January 23, 2014

 

Abraaj Group acquires majority stake in Turkish dairy business Yörsan Group

 

 

Private equity firm Abraaj Group has acquired a majority stake in leading Turkish manufacturer and distributor of high quality dairy products, Yörsan Group, in partnership with the European Bank for Reconstruction and Development and the Yörük family.

                                                                                                        

Yörsan has been manufacturing branded dairy products in Turkey for over 50 years, during which time it has built high brand recognition and loyalty and has a market leading position in the higher value dairy segments.

 

Yörsan has a strong portfolio of products covering all the main dairy categories of yoghurt, cheese, milk and the traditional Turkish drink - ayran. Yörsan's high quality products, modern production facility in Susurluk and pan-national distribution network makes it one of the best-positioned dairy manufacturers in the fast-growing Turkish dairy industry.

 

The dairy sector in Turkey is estimated to be TYL6.5 billion (US$2.8 billion) in size currently, according to Euromonitor and proprietary market research. It has grown even during economically challenging years such as 2009, which highlights the industry's defensiveness.

 

Growth in the Turkish dairy industry is driven by the continued conversion from open to packaged products due to rising urbanisation and an increasing share of organised retail, which currently stands at 50% of the market in terms of volume. Also, Turkish income per capita has doubled over the last decade and is expected to double again in the next 10 years.

 

Turkey's dairy sector demonstrates ample room for growth considering dairy consumption volumes per capita are still low at approximately 1/3 the levels of more developed markets.

 

Working alongside a new and seasoned leadership team, Abraaj will use its significant investment expertise and track record in the dairy industry as well as its strong networks across growth markets to transition Yörsan onto its next phase of growth both inside and outside of Turkey.

 

In what was the largest private equity FMCG transaction in Sub Saharan Africa, outside of South Africa, Abraaj recently acquired a majority stake in Fan Milk, a leading manufacturer and distributor of frozen dairy products and juices in West Africa. Abraaj also has ownership in Brookside Dairy, which is the largest dairy in East Africa. These previous investments, coupled with European Bank for Reconstruction and Development's (EBRD) experience and portfolio in Eastern Europe and CIS countries, will provide Yörsan's management with access to a global network and deep sector knowledge.

 

Selçuk Yorgancıoğlu, partner and regional head of Turkey and Central Asia at Abraaj, said, "Abraaj has a highly successful track record in Turkey underpinned by proven investment partnerships, landmark exits and a strong commitment to this vibrant country."

 

Omar Syed, managing director at Abraaj, said, "The combination of Abraaj's unique value creation focus, our global experience in the dairy industry and the strength of the company's management team will realise our ambition of transforming Yörsan from a highly successful family-run Turkish dairy business into a world class FMCG player. To this end, partnering with EBRD is a strong value added aspect which provides us access and insight to the Balkans and CIS region."