Ferrero expands its global confectionery business in SA

Ferrero, the 4th largest global confectionery business with a turnover in excess of 7 billion Euros from its famous international brands, Ferrero Rocher, Tic-Tac, Kinder and Nutella, has expanded its operations in South Africa. Job creation, local manufacture and the development of raw materials are just some of the spin-offs of their long-term commitment to grow their South African interests.

Whilst their products have been in the country for many years, Ferrero is now firmly established as a South African business enterprise with Ferrero Ithemba SA operating from its new head offices in Sandton. The name, Ithemba, is derived from the Zulu word, meaning “hope”. A new 9 000 square metre confectionery factory is due for completion in Walkerville, south of Johannesburg by April, 2009. Ferrero is also currently exploring five trial sites for hazelnut cultivation that could in time, position South Africa as a major supplier of this key raw material used in practically all Ferrero products.

Ferrero Ithemba SA, with Managing Director Nick Terry at the helm, is set on developing and maintaining key sectors in the local confectionery industry while strengthening their position as leaders in the premium confectionery category.

“Our vision is to build on the good name of Ferrero within South Africa and create a company that is an integral part of the South African society. We see a future where our brands are recognised and loved by those who consume them and our company is identified as a significant contributor to the economy within our category,” says MD Nick Terry who is intent on creating a work environment built on the principles established by the Ferrero family that have stood them in good stead over the past 60 years.

Terry who has considerable experience in the confectionery and food industry having worked for some of South Africa’s leading companies including Tiger Brands, Coca Cola SA and Kraft Foods before joining Ferrero in 2008, was recently elected Chairman of the newly formed South African Confectionery Association (SACA).

A wholly family owned business headed by Chief Executive Officers Pietro and Giovanni Ferrero and owned by their father Michele, the Ferrero Group currently has 36 operating companies, 15 factories and approximately 19,600 employees worldwide. Michele Ferrero visited South Africa in 2001 and admired the beauty and opportunity of the country. He sees enormous potential and considers South Africa a strategic market within the Group.

The Ferrero principles of quality, innovation and technology supported by a deep rooted social conscience, have been instilled into the growing operations in South Africa with sites firmly set on other African markets in the future.

The new factory in Walkerville, just 15 kilometres outside Johannesburg, built to meet the anticipated increase in demand for Ferrero products within the region, has the capacity to employ over 200 people in the production and packaging of Kinder Joy and Tic Tac. The Ferrero Group is also on the cutting edge of confectionery innovation with 80% of all factory machinery and technologies developed internally to ensure the highest standards of quality and freshness.

Throughout the world, Ferrero factories can be found in rural areas away from major industrial sites and South Africa is no exception. The Ferrero family always establish their plants in close proximity to The Salesians of Don Bosco, a Roman Catholic order founded in the late nineteenth century by Saint John Bosco in an attempt, through works of charity, to care for the young and poor children of the industrial revolution.

The Ferrero Group has adopted this social investment stance because the missions are often in the countryside where jobs are scarce thereby providing much needed local employment. Establishing their factories away from high density industrial areas also underlines the Ferrero commitment towards long-term sustainable development with minimal impact on the environment. Further more, the fresher and cleaner environment outside of city centres has been found to be beneficial in the production of their ultra-premium confectionery.

On the agricultural side, Agrisudafrica, a dedicated company set up under the full control of Ferrero Trading, controls the importation and cultivation of some 450,000 hazelnut plants from Chile and Argentina into South Africa. The company is busy acquiring suitable land for the cultivation of these trees while nurseries in five trial sites around the country are propagating further agricultural development. Local investors and communities devoted to the cultivation of these trees stand to gain from Ferrero’s international buy-back contracts while future emphasis is focused on local industrial development in the processing of the crop once yields become viable after approximately five years.

The Ferrero family have forged close ties with the South African Department of Agriculture and hosted the Minister, Lulu Xingwana, at their factory in Alba, Italy in 2008. During her meeting with Ferrero company directors, she confirmed the support of the South African government to help accelerate and ease the implementation of these major agricultural investments.

With a formula for success, that has proven itself throughout the world and exciting prospects for the local confectionery market, the Ferrero expansion in South Africa brings new potential for organic growth and social investment.