Acquiring Blommer, North America’s largest industrial chocolate maker (2018)

Buying a rank, and holding a business

What the Fuji Oil group obtained in this acquisition was a North American customer base and the position of third in the world in industrial chocolate. It was a judgement that, at the end of a way of proceeding by buying up companies region by region, secured large-scale plant in the largest market with the biggest investment in its history, and it can be seen as consistent with the logic that a materials maker improves its purchasing terms through scale. That sales more than doubled in five years also shows the size of the business taken in.

But the plant it bought was what a company founded in 1939 had accumulated, and its obsolescence came with it. When cocoa bean prices surge, scale converts directly into the amplitude of profit and loss. The course of events — closing the Chicago plant five years after the acquisition and shifting equipment to Canada — shows that gaining a rank and continuing to hold that business in a form that earns are separate problems. Improving North American earnings has now been handed down through three successive presidents, and the verdict on this acquisition appears not yet to have settled.