Ferrero

Background information

pa_ferrero

Differently from several other Italian companies part of the FAD (food, design and fashion) trio, it will never end up into foreign hands neither it will go public. That is, at least, the policy that the Ferrero family repeatedly dictated for the company named after its name. Ferrero is in fact among the shrinking group of big made in Italy brands that are resisting globalization, as far as ownership is concerned. The sweets producer, still led by patriarch Michele Ferrero, boast 7.8 billion sales worldwide, with 25,000 employees and 11 thousand tones of yearly production. Ferrero did never even consider an Ipo and has always grown organically, as it always refused to take over its competitors, even when some very bargains were within reach.

The Alba, Piedmont based chocolate-maker story is just unique. It was founded upon the extraordinary creativity of its founder Michele, who every Wednesday gets together with his closest aides for the taste-proof of the newest products to be marketed. The soundness of its financial structure and a social approach with employees which dates back to the Sixties when Ferrero introduced a transportation service devoted to collect his workforce scattered around the small uphill villages around Alba, are also part of Ferrero success model. When his employees happened to get married a personal gift was granted from the boss, who also personally followed possible troubles in their families. The company never experienced a single hour of walkout nor a single temporary layoff.  All this was behind the strength of its brand products: Nutella, Ferrero Rocher, Kinder, Estathé, Tic-Tac, just to mention a few. Mr. Ferrero, it was told, frequently asks his employees: «whom are you working for?». And as they answered «for you» he promptly replies: «Not really, you are working for all those who buy our products, just as I do». In other words, a company capable of investing in its very customers.

All that said, Ferrero is a great Italian brand which has its financial holding company based in Luxemburg. Nothing suggests that the aim of it was that of paying lower taxes, as its tax rate averaged 27.8% per year according to its financial statements, while only one third of its revenues are from Italy.

 

2 thoughts on “Ferrero

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  2. Rumors give Ferrero the occasion to state again: not for sale

    In October 2013 Ferrero re-state it will not end up into foreign ends. Italy’s best selling daily La Repubblica provided the occasion for the statement as it reported that the Italian maker of Nutella chocolate spread had received an offer from Swiss food group Nestle, a report promptly denied by a spokesperson for the Piedmont-based group: “Ferrero is not for sale in the most categorical and absolute manner.” La Repubblica said that in the headquarters of several leading national banks had been talking for days about the Nestle proposal targeting the Piedmont-based group that bank sources say is worth some 10 billion euros, which was at an embryonic stage though. Industry sources told Reuters that Nestle was indeed interested in buying Ferrero while some investment bankers said there was talk in banking circles of a possible tie-up between the two given their complementary businesses. But other banking sources said they had not heard of an approach and said Ferrero, run by 88-year-old patriarch Michele, had no plans to give up control. The company is cash-rich and not in need of financing, while investment bankers consider Ferrero one of Italy’s most valuable companies and say competitors such as candy maker Mars Inc and Mondelez would also be interested if it were for sale. Investment bank Banca IMI, which La Repubblica said may be informally looking into the possible deal, denied any involvement as well and said it had no knowledge of any proposal involving Nestle and Ferrero while Nestle itself said it did not comment on market rumors.

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