Ansgar Bornemann, regional director at Nestle Adriatic - We are ready to consider every good acquisition opportunity in Serbia

(Ansgar Bornemann)

Nestlé came to the Adriatic region (Serbia, Croatia, Bosnia-Herzegovina, Macedonia, Montenegro and Slovenia) eight years ago, when it had about 50 employees. Now this company employs about 1,000 workers in this region. They operate two factories in Serbia - an ice-cream factory in Stara Pazova and a spice and confectionery factory in Surcin. Although Nestlé Adriatic d.o.o. was established in Zagreb in 2003, Nestlé brands are present in the region from before. For example, brands like Maggi and Thomy are known since the time they were produced at factories Podravka and Kolinska.

When they entered the market of Serbia, their main goal was to explore all business opportunities with the aim of positioning their product portfolio and then to further develop and improve their operations. In an interview with eKapija, Ansgar Bornemann, newly appointed regional director at Nestlé Adriatic, speaks about how they see the market of Serbia when compared to the rest of the region, whether we can expect some new acquisitions from them after the Centroproizvod takeover, why they've moved their headquarters from Zagreb to Belgrade, and whether they plan to expand the network of local suppliers.

eKapija: What has been the general development of Nestle in the Adriatic region, which comprises Serbia, Croatia, BiH, Macedonia, Montenegro, Kosovo and Slovenia over the last years?

- Nestlé has started with business operations in Adriatic region eight years ago, with about 50 employed people, and now it counts around 1,000 employees, having two factories in Serbia – ice cream factory in Stara Pazova and recently acquired factory for culinary products in Belgrade in Surcin suburb.

Although the company Nestlé Adriatic doo was founded in Zagreb in 2003., Nestlé brands are present in the Region for much longer.

MAGGI and THOMY products are well known to our consumers since the time they were produced in regional Podravka and Kolinska factories.

Our main objective when we enter the market, was first to explore all the business opportunities in order to establish our portfolio and then to further develop and improve it.

At the moment, we are offering numerous brands to our consumers all over the region, such as NESCAFÉ, THOMY, MAGGI, NESQUIK, KITKAT, SMARTIES, LION, PURINA, NESTLÉ cereals and full Ice-cream portfolio. With acquisition of Centroproizovod we have strengthened our culinary portfolio.

eKapija: In which markets and product segments have you seen the highest growth rates?

- Despite rough business environment in the recent years Nestlé Adriatic marked good business results - Business was continuously growing in all countries of the Region and in most of our categories market shares are going upwards.

Our volumes are growing year on year mostly thanks to the enriched product portfolio and constant Innovations and renovations. Consequently, categories that were growing the most are coffee - thanks to the big Innovation of Nescafe Dolce Gusto, as well as pure soluble and Ice cream in Serbia.

eKapija: How do the markets of former Yugoslavia differ from Western Europe? How do the preferences and tastes of consumers differ?

- The food culture in the Adriatic region has a very important role and this is one of the driving forces of growth for Nestlé, as food industry.

People here really appreciate “the good food.“ Therefore, this is an even more challenging task. In the Western Europe, on the other hand, the trends of eating healthier and taking care of the nutrients is more and more present.

Continuous investment in research and development is a key advantage of Nestlé Company, which has led the Company to the leading position in the world when it comes to Nutrition, Health and Wellness.

Nestle is constantly creating nutritional value and health benefits across our product range offering that the products not only taste better and are of high quality, but are also more nutritious. This ratio between healthy but tasty meal is very important to the consumers in the region as well, as I can notice.

Additionally, one of the mayor priorities for us it to listen to our consumers need and to create portfolio of products in line with the consumer expectations of the community we operate in.

eKapija: What is your strategy for the future and how do you see the markets of the region develop in the next ten years?

In the next few years we plan to keep up good sales records, increase our volumes and continue to grow the organization.

The overall business climate in the next decade is certainly going to be very challenging, and it is not simple to predict how all circumstances may influence further business developments.

Markets in the region, however geographically and historically linked, are quite segmented and diverse from consumers’ habits, capabilities and needs to regulations and economic tendencies from country to country - with Slovenia begin part of EU for decades, Croatia’s entrance and hopefully Serbia gaining the application this year. Adding to it the current overall difficult situation on the global level, we can only conclude that the future business, not only in the region but in general, will be demanding, but all this will open new opportunities and confronts.

Our strategy however for this and coming years is to deliver on our growth opportunities and benefit from our drive for continuous improvement across the Nestlé Adriatic.

eKapija: After Centroproizvod, do you, maybe, plan some new acquisition in Serbia?

- With the Centroproizvod acquisition we once more proved our commitment to strengthen our regional portfolio and invest in the Adriatic region. As a company, Nestlé is open to further growth of its business operations.

This also means acquiring the new ones if a good opportunity in line with our strategic plans emerges. As a matter of fact, we always search for new acquisition targets, but at the moment, we do not have any concrete company in plan.

eKapija: Nestle Adriatic has recently moved its headquarters from Zagreb to Belgrade. Why have you decided to do that, especially considering that Croatia is supposed to join the EU this summer?

- Nestlé Adriatic covers 7 markets of the region and our management team operates from an office that is the most convenient for the current business conduct.

As the most activities today are in Serbia, where the biggest number of our employees and both production plants are, I have decided to use offices in both of the biggest markets of the region – in Zagreb and in Belgrade.

Development and growth of Nestle Adritatic has led to the empowerment of some management function outside of Croatia, i.e., the central team for our culinary category is based in Belgrade where our culinary factory is and that is the case with the ice-cream division too.

Other divisions, like beverages and confectionary are managed from Zagreb.

eKapija: Will you continue to invest in production facilities in the region?

- It is in our utmost interest to empower the existing product lines and upgrade the facilities in order to maintain the highest production quality standards as well as to enrich the regional assortment.

In 2013 we will further invest in our Factory in Surcin, according to the model that we have already implemented in our Ice Cream Factory in Stara Pazova.

Furthermore, we've developed a clear export strategy for our products from the Factory in Surcin to countries in the EU. We are continuing with investments in innovations and the development of new products.

ekapija: What will you do to increase the degree of local sourcing and to develop a network of local suppliers, considering the great agricultural potential in the region?

- As the world’s leading nutrition, health and wellness company, we provide our consumers with the best tasting, most nutritious choices in a wide range of food categories and eating occasions. Likewise, our mission is to create benefits to local community by supporting local market production and businesses growth, in every country we are operating in. Development and growth of local suppliers is, therefore, in line with our overall business strategy.

In that respect, different models of cooperation with local raw material and packaging suppliers in Serbia are in preparation and will soon, hopefully, find its realization.

Our mission is to create shared value both for our stakeholders and society in the countries and communities we are operating in.

Jelena Djelic