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ANNUAL REPORT 2011

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DISCOVERING OUR POTENTIAL

Potential - Princes

Princes Limited
Growth Driven by Branded Products and Private Brands

UK-based food and drink supplier Princes is executing a growth strategy which includes M&As and the formation of partnerships with leading suppliers. Through this strategy, this wholly owned MC subsidiary is making great strides expanding its food business in the European market.

Revenues of Princes (£ million)
Revenues of Princes
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In 1989, when MC acquired Princes, the company's main business was the sale of canned products. Since then, Princes has conducted no less than 19 M&As.

These acquisitions included a drinks business in 1991, an oil business in 1998, a spread business and an Italian food ingredients business in 2001, and a bottled water business in 2004. With these acquisitions, Princes' business model has evolved from being predominantly a trading company to a more manufacturing-focused business, and its category reach has expanded.

Alongside efforts to rationalize and achieve business efficiencies, Princes has expanded the range of branded products it supplies, and has undertaken the production of private brands for other companies. Due to this continuous focus on the growth of its business, Princes has increased annual revenues to £1.2 billion, nearly 7 times more than when MC acquired the company. Princes is now well and truly one of the top UKbased food and drink suppliers.

In February 2011, Princes made another move toward expansion, by instigating its 20th M&A. Princes entered into a conditional agreement to acquire the canning operations of another UK-based food supplier, Premier Foods plc.

With this latest acquisition, Princes expects to be the leading manufacturer of canned foods for the retail market in the UK. Princes' market leadership of canned fish and meat will be supplemented and enhanced by canned beans and vegetables. As part of the acquisition, Princes will acquire two additional manufacturing sites. Armed with these new assets, Princes will endeavor to serve the retail market even more by further enhancing quality assurance and price competitiveness, strengthening traceability and taking other actions.

MC views Princes as the growth vehicle of its food and drinks business in Europe and aims to achieve even greater successes in the future.

One of Princes' key strategies is to further expand and enhance its business platform in continental Europe. To this end, we have strengthened operating structures at Princes Foods B.V., our sales subsidiary in the Netherlands, and established EOL Polska, a Polish edible oils affiliate, in 2010. In these and other ways, we have expanded our business.

Looking ahead, we plan to seize other opportunities to conduct M&As to acquire more manufacturing bases, businesses and brands as we rise to the challenge of driving more business expansion.

Princes Limited Chairman
Kazuo Ito

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