`Spanish Food Giant Grupo SOS Changes Name to Deoleo

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Spanish Food Giant Grupo SOS Changes Name to Deoleo

Jun. 27, 2011
Julie Butler

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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.

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