Spanish food giant Grupo SOS, the world’s leader in olive oil sales, this month unveiled its corporate image under the new business name of Deoleo.
A name change was one of the conditions of the sale – ratified this month – of its rice division to Ebro Foods for 205 million euros ($290m). The conglomerate now plans to focus on olive oil and hopes its new name will transmit the “values and culture” of that sector.
The group’s former umbrella name SOS (pronounced “sohs”) had its origins in the century-old Spanish rice brand of the same name. Deoleo – which could be translated as of, or from, oil – is intended to reflect its new focus. The name was selected ahead of four other proposals because it was considered pleasant-sounding, easy to pronounce in any country and close to olive oil’s latin roots.
Deoleo will encompass all types of food products but concentrate on the Mediterranean diet and olive oil in particular. It already owns major olive oil brands including world-leaders Carbonell (recently launched in Poland and Thailand) and Bertolli (recently launched in Poland and the Ukraine), and also Carapelli, Koipe and Sasso.
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According to Allbusiness.com, the group has a long-term plan to boost olive production through investment in new growing regions outside of Europe and is “well positioned to take advantage of growth in global olive oil consumption in line with increased health awareness.”
The sale of the rice unit should put the company on a stronger financial footing but it still retains high debt (down from a billion to 887 million euros, in March, after a refinancing last year). Allbusiness also says that last year’s “director share scandal has damaged investor confidence”, that the group is “seen as a possible acquisition target” by firms in a stronger financial position and “operates in sectors threatened by rising popularity of private-label products.”
The name change marks one of the first major decisions taken by Jaime Carbó, Ebro’s ex-managing director, since he became director general in January and comes after the group achieved its first quarterly profit in three years with a net income of 8.14 million euros for the first quarter of this year.
SOS has reduced its workforce by 47 percent in the last two years, down to 1531 employees and more cost-cutting is to follow.
SOS president Mariano Pérez Claver told shareholders at a meeting earlier this month that the group’s current focus was growth in its olive oil business. “The company has survived a traumatic process of financial stabilization that has obliged us to re-inject capital, simplify our organizational structure and divest one of our activities, namely that of rice, which in another situation we would have maintained,” he said.
Meanwhile, according to Spanish newspaper Cinco Días, Ebro Foods, which already has a 9.33 percent holding in Deoleo and two boardroom seats, is awaiting details of Deoleo’s new business plan with a view to considering a merger with it. Ebro Foods also remains keen to gain a foothold in Australia or Asia after its 610 million AUD ($640m) bid to buy Australia’s SunRice group was thwarted by growers at the last minute last month.