Case Study: Senoble
Senoble, the leading French dairy group, purchased a factory in Slovakia from rival French dairy company Bongrain in 2005. This was made possible by a capital injection from 3i – secured a year previously – to fund an investment programme and acquisitions in Central and Eastern Europe.
The Slovakian acquisition is a clear indication of how well the partnership is working. Indeed, 3i’s contacts have already helped Senoble identify a dozen potential targets throughout the CEE. It is also a good example of near-shoring, as it will support Senoble’s expansion into Germany – where it has recently acquired the Weight Watchers
licence – and form the nucleus of potential growth within the Central European region.
“This market is expanding,” says Olivier Le Gall, investment director, 3i France, “and our contacts across Europe have allowed us to quickly identify a dozen targets for acquisition. We're confident the management team can grow.”
3i’s understanding and approach allowed the deal to be completed in just four months, compared to a typical time frame of nine to 18 months. “3i showed real motivation to invest, an excellent knowledge of the sector and retail brands, plus a Europe-wide contact network,” says CEO Marc Senoble. “Several investors expressed an interest,
but not only was 3i the most proactive candidate, it was able to fit in with the family dimension of the group.”
The new plant has highly efficient production facilities, is fully compliant with the new ISO 22000 quality standard and has access to excellent raw material inputs from local dairy producers. Over time, Senoble will expand its product portfolio within Slovakia and the adjacent markets, giving the company a new opportunity for growth. The plant is ideally situated, being two hours’ drive from Budapest, Bratislava and Vienna, three hours from Krakow and four hours from Prague.
However, as Olivier Besset, international marketing and commercial director of Senoble, notes, the low levels of disposable income are a challenge. At present, Central European shops carry a broader range of very cheap products, alongside premium items that few people can afford. “There will be space to develop non-standard products that will grow more quickly as purchasing power increases,” he says. Besset also points out that there is huge scope to develop the private label market in the region, which is very under-developed.