Business Strategies / Industry News

Kellogg Gets Acquisitive in Africa

By Dave Fusaro, Editor in Chief

Oct 06, 2015

Kellogg Co. on Sept. 28 announced it acquired Egypt's leading cereal company, Mass Food Group. Two weeks earlier, Kellogg unveiled a partnership, including some investment, with Tolaram Africa. Both deals advance the Battle Creek, Mich., company's emerging market growth strategy.

"As the number one cereal company in Egypt, Mass Food Group is an excellent strategic fit for Kellogg," said Chris Hood, president of Kellogg Europe. "The combination of Mass Food Group's manufacturing capabilities, established local brands, and sales and distribution infrastructure, coupled with Kellogg's product innovation, international sales knowledge, iconic brands and marketing expertise, will help unlock the growth potential of the cereal category in the key markets of Egypt and North Africa."

Kellogg will pay approximately $50 million for the company, which has annual sales of $18 million. Founded in 1996, Mass Food Group is a family-owned business headquartered in Cairo, which claims to have been the first company to introduce breakfast cereal to Egyptian consumers. The company makes such popular local brands as Temmy's cereals and NutriFit cereal bars. Mass Food Group also exports foods to more than 30 markets, including Europe, East Asia and Africa.

Two weeks earlier, Kellogg inked a partnership with Tolaram Africa that includes the acquisition of 50 percent of Multipro, a premier sales and distribution company in Nigeria and Ghana. Kellogg will pay $450 million for the half-ownership of Multipro and the option to purchase a stake in Tolaram Africa Foods. Total sales are expected to be approximately $750 million in 2015.

The deal will increase Kellogg's presence in the growing African market and calls for joint development of snacks and breakfast foods for the West African market. The right to acquire a stake in Tolaram Africa Foods would also give Kellogg a piece of manufacturer Dufil Prima, which is 49 percent owned by Tolaram. Dufil Prima manufactures and markets several leading food brands, including Indomie noodles, which are often consumed at breakfast, as well as Minimie snacks, Power oil and Power pasta.

"As a region that is experiencing explosive growth, with a population of almost one billion people and an economy that is expected to more than double over the next 10 years, Sub-Saharan Africa provides tremendous opportunity for our company," said John Bryant, Kellogg chairman and CEO.