Devinish Nutrition acquires Vitrition

Anpario divests organic feed business as it posts a 14% hike in pre-tax profits

By Jane Byrne contact

- Last updated on GMT

Anpario divests organic feed business as it posts a 14% hike in pre-tax profits
Feed additives group, Anpario, has sold its organic feed division to Belfast based Devenish Nutrition for £750,000.

The UK firm, announcing its full year results up to 31 December 2014 yesterday, said the low margin nature of the organic segment was generating a negligible impact on profits.

Richard Edwards, Anpario’s executive vice chairman, told FeedNavigator:

“We could have held out for another year and perhaps generated higher proceeds from the divestment  of Vitrition.

While the organic sector had been in decline in the UK for the past few years with volumes taking a hit, we are beginning to see a pick-up in demand – market dynamics would definitely seem to more favorable now as the UK comes out of the recession.

But organic feed is non-core business for us and with our focus now on building our international presence in markets such as the US, China and Brazil through our value added feed additive portfolio, we didn’t want to be distracted by peripheral activities that require significant investment of time and energy to deliver growth.”

Yesterday saw Anpario post a pre-tax profit to £3.3 million ($5.02M), a 14% jump on earnings of £2.9m in 2013, despite the “currency headwinds" ​and political turmoil in certain markets.

Growth strategy

The group chairman, Richard Rose, said the company’s strong trading position, debt free balance sheet and the “continuing cash generative nature”​ of its core business leaves it well placed to finance further organic growth and acquisitions.

Edwards says Anpario has never had challenges in terms of raising investment capital: “We have always delivered for our shareholders.”

But he stressed the group is in no hurry to acquire new business: “We are not going to do a deal for the sake of it. We have enough to be getting on with already in terms of our own portfolio. Some of our products are underexploited – they have a lot more mileage. For example, our toxin binder is proving very successful in the ruminant sector – a segment we have not, typically, done a lot of work in."

At IPPE in Atlanta, Murray Hyden, biosecurity director at Anpario, told us the company is really accelerating the R&D side of the business after being somewhat static for a while. “As we continue to attract investors at a rapid rate, there is increased motivation in the group – this is translating into a hike in the number of trials being run globally.”

Edwards agrees. He said the firm has spent the past few years integrating the various companies it had acquired, setting up in markets like China, Brazil and the US, and only then undertaking further work in relation to product development and extended feeding trials.

Organic growth is on the cards in the US - a market where the additives producer has been building its presence in over the past year.

We have been somewhat surprised by the speed at which our gut health products have gained traction in the poultry segment in the US​. The turnaround in relation to the migration away from antibiotic growth promoters there in the past 12 months has been remarkable​,” he added.

China pig prices

Anpario said low pig prices in the early months of the year in China did not hamper the development of its operations there and that it is looking to enter the poultry and feed mill channels to offset volatility in the swine sector.

“China is not a market that gives a quick return. Some companies go in with false expectations. But we know it is about hard work and recruiting the right people.  We are in it for the long term and, step by step, province by province, we are building a sustainable and resilient Chinese division,”​ said Edwards.

Anpario reported double digit growth in the Asia Pacific and Americas. It said sales “advanced strongly”​ in Australia, New Zealand, Bangladesh, and South Korea with a similar sales performance in Bolivia, Colombia, Ecuador and Mexico.

However the ongoing adverse political situation in the Middle East and Africa continued to restrict access to and limit business in those regions, said the UK group.  

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