency as the four main pillars for a sustainable and profitable growth.

For the right understanding of these four drivers, one must not forget that Natra is a producer of cocoa derivatives and chocolate products for the private label brand (PLB) (retailers) and other food companies. This explains the importance of product innovation to help our customers’ brands to compete with “A brands” and the resulting interest in shifting from “low-cost suppliers” to long-term relationships with our customers to back them in the strong development of the PLB worldwide.

What are your plans for international expansion?
Errasti: Although being a Spanish company, less than 20% of our turnover is generated in this market. The company has five production sites in Europe (two in Spain, two in Belgium and one in France) and 80% of our sales in Europe (mainly Spain, France, Germany, Belgium and The Netherlands). However, Natra announced at the beginning of the year the opening of a sales office in Hong Kong and its first production site outside Europe (Canada) for H1 2014. Natra expects to increase its presence in the American and Asia markets up to 50% of the total turnover by 2015. 

How will the ERP management system work?
Errasti: This system will support and integrate our supply, production, distribution, sales, financial and inter-company processes with an improvement-oriented view. This integration will increase efficiency both from the operational and financial point of view.   

What are your main challenges in the industry today?
Errasti: Mainly, on the one hand, to attend the increasing requirements of the retail sector in terms of product innovation, time to market and cost, with quality standards as a must.

But also to strengthen partnership relations with our food-producer costumers and trigger the industry to develop new business models far beyond co-manufacturing agreements.

What kind of savings are you looking at with regard to this software?
Errasti: The ERP will incorporate to the business new operational functionalities which are crucial, such as centralised order-taking and delivery, purchases, product development management, etc.

Currently, most financial, commercial, distribution and sales processes are running within the new ERP. Now it is time for the five production plants in the consumer goods division (one in Spain, one in France, two in Belgium and a coming one in Canada). One of the drivers that triggered this implementation was the new production plant in Ontario (Canada). This new site will start production in the coming months to address our customers demand in North America. After the completion of the whole implementation process, supply, production, distribution, sales, financial, and improvement-oriented processes will all be under the same umbrella.

How will you oversee the Europe, Middle East and Africa markets next year?
Errasti: Natra has its own sales team to manage on-site the commercial relationships with retailers and customers in other channels. The focus on partnerships and long-term agreements with customers shall allow us to grow both in volumes and profitability, even in mature markets as the European. Regarding Middle East and Africa, we expect to grow exponentially due to a high value added customized offer to retailers in the main countries.

Finally, what trends do you foresee in 2014?
Errasti: From the point of view of our own business, we expect consumption in Europe to remain weak but PLB’s market share in chocolate still benefiting from a slight positive progression. We expect to maintain our position in this market as one of the four leading producers of PL chocolate and to get better performances in the new international markets, ie North America and Asia. This will be backed on the increasing penetration of PLB in North America and agreements to supply chocolate producers there, and also on the increasing consumption of chocolate in Asia which, although not yet significant in volumes, it is relevant in terms of better profitability due to the product mix.

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