Strauss Group Ltd. (TASE:STEL) has started restructuring its domestic activities now that it has completed the merger with Elite and begun the consolidation of its international businesses. The company has launched its restructuring plan, called “Project Horizon”, which it predicts will boost operating profit on domestic sales by 2-3% over the next three years.
Strauss Group chairperson Ofra Strauss said, “The changes are designed to adapt the company to where we want to go. We want to be an international company with the goal of having most of our turnover outside Israel. This can be seen as part of a total process of change that we announced on the day of the merger between Strauss and Elite. In view of the noise about the merger and the focus we had to apply on the technical side of shares and so on, there was less time to talk about change.”
As “Globes” first reported, Strauss will consolidate six of its seven divisions in Israel into two units: Strauss Health and Wellness, which will handle fresh food, delicacies, and the Danone and Yotvata brands; and Strauss Fun and Indulgence, which will handle the Elite and Energy brands. Because PepsiCo Inc. (NYSE:PEP) owns 50% of Strauss’s snacks division, this division will not undergo restructuring.
Strauss CEO Erez Vigodman said that the company would concentrate on strengthening the Strauss, Elite, and Yotvata labels, and to transfer the independent activity of some brands under the Elite label. “We’ll invest the same amount of money, but in fewer labels. Over time, this will give us a larger market share in a profitable and growing way,” he said.
Published by Globes [online], Israel business news - www.globes.co.il - on June 26, 2007
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