Fast-moving consumer goods (FMCG)
Industry’s key highlights
FMCG market and retail (retail chains) are characterized by dynamic actions (entry into the market, market expansion and exit from the market) and there are mergers and acquisitions strategies, privatization, greenfield projects, both with existing market players and new ones. Food and non-food retail sectors (especially the modern retail chains) are the most activity business.
The growth of retail turnover (the average growth rate for the period 2010-2017 amounted to 7.7%) in the early stages of the development of the industry allowed modern retail significantly has increased its presence and change the market structure.
Such retail chains as Euroopt has grown from 10 stores to more than 400 ones in the country; Hippo has grown significantly by acquiring a private retailer; Vitalyur at the beginning of its development was a wholesale company with 2-3 retail stores and it has grown to a large retailer with 50 stores.
In this industry, the main and rising problems are competition with the current market leaders - as a rule, who import goods from well-known foreign manufacturers. Competition becomes more and more efficient in FMCG market, when the benefits of innovation are rapidly depreciating, but regular investment in products, marketing and communications becomes a necessity. Today, retail and wholesale trade is represented by private sector of various sizes (in 2017, private companies had 62% share, the share of foreign companies exceeded 20%, although 8 years ago this share did not exceed 5%).
Food production is actively developing in the country due to the availability of local resources and technologies. The volume of food and beverage production in 2017 exceeded USD 12 bn (+16% in comparison with the previous year).
Investment in the industry
During last 3 years, the volume of foreign direct investment on a net basis in retail industry has amounted to USD 480 mn, in production of food and beverages industry - USD 190 mn.
Retailers creates a new infrastructure (they build stores, shopping centers etc.); wholesalers develop their transport park, logistics and storage infrastructure. These are the main directions of investment in retail. Companies engaged in the production of food and beverages direct their investments into the modernization of production, the development of raw materials base etc. Over the past 5 years, the volume of investments in fixed assets in retail and wholesale has exceeded USD 4 bn, in the production of food and beverages - more than USD 3.5 bn.
UNITER’s competence in the industry
Uniter has experience in implementing projects in FMCG sector from the beginning stages of strategic development in the form of preparing business plans and financial models to implementing mergers and acquisitions (M&A) transactions.
UNITER Investment Company has participated in projects related to food and non-food retail, distribution: raising funds (European Bank for Reconstruction and Development) for the development of the network of the largest distributor (Chisty Bereg) of sanitary products and fittings in the amount of EUR 5 mn; support of the sale of a non-food retailer (electrical household appliances); preparation of a comprehensive analysis and feasibility study of the creation a new business (modern retail format) for the existing private group of companies; financial advisory and making of a retail network development strategy in Russia, Ukraine for Milavitsa CJSC.
The company applies its experience and knowledge to financial and investment advisory: transaction support of acquiring of CJSC Lidskoye Beer share (it’s the 4th largest beer producer in Belarus) for the Finnish company OLVI; fund raising, restructuring and support of the M&A transaction of a large snacks and chips manufacturer; preparing feasibility study and fund raising support for the creation of bottled water plant in Minsk region for a private investor.
DisclaimerThese industry outlooks were prepared for informational purpose only and does not constitute an offer or solicitation of a strategic transaction. Points of view, forecasts and evaluations presented in these outlooks reflect our opinion as of the publication date and may be changed without notice. Although the information contained herein has been obtained from sources we believe to be reliable and although we ensured their accuracy as of the publication date, we cannot guarantee, expressly or impliedly, practicality of these outlooks regarding future events or current or future value evaluation. Any investment decision based on these outlooks should be made only at the discretion of the investor and UNITER or its employees or any third party shall not be responsible in any form and in no circumstances for any action of any party taken on the basis of these outlooks. Nor UNITER, nor any of its employees, nor any third party shall be responsible for losses that result from such actions.
Financial modeling for restructuring the credit debt of Gomelhlebprom OJSC (EBRD pilot project).
Restructuring of stressed debts (about $ 30 million) of a state enterprise - OJSC “Gomelkhlebprom”, with the support of EBRD.
Attracting funding from the European Bank for Reconstruction and Development for sustainable development of the private company “Chisty Bereh” (investment amount – EUR 5 mn).
Assistance in the process of debt restructuring and attracting foreign investment in one of the largest unfinished commercial real estate projects with worth more than USD100 mn in Belarus for BPS-Sberbank.