In late 2003, few investors would have been willing to bet on the future of Parmalat. The dairy giant's shares were worthless, creditors were restless and its top executives sat behind bars. But two years after its huge accounting scandal, General Manager Carlo Prevedini says Parmalat is ready to return to the bourse with a streamlined global structure, a focus on core brands and a range of new products on supermarket shelves.
As a result of tighter controls and despite a limit on job cuts, profit margins at the insolvent group have climbed to 7.5 percent in the first five months of 2005, up from 6.8 percent last year and moving closer to a 2007 target of 12.1 percent.
"We have concentrated on managing Parmalat, on handing the group to new shareholders in the best possible condition," Prevedini told Reuters in an interview.
"That means we are working towards the targets set out in the industrial plan to allow the new shareholders a choice on the way forward: to continue (with us), or to sell."
Parmalat was engulfed in one of Europe's biggest corporate fraud scandals when a 4 billion euro ($4.8 billion) hole was discovered in its accounts in December 2003.
But on the factory floor - thanks to emergency legislation and a restructuring plan drawn up by commissioner Enrico Bondi - work never stopped and new products are still pouring out.
Prevedini's drive to boost Parmalat's business is betting on high-margin goods, which he says will secure a foothold with health-conscious consumers in saturated dairy markets.
"The future is to keep the milk, to keep Parmalat's juices, but to launch more products with specific, health-related functions that matter to consumers," he said.
Parmalat has launched a range of products with added vitamins and a co-enzyme, called Q10, which the group says helps battle ageing. Milk with Omega 3 essential fatty acids, which help to fight heart disease, is due to be launched next month.
NEW OWNERS:
As part of the restructuring, Parmalat will carry out a 12 billion euro debt-for-equity swap and relist on the bourse this autumn. Bondholders will then own more than 50 percent of the group while creditor banks will own some 30 percent.
Prevedini said that, amid the uncertainty over Parmalat's future ownership, "We are trying to work like horses - we only look forward."
Various firms have already been named as possible Parmalat suitors, among them France's Lactalis, which owns Societe and President cheeses, and Italy's Granarolo, a fresh milk producer.