Focus on excellence

The Markel Bakery Group now comprises three major players in the global baking industry – the Tromp Group, based in The Netherlands, being the latest addition.We asked CEO Ken Newsome about the group and its future plans. The group comprises AMF Bakery Systems, Reading Bakery Systems and the Tromp Group. It has offices in the United States, Canada, the United Kingdom, the Netherlands, Mexico, the United Arab Emirates, Singapore, and China.

With the recent acquisition of the Tromp Group, Markel now covers just about all aspects of the bakery sector. What is the group’s medium to long term vision in terms of international growth and further expansion?
Our focus at this point is more about excellence than it is about size. We have the ability to leverage our relationships around the globe in a way that was not previously possible. As we seamlessly combine technologies we are able to create complete solutions for our customers including specialized products, such as pretzel buns. Once we have achieved total excellence then we will consider further expansion.

Is the Tromp purchase seen as a way to increase market penetration in Europe as a whole?
The Tromp Group deal was based on two premises. First, we saw that Tromp Group had the best technology in the industry, however with very limited sales coverage. With our offices in Latin America, United Kingdom, Dubai, Singapore, Tianjin, Canada and the newly opened Tromp Group Americas, LLC office in Richmond, VA, we have greatly expanded their sales coverage. However, the other intention of this acquisition was to bring sheeting technology to industrial bakers through existing AMF relationships. The customer demands on larger bakers are pressing them to explore new technologies for increased product flexibility. We determined that purchasing a great company was much better than starting with a group of engineers to develop the technology internally.

Is the Markel Bakery Group take-over seen as a way to further strengthen the Tromp Group’s market share?
Yes. Aside from the global infrastructure, we bring Markel’s values and balance sheet to Tromp Group. They have historically been perceived as a small, family owned business. They now are part of the largest and most financially secure company in the industry.

Given that the group now covers baking from pan bread and snacks through to waffles and biscuits (cookies), is there another sector in which the group would like to be represented?
At this point, we want to focus on being the premier partner to all of our customers by sharing our technologies.

Looking at the group’s diverse interests, has there been any duplication of resources now that there are three subsidiary companies? For instance, both Reading and Van Der Pol are major players in the biscuit sector, does this strengthen the group’s share and will it lead to further growth in this sector?
It does. For instance, Reading does not have a depositor for their lines. Tromp brings this technology to their offering.

Moving to the wider market place, what does Markel Bakery Group see as future drivers of the global baking industry in terms of emerging trends, healthier eating etc?
We use the term ‘Convergence’. This speaks to the way customers are demanding greater and greater variety, which in turn puts pressure on bakers to innovate more quickly. As I mentioned earlier, it is about using pretzel processes on buns or making specialty buns on a traditional fast food bun line. Healthier foods of greater variety is what is driving the industry therefore our strategy.

Given the global economic situation, is the bakery industry adapting enough to meet changing conditions and what is the Markel viewpoint for industrial baking’s future?
This may seem pretty simplistic but bread has been around for thousands of years. Economies may go up and down but people will need to eat. There is an explosion of the global middle class. As people have more disposable income, history says they want better and more interesting foods. We are fortunate to have a range of technologies, a global reach, and a partner in Markel that is extraordinarily secure financially.

Given the Markel Bakery Group acquisitions, does the company see further ‘mergers’ and ‘take overs’ involving other companies globally?
Consolidation of suppliers typically follows consolidation of customers. There has been a significant change in the ownership of bakeries over the past decade. This will make it more difficult for many of the smaller niche players.

What regions of the world does Markel Bakery Group see as being growth areas in the future and what area markets could decline?
We see the largest growth in Asia Pacific, the Middle East, Africa, and Latin America. While the more traditional markets in the US and Europe may be more flat in aggregate, we are excited at how our unique offering can help us grow in these markets as well.