The deal sees KNG acquiring feed mills, a retail business and flaking operations.
KNG is said to be in the top 5% of regional players in the US. So when asked what the appeal of the Deluxe structure was for the Iowa headquartered company, KNG spokesperson, Janet Sichterman, told us: “Kent gains the additional capacity to produce texturized feeds, and adds the capability to produce steam flaked corn and beans.”
Deluxe, she said, serves the dairy and beef sectors but is an industry leader in the swine sector, and it sells direct to farmers.
Iowa ranks first in the US for corn and soybean production, with Iowa farmers harvesting 13.1 million acres of corn and 9.8 million acres of soybeans in 2015, according to data from the Iowa Department of Agriculture.
That data also shows livestock in Iowa consumes 291 million bushels of locally grown corn annually, and the state leads the nation in hog and egg production. The state has 20.9 million hogs, almost 32% of the US hog population, 3.9 million cattle, and 51.2 million chickens.
Iowa’s dairy industry produced an estimated 4.84 billion lbs of milk in 2015, with the average milk produced per cow coming in at 22,943 lbs (2,750 kg/L)
And the US state ranks second nationally in red meat production, with output at 7 billion pounds of red meat in 2015.
Sichterman said the amalgamated businesses will better support customers in Iowa:
“The combination of KNG operating under the brand of Kent Feeds and Deluxe Feeds will allow customers of both businesses to