Dufry’s purchase of three duty free operations in the region is a good sign of prosperity, according to Asutil Secretary General José Luis Donagaray.
He told The Latin America Report Dufry’s investment “shows business is growing,” adding July sales in the region have surpassed those in July 2010. “(The acquisitions) are good news for us,” said Donagaray, adding the traveller will benefit from the deals. As the news is so recent, Donagaray said he had not heard any local reaction.
In a conference call today, Dufry CEO Julian Diaz, said the US$957 million acquisition yesterday of Interbaires operations in Argentina, as well as airport operations in Uruguay, Ecuador, Armenia and Martinique have been “in our target over the last three years.” According to Diaz, there were “different sellers” in the acquisition and a confidentially clause prevents him from disclosing names, however, he does say they were family-owned business. Argentinean billionaire Eduardo Eurnekian had key interests in the Interbaires operation (which Dufry paid US$359 million to acquire), as well as the Armenian airport. His nephew Martin Eurnekian currently oversees Interbaires airport operations in South America.
Diaz said he wasn’t concerned that the deals closed at a time when world markets are experiencing increasing instability. Negotiations have been taking place for a few years, he said, and the forecasted profits for the new acquisitions are good. “There can be problems anywhere,” said Diaz. “Reality has shown in the past,” when one region has a problem, other regions are growing, he said. The Dufry support system for its operations worldwide is able to cushion the effects of a region in trouble, he said.
Also included in the purchase was the IOSC wholesale company which has a bonded warehouse and logistics system in Uruguay, described by Diaz as “one of the most impressive I’ve seen.”
Diaz stressed Dufry’s goal is not to be present in many countries, but to be present in countries where the company can take advantage of synergies.
He said Dufry’s expertise in the Brazilian travel retail market will be of great benefit as the number of Brazilians who are travelling is on the rise and 43 percent of theoretical customers in the new acquisitions are Brazilian.
Also, Dufry’s successful business model of duty free on arrival will be duplicated in Argentina airport stores, said Diaz.
The purchasing power of Dufry is now the largest in travel retail worldwide, said Diaz. “We have significant power of negotiation.” Diaz said this purchasing power will lead to better prices for travellers and better presentations of products.
One of the goals for the next three years is a minimum of 8 percent organic growth per year, for the new operations, said Diaz.
Dufry still has more opportunities to announce, with a statement on new concessions scheduled for Thursday, August 11.
Full report can be viewed: DUFRY ACQUISITIONS
