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KiMs and OLW join forces
SSC will be a leading snacks company in the Nordic region. With Chips Abp’s Finnish and Baltic snacks operations it will have the resources needed for further expansion outside this region.
“We have entered into this agreement because we believe that it is the right move to make within the context of the industry, and because we believe that both parties stand to gain from it. The most important advantage of the agreement is that it gives us Nordic market coverage. It will in addition generate purchasing and product development synergies and reduce the need for new production investments,” explains Managing Director Finn Jebsen, head of Orkla’s branded consumer goods area.
The board of directors of SSC will comprise five members, three of whom will be appointed by Chips Abp and two by Orkla. Up until 2002, SSC will be headed by Sture Carlson, Managing Director of Chips Abp, who will act as executive chairman of the board.
The new company will be Finnish, and its formal headquarters will be located in Åland. The agreement is subject to approval by the Norwegian Ministry of Trade.
Orkla will continue to own its 19.8 per cent of the shares of Chips Abp.
For further information, please contact:
John Jørgensen, Managing Director, Orkla Brands, Tel.: +47 22 89 50 00
Jørn Tolstrup Rohde, Managing Director, KiMs, Tel.: +45 63 89 12 12
Ole Kristian Lunde, Orkla Corporate Communications, Tel.: +47 22 54 44 31
Facts and background information
Strategic background
The snacks market in all the Nordic countries is highly competitive. In the past few years, several major international manufacturers have launched snack products in the Nordic region. Furthermore, large retail chains in the region, particularly grocery chains, are collaborating increasingly closely across national borders. This has increased the need to offer retailers Nordic solutions and cooperation agreements.
Scandinavian Snack Company (SSC) will be a leading Nordic supplier of snack products with strong local brands. KiMs is a clear market leader in Denmark and second largest company on the Norwegian market with the KiMs and Polly brands. OLW is second largest in Sweden and sells CheezDoodles in Norway. The forming of SSC will further strengthen the market positions of these brands in the various countries and offer opportunities for increased investment outside the Nordic region in cooperation with Chips Abp.
The main challenge in all the Nordic countries is to maintain the strong growth that has taken place in snacks consumption in recent years. While this growth is ascribable to several factors, one of the main reasons is the strong focus on developing new flavours and types of product. Establishing SSC will open up possibilities for increased investments and more efficient product development. It will also lead to better purchasing terms, fewer and more cost-effective production investments and other advantages.
Organisation and management
Nordic Snack Holding (SSC) will formally be a Finnish company headquartered in Åland. However, the three companies will continue to be managed and operated locally as at present. Sture Carlsson, Managing Director of Chips Abp, will serve as executive chairman of the board until 2002. The other members of the Group management will be Stefan Sjøstrand, Managing Director of OLW Sweden, Jørn Tolstrup Rohde, Managing Director of KiMs (Denmark and Norway) and Hans Petter Olaussen, Director of Finance at KiMs.
The board of directors will consist of five shareholder-elected representatives (three of whom are to be appointed by Chips Abp and two by Orkla). The employees will be represented by one person from each of the three countries.
Other factors
Orkla’s snacks business in Norway is currently part of Sætre AS. This business will therefore be made a separate company, KiMs Norge AS, which will take over all the rights and obligations of Orkla’s snacks business in Norway. The new company will continue its close collaboration with Sætre AS. Among other things, KiMs Norway will continue to sell its products through Sætre’s sales network.
At present, OLW sells CheezDoodles in Norway through Ideal Wasa AS. This arrangement will continue until 2004, unless otherwise agreed between the parties.
Date: 28. sep 2000 Kl 08.09
