Flip through the latest issue of Gulf Weekly.
Kraft Foods reported strong second quarter 2008 results, with global net revenue for the same period increasing by 21.4 per cent to $11.2 billion and operating income jumping by 27.1 per cent to $1.5 billion.
Continuing in previous trends, Kraft Foods' Middle East and Africa operations delivered double digit organic net revenue growth at 13.2 per cent, resulting in a combined organic net revenue growth of 17.1 per cent for developing markets.
Primary drivers for the region's overall positive outlook included successful brand and marketing investments, as well as favourable product mix and pricing that more than offset higher input costs.
"Our business continues to strengthen and performance is exceeding our expectations despite a challenging operating environment. Our investments in this region are driving stronger top line growth and we are now seeing that reflected in improved profitability.
"We expect our year-on-year results to improve further in the second half of 2008 as we continue to reinvest in our brands and reduce our costs," said Patrick Satamian, vice-president and area director, Kraft Foods, Middle East and Africa.
According to Satamian, Egypt and several of the company's emerging markets in the MEA region, experienced the highest volume of growth at more than 52 per cent, with powdered beverages, cheese, biscuits and confectionary leading this development throughout the region.
"The integration of the Danone portfolio, which was completed in Egypt, also impacted the company's overall strong performance.
"Our outlook for this region is positive, and we will continue to maintain this upward growth trend as we focus on our core categories.
"At present, our investments in this region include six manufacturing facilities that produce a variety of Kraft products, as well as contract manufacturing and license agreements in the UAE, Saudi Arabia, Egypt and South Africa," added Satamian.
In April, Kraft Foods opened its sixth manufacturing facility in the region. Located in Bahrain, the state-of the-art facility produces 60,000 metric tonnes of Kraft cheese and Tang products per annum specifically for this region.
In addition, the company also manufactures and markets a broad portfolio of iconic brands including Oscar Mayer meats, Philadelphia cream cheese, Maxwell House coffee, Nabisco cookies and crackers and its Oreo brand, Jacobs coffees, Toblerone and Milka chocolates and LU biscuits.
Kraft Foods has raised its outlook for 2008 organic net revenue growth to at least six per cent, up from the previous expectation of at least five per cent as a result of further pricing actions to offset rising input costs.
The company continues to expect cumulative annualised savings from the restructuring programme to reach approximately $1 billion by year-end and $1.2 billion by the end of 2009.
To date, cumulative annualised savings from this cost restructuring programme totaled approximately $927 million, up from approximately $785 million at the end of 2007.
