Yildiz-United Biscuits: A marriage made in the kitchen

ANKARA

"Murat Ulker really loves food,” Martin Glenn, CEO of United Biscuits, said Friday.

That shared vision of good things in the kitchen is what will make the tie-up between the two companies a success, Glenn told The Anadolu Agency in an interview.

Since Turkey’s Yildiz Holding announced on Nov. 3 that it was acquiring U.K.-based United Biscuits for $3 billion, analysts have noted many synergies that the two companies can make use of, in what will now be the third-largest biscuit maker in the world.

But Glenn says it's not only about M&A strategy. It's about cooking up tasty products.

"The first thing that Ulker talks about is that he wants to understand how things are made. He is really interested in details. If you have a food business you have to start with it. It’s not about the balance sheet and so on, it’s about the product you make. He really understood our business; he went to all of our factories to see how it’s done. Nobody else went in to that level of detail," Glenn said.

"This is why Yildiz will be a perfect partner to drive our growth. We both share global ambitions," Glenn pointed out. 

Ulker clearly has ambition and a kind of genius for product. He started his company in 1944 with the manufacture of the first Ülker brand Potibor biscuits. These first biscuits produced in Eminönü’s Nohutçu Han factory by Sabri Ulker, his brother Asim and three other colleagues, were the first products ever produced in the history of the organization. The biscuit that was first manufactured, Potibor, is still the biscuit which is best-loved by consumers. Ulker built the company up from there into a multi-national.

"We have great ambition for this business. We considered a number of big industrial companies in the food industry as partners, and, since United Biscuits is an attractive partner, we had some big companies interested." But nothing clicked for the U.K. company until they talked to Murat Ulker, whose product-based approach Glenn shared.

With the vision for the kitchen, the two men also share a vision in the boardroom. "All the areas in which Ulker has ambitions, we do too. We could see lots of joint opportunities to develop the biscuit market around the world. We share a single point of view for culture, industrial synergies and growth."

 According to Gleen, the heart of the business is the U.K., where 65 percent of the the company’s sales come from. But United Biscuits is particularly strong in Africa, India, and the company has new business in China.

 “The U.K. is an important and growing business. We still have room to grow on that market. We have three companies in Western Europe; France, Belgium and Holland. They make up 15 percent of out total business. We have a plant in India, China is new, we have only been in China for couple of years, but the plan is to put manufacturing there. When you get to a certain scale that's when you invest in manufacturing.”

The tie-up with Yildiz will fill in gaps in United Biscuit's global marketing strategy. Yildiz Holding, with revenues of 12.4 billion Turkish lira ($5.5 billion) in 2012, has 60 factories, employs a workforce of 41,000 and produces a broad range of products including biscuits, chocolate, edible oil, dairy products, culinary products, baby food and packaging materials.

Glenn also pointed out that the biscuit market is really attractive. "It’s growing 4 percent to 5 percent all over the world. Everybody eats biscuits. And the good news is that it’s a fragmented market, so we can take market share together. Our ambition is to create the biggest biscuits market in the world, to move in where the American multi national companies are not present." 

But, again, it's not really about global market strategy. "It's by trying to be the best, that you become the biggest," Glenn insists. 

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