Nutreco expands presence in Brazil with 'bolt on' buys

By Jane Byrne contact

- Last updated on GMT

Related tags: Nutreco

Nutreco expands presence in Brazil with 'bolt on' buys
Nutreco’s acquisition of two Brazilian premix and feed specialties firms makes sense, and will extend its footprint in one of the fastest growing animal nutrition markets, says an analyst.

In line with its strategy to expand into growth geographies, Nutreco said it has bought Fatec, a producer of premixes and animal health products for broilers, layers, swine and dairy cows, and BRNova, a producer of premixes and feed specialties, mainly for poultry and swine. 

“It will be quite easy for Nutreco to generate value out of these purchases. It can really leverage its R&D expertise and significant purchasing power to capitalize on these 'bolt on' acquisitions, which expand its range and build on its presence in Brazil,”​ Maarten Bakker, equity analyst at ABN AMRO, told us. 

Brazil is the third largest animal nutrition market in the world, with annual growth of 4% to 5% in that segment. 

Following the acquisition of Fatec and BRNova the total pro forma annualized 2014 revenues of Nutreco Brazil is expected to hit the €185 million ($230m) mark. 

Premixes, animal health and probiotics ​ 

Nutreco says the deals give it greater access to the southern, central and mid-western states of Brazil, will serve to boost its presence in the markets for layers, broilers and pigs, and will strengthen its portfolio through the addition of premixes, animal health products and feed specialties including probiotics. 

“Probiotics are relatively new for Nutreco. Volumes are relatively small but have potential​,” a spokesperson for the Dutch feed giant told this publication.

And he said the acquisitions would also enable the company introduce its global brands to the Brazilian market. 

He would not confirm the financial details of both transactions nor reveal any growth projections for the two Brazilian companies. “We don’t make any forward looking statements regarding these acquisitions,”​ said the spokesperson. 

Fatec is headquartered in Arujá, São Paulo state and sells approximately 20,000 MT of feed and animal health products per year, with revenues this year expected to be around €50m. 

BRNova, headquartered near Campinas in São Paulo state, was only established in 2012 and sells aroundy 15,000 MT of premixes and feed specialties annually. Its income this year is projected to reach around €25m.

Nutreco’s existing businesses in Brazil include Bellman, which makes mineral supplements for ruminants and FriRibe, a premix and feed specialties producer targeting the ruminant, swine, poultry and aquaculture sectors. 

State of play on offers for Nutreco

Meanwhile, in terms of the ongoing acquisition process for Nutreco initiated by an offer from Dutch investment firm SHV in October, ABN AMRO’s Bakker said: 

“It would seem like its full steam ahead for SHV in its bid to secure all of Nutreco’s shares and give the least possible chance for any other parties to enter into the race. 

However the door is still open. The tender period lasts eight weeks from when SHV finalizes its offer. This is a rare opportunity to snatch Nutreco so I would be surprised if there were no other offers made in that time. 

And Nutreco management reported last week that Cargill was still evaluating the situation.  So it is highly speculative for the moment.”​ 

Related news

Show more

Related products

show more

Rumi Start maximally nurtures your young potentials

Rumi Start maximally nurtures your young potentials

Nuscience Group | 09-Sep-2019 | Technical / White Paper

Maximizing efficiency is key for dairy and beef farmers to obtain better revenues. Accelerated calf rearing without losing focus on health issues is vital...

HOW TO CHOOSE A GOOD SELENIUM SOURCE FOR YOUR FEED?

HOW TO CHOOSE A GOOD SELENIUM SOURCE FOR YOUR FEED?

Lallemand Animal Nutrition | 19-Jun-2019 | Technical / White Paper

Nutritionists are aware of the benefits of feeding organic selenium (Se) to animals instead of inorganic, mineral sources. However, when it comes to selecting...

Functional proteins: remove zinc oxide on pig diet

Functional proteins: remove zinc oxide on pig diet

APC Europe | 14-Jun-2019 | Technical / White Paper

The use of Zinc Oxide (ZnO) has been recently restricted at high levels in pig feed by EU regulations, due to concerns on environmental pollution and the...

Giving your piglets a head start in life

Giving your piglets a head start in life

Nuscience Group | 03-Jun-2019 | Research Study

Genetic selection for increased litter size resulted in lower piglet birth weight and less developed piglets. Piglets also receive less sow colostrum and...

Related suppliers

Follow us

Products

View more

Webinars