Active ownership
Through the years, MSAB has been an active driving force in our holdings' journeys from local to international leading actors. There are no easy way to define successful relations but over the years we have proven the ability to create value through a very long term commitment, engagement and knowledge transfer among the board of directors, management and our network. We can often provide experience for a successful international expansion and we are not afraid of supporting larger strategical acquisitions as well as bolt-on acquisitions. We are also fully committed to bring in as much resources as possible to make the company prosper.
Board and management
MSAB works long-term to develop the holdings and closely monitors its financial development, risks and reporting. By being a large owner and having appropriate board representation, we have clear responsibilites as well as influence in our holdings. We do actively participate in the nomination committees in our holdings to make sure that the company gets the right board members with the right experience. By doing this we assure a constructive and positive dialogue between the board and the company's management. Normally, MSAB strive for at least two representatives from our network to be in the board and usually one of these has the position as chairman. Today MSAB has representatives in the board and nomination committees in all holdings except in VBG.
Two of the most important tasks for MSAB's network is to generate new business opportunities and work as a recruitment base for the board and management of each holding. Having the right board and management team are crucial for all holdings' future success. Recruitments to these positions are always done with the needs of the specific company as the most important factor. It is also important to be able to keep high performing management and board members over time. On a relatively small market with extensive competition for talented people, it becomes important to offer competitive renumeration packages. Hence, the renumeration packages in the holdings are continously assessed to make sure that they support the possibility to create value for the company's shareholders.
What MSAB can do for a new company
When we are assessing potential new companies we are looking among publically listed companies, but particularly we are interested in finding a private business. There are many well regarded Swedish and foreign companies which are managed by the founder or second and third generation entrepreneurs. Companies which has been built by hard work, commitment and industry knowledge. For these entrepreneurs it is highly important that their company continues to excel with competent owners which see the company's continued development potential. At MSAB we believe we have a lot to offer these companies. We have a solid reputation and a history as engaged and active owners with vast experience from long-term business development. We also have experience from managing and implement expansive strategies to give the company a strong global market position.
Concerning ownership structure after our investment we are flexible. Sometimes the former owner wants to stay as a minority owner and possibly reduce the ownership step by step. In other cases there might be several owners where some would like to stay as owner while other prefere to sell its stake. MSAB are open for many different kinds of solutions and we look positive on former management to stay on as shareholder as no one has more knowledge about the company than someone who has been involved in it for several years.
AAK - An example of MSAB's active ownership
In 2000 Melker Schörling became owner in Karlshamns, the vegetable oil company. The company then had revenues of approximately three billion SEK and an operating profit of approximately 60 million SEK. In 2001, Kooperativa Förbundets shares in Karlshamns was acquired and Melker Schörling became the main owner of the company with 31 % of the capital and votes. After this acquisition a new strategy was implemented together with the management, the remaining shareholders and other board members. The two main parts of the new strategy was to consolidate the Nordic market and specialize into individual niches within the speciality vegetable fats industry where competition was less pronounced and the profitability higher. Since then the specialisation has been implemented both through organic and acquired growth. An example is the business area AAK Bakery Services which produces fats to the bakery industry and has become a vital part of AAK.
A major step in achieving the goals of the new strategy was the merger between Karlshamns and Aarhus United (Denmark) in 2005. From an industrial perspective the merger had several attractive advantages. The deal created a consolidation for bulk products on the Nordic market and it also made it possible to specialise each production facility in Århus and Karlshamn on profitable speciality vegetable oil segments. As an example the world's largest facility for cacao butter equivalents was built in Århus in 2007.
As a consequence of the merger, MSAB became the main owner of the company AarhusKarlshamn. Before the merger, the Bek-Nielsen family was the main owner of Aarhus United. The family remains as large owners in AAK and we actively cooperate with the family in the development of the company. The Bek-Nielsen family has long experience and an extensive know-how of the complete value chain in the vegetable oil industry as they also manage their own palm plantations in Asia.
Today, AAK's revenue is approximately 16 billion SEK and the operating profit is approximately 830 million SEK. The company has production facilities in Denmark, Sweden, the Netherlands, Great Britain, USA and Mexico and the sales are truly global. The company still has great potential to grow within vegetable oil niches and MSAB will remain as an active owner to support the company into the future.