Del Monte Pacific

[d.o.g.]

Cerebos and Del Monte are worlds apart. Del Monte although has a strongh consumer brand do not own the brand. many, many years ago they have given the distribution and the branding to a japanese company(sorry temporary lapse and cannot remember which). To buy back the rights they have to pay hundred of millions. also DM is in plantation ie pineapples etc and every few years they were hit with the El Nino weather, at least this was the excuse given for poor performance.

The Del Monte history is quite complicated.

Once upon a time there was a consumer food company called Del Monte with worldwide operations. In 1979 it became part of RJR. When RJR got bought by KKR, Del Monte was included. The Del Monte brand was chopped up and sold off to different companies around the world.

In Asia, the brand was chopped into 2 parts. One part consisted of Philippines and India, and was assigned to the company that actually owned the pineapple plantations. That company is today known as Del Monte Pacific and is listed on SGX.

The other part in Asia (which includes Southeast Asia and China) was sold to Kikkoman.

In Europe the Del Monte name was sold to a company called Cirio which has since gone bust. The owner for Europe and subsaharan Africa is now Del Monte Fresh.

In US the brandowner is Fresh Del Monte Produce.

Thus, depending on where you bought your Del Monte products, your money is going to a different company. Because Del Monte Pacific doesn't own the name outside of the Philippines and India, they bought the S&W brand (excluding the Americas, Australia and New Zealand) in order to be able to legally "invade" other territories. So when you buy S&W produce in Singapore, your money goes to Del Monte Pacific. When you buy Del Monte produce in Singapore, your money goes to Kikkoman.

Most consumer foods companies do not produce their food products - they contract with growers and canners. Like the way Apple buys chips from Samsung and has Foxconn build the iPhones.

Del Monte Pacific was historically the pineapple grower for the rest of the Del Monte empire. As a result they are stuck with crappy supply contracts with the other Del Monte owners which are taking years to unwind and renegotiate. Eventually they should be able to earn a decent return on capital. But they are fundamentally a plantation company with the usual risks of weather, disease, pests etc. They do have the branded consumer products, but volumes and revenues are dwarfed by the plantation business.

[dzwm87]

If I recall correctly, sometime late last year, Del Monte Pacific has already broke away from their contract with the European counterparts.

They are probably in the midst of ending the contract with the American counterparts now.

[hongonn]

Haha d.o.g,

I never get to know so much about Del Monte until you tell the story. No wonder every times i go to supermarket i was puzzled how come the S&W cans labeling is so much look alike to the Del Monte, for the label design and color. Now i think they purposely trying to confuse the consumers Should have charged for copyright infringement.

After this Europe and America contracts expired, does it mean they now can negotiate better price and profit will be better coming years?

I used to think pineapple is lucrative business because look at Lee Rubbers also doing pineapple, they were earning good money and the welfare is so good the staff never want to leave the company.

[cif5000]

Once upon a time there was a consumer food company called Del Monte with worldwide operations. In 1979 it became part of RJR. When RJR got bought by KKR, Del Monte was included. The Del Monte brand was chopped up and sold off to different companies around the world.

Except for the Philippines, the Del Monte trademark is owned by Del Monte Corporation which operates the business name Del Monte Foods. What RJR chopped up and sold were the businesses that continue to use the Del Monte trademark. However, these businesses were granted only the use but not the ownership. Eventually RJR also sold the trademark owner.

Del Monte Foods then got listed on the NYSE in 1999 and last year it was delisted following a takeover led by KKR.

In Asia, the brand was chopped into 2 parts. One part consisted of Philippines and India, and was assigned to the company that actually owned the pineapple plantations. That company is today known as Del Monte Pacific and is listed on SGX.

The other part in Asia (which includes Southeast Asia and China) was sold to Kikkoman.

In Europe the Del Monte name was sold to a company called Cirio which has since gone bust. The owner for Europe and subsaharan Africa is now Del Monte Fresh.

In US the brandowner is Fresh Del Monte Produce.

