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Fresh Del Monte Produce Inc. Message Board

  • swampgator1 swampgator1 Dec 18, 2003 11:56 AM Flag

    FDP and CQB seem to move opposite

    CQB down yesterday - FDP up
    CQB up today and FDP down

    You would think they would move together?

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    • Thanks, Pgstocks. Nice article. I've only been in FDP since Jan '03, so I have not seen many older news bits.

    • Dole bought a 60 per cent share in Swedish fruit, vegetable and flower importer Saba Trading. It also bought a Spanish produce grower and acquired its way to becoming a leading US marketer of fresh cut flowers.

      On bananas, the company took interests in producers in Jamaica, Cameroon and Ivory Coast, while at the same time buying up European importers that held the licences needed to import bananas under the new EU regime.

      Del Monte has similarly expanded European distribution, while trying to cut costs, and also made a push into melons. It is a leader in fresh pineapples and has increased its banana business in Europe by 30 per cent, with half of its $2bn in revenues now coming from the continent.

      Unlike Chiquita, both Del Monte and Dole appear reconciled to operating within the current web of trade restrictions.

      Mohammad Abu-Ghazaleh, Fresh Del Monte's chief executive, said that success in Europe depends on corporate adaptability rather than what he called back-bench wrangling. It is tough, but manageable to do business in Europe regardless of what regime is installed, he said.

      "I don't want to hang my mistakes and my bad management on somebody else," says Mr Abu-Ghazaleh, a member of the family that bought control of the group in 1996. "We will just have to adapt to the reality. We are in business, not politics."

      Dole has similarly become more outspoken in calling for an end to the trade dispute. In a letter last month to the US Trade Representative's office, chief executive David Murdock urged the US to accept the first-come, first-served plan. "It is the continued uncertainty of this dispute that has the most corrosive effect on the banana industry," he wrote.

      Mr Murdock charged that the continued effort by USTR to force a different solution "is a naked, political effort to achieve a one-company solution for Chiquita". He said that Chiquita's ultimate aim is to gain "a guaranteed market share that is disproportionately greater than every other participant, including Dole".

      Chiquita for its part continues to insist that it is only demanding what international law requires. "The issue is WTO compliance. It's what protects us, it's what's accessible to us and it's what we're counting on," says Mr Warshaw.

      That doggedness, however, has not paid off on the bottom line. Said one European diplomat: "Dole pursued a smart business strategy, while Chiquita pursued a vendetta."

    • CQB sells every working day 4 million Euro,
      FDP every day 1,5 million Euro.

      • 1 Reply to LeonMusa
      • Where do you get that, 1.5MM Eu for FDP and 4MM Eu for CQB? Both have almost the same annual sales, about $2B. That works out to about 4.4MM Eu daily for both. Of course, FDP makes 2-3 times the profit on those sales as CQB does with a lower number of employees.

        Moving opposite directions is a result of trading activities, not investing. If it wasn't because of trading then short interest in both companies would not be so high. Of course, short interest in FDP is decreasing recently while it is increasing in CQB.

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