DMPL owns the trademark for the Philippines and has the rights to use it in India. Being the owner, they added numerous "brand extention" such as Del Monte Chilli, which you don't see them outside Philippines.

I didn't check the African trademark owner but I believe it should also be Del Monte Corporation. I did check on the USA, Singapore and India ones.

So when you buy S&W produce in Singapore, your money goes to Del Monte Pacific. When you buy Del Monte produce in Singapore, your money goes to Kikkoman.

Supply agreement with Kikkoman was terminated effective 30 June 2008. With this termination, I wonder if Kikkoman is still getting its supplies from DMPL.

But they are fundamentally a plantation company with the usual risks of weather, disease, pests etc. They do have the branded consumer products, but volumes and revenues are dwarfed by the plantation business.

From 2005 to 2011, pineapple output increased by only 14% while revenue almost doubled. Depending how you see it, it could be half-filled or half-empty.

[KopiKat]

Once upon a time there was a consumer food company called Del Monte with worldwide operations. In 1979 it became part of RJR. When RJR got bought by KKR, Del Monte was included. The Del Monte brand was chopped up and sold off to different companies around the world.

Except for the Philippines, the Del Monte trademark is owned by Del Monte Corporation which operates the business name Del Monte Foods. What RJR chopped up and sold were the businesses that continue to use the Del Monte trademark. However, these businesses were granted only the use but not the ownership. Eventually RJR also sold the trademark owner.

Del Monte Foods then got listed on the NYSE in 1999 and last year it was delisted following a takeover led by KKR.

In Asia, the brand was chopped into 2 parts. One part consisted of Philippines and India, and was assigned to the company that actually owned the pineapple plantations. That company is today known as Del Monte Pacific and is listed on SGX.

The other part in Asia (which includes Southeast Asia and China) was sold to Kikkoman.

In Europe the Del Monte name was sold to a company called Cirio which has since gone bust. The owner for Europe and subsaharan Africa is now Del Monte Fresh.

In US the brandowner is Fresh Del Monte Produce.

DMPL owns the trademark for the Philippines and has the rights to use it in India. Being the owner, they added numerous "brand extention" such as Del Monte Chilli, which you don't see them outside Philippines.

I didn't check the African trademark owner but I believe it should also be Del Monte Corporation. I did check on the USA, Singapore and India ones.

Extracts from their Corporate Profile,

The Del Monte Pacific (DMPL) Group is a group of companies that caters to today’s consumer needs for premium quality, healthy food and beverage products. It innovates, produces, markets and distributes its products worldwide.

The DMPL Group owns the Del Monte brand in the Philippines where it enjoys leading market shares for canned pineapple juice and juice drinks, canned pineapple and tropical mixed fruits, tomato sauce, spaghetti sauce and tomato ketchup.

The Del Monte Pacific Group also owns another premium brand, S&W, globally except the Americas, Australia and New Zealand. As with Del Monte, S&W originated in the USA in the 1890s as a producer and marketer of premium quality processed fruit and vegetable products.

In India, the DMPL Group owns approximately 46% of FieldFresh Foods Private Limited. FieldFresh markets Del Monte-branded processed products in the domestic market and Fieldfresh-branded fresh fruits and vegetables. Del Monte Pacific’s partner in Fieldfresh Foods is the well-respected Bharti Enterprises, which owns one of the largest conglomerates in India.

Del Monte Pacific holds the exclusive rights to produce and distribute processed food and beverage products under the Del Monte brand in the Indian subcontinent.

With its 23,000-hectare pineapple plantation in the Philippines, 700,000-ton processing capacity and a port beside the Cannery, Del Monte Pacific's subsidiary, Del Monte Philippines, operates the world’s largest fully-integrated pineapple operation. It is proud of its long heritage of 85 years of pineapple growing and processing. It has long-term supply agreements with some of the Del Monte trademark owners and licensees around the world.


Extracts from the same website on other non-affilated Del Monte cos.,

Del Monte Pacific Limited has the rights to the Del Monte trademark for the Philippines and for the Indian subcontinent territories for processed products. The Company has long-term supply contracts with some of the Del Monte trademark owners to supply them with their processed or fresh pineapple requirements. Del Monte Pacific is NOT affiliated with these companies:

- Del Monte Asia / Kikkoman, a company which markets processed food products under the Del Monte® brand in Asia Pacific (excluding the Philippines and the Indian subcontinent);

- Del Monte Foods, which markets processed food products under the Del Monte® brand in the United States and South America;

- Del Monte Canada, which markets processed food products under the Del Monte® brand in Canada;

- Del Monte Panamerican, which markets processed food products under the Del Monte® brand in Central America and the Caribbean;
Conagra/Productos Del Monte, which markets processed food products under the Del Monte® brand in Mexico;

- PVF Operating Co., which markets dried fruits and nuts under the Del Monte® brand in North America and Central America; and

- Fresh Del Monte, which markets fresh fruits, fresh vegetables and fresh produce under the Del Monte® brand throughout the world, and which markets processed food products under the Del Monte® brand in Europe, Middle East, Africa and the former Soviet Union.


Extracts from AR2011 (Pg 3),

Exports of processed products were a key driver of revenue expansion, growing 25% on the back of better prices and sales mix, and greater volume. Selling prices and margins in Europe improved as the Group sold directly into that market following the termination in mid 2010 of an unprofitable supply contract. As we effectively transitioned the European business to one where we have better market visibility, Europe has now become a major contributor to Group profit.

We have continued working on the profitability of our international markets by dealing with legacy supply contracts that have unfavourable margins and terms. In November 2011, we served notice of termination of another major contract, our supply agreement with the USA. Given the three-year notice period, the termination will become effective in November 2014.

On pg 103,

Supply contracts
The Group currently has international supply contracts with entities, which have exclusive rights to the Del Monte trademarks in
their respective territories or product categories. The Group has such agreements in respect of processed foods with Del Monte
Corporation (three-year notice of termination was served by the Group in November 2011) in North America (except Canada),
Mexico and the Caribbean, and Del Monte Asia Pte Ltd in certain Asia Pacific countries (excluding the Philippines, the Indian
subcontinent, Myanmar and Japan). The Group also has a supply contract for fresh pineapples with Del Monte Fresh Produce
International Inc. which will expire on 31 December 2017. These supply contracts are generally terminable by prior written notice
with periods ranging between 18 to 36 months (from certain pre-agreed dates onwards).

[cif5000]

We may want to pay attention to Lee Pineapple because it is present in the top 20 shareholder list of both Del Monte and Cerebos. Not only that, it has been increasing its stake in both companies over the years.

Moderator might want to splice the discussion thread.

[cif5000]

This counter made a 11+% gain yesterday. It has gained ~75% since the Cerebos privatization offer, which is roughly within a mere 4-5 months. So it seems like debt-rich companies can also offer good returns. The price is still inching up today. Surely the bonus issue won't get shot down this time. A record profit is also expected when the company announce the FY12 results next month. Dividend surely. Congratulations!

[CityFarmer]

This counter made a 11+% gain yesterday. It has gained ~75% since the Cerebos privatization offer, which is roughly within a mere 4-5 months. So it seems like debt-rich companies can also offer good returns. The price is still inching up today. Surely the bonus issue won't get shot down this time. A record profit is also expected when the company announce the FY12 results next month. Dividend surely. Congratulations!

There was an announcement around Aug 2012 on bonus issue, but later canceled due to amended 838 rule requirement.

The current price already priced-in the bonus issue, with anticipation that the bonus issue will resume in near future, rather a re-rating due to Cerebos privatization IMO

What do you think?

[CityFarmer]

Pick up this counter recently but not able to accumulate enough.

I assume the price hike is due to recent announcement of product launched in Myanmar.

(vested)

[CityFarmer]

Halted.

http://info.sgx.com/webcorannc.nsf/Annou...endocument

I believe it is pending for announcement of bonus issue.

The share hiked mainly due to the expectation of bonus share and the perceived "Myanmar play". The annoying "Myanmar play" has slowed down my accumulation without much help in its value.

(vested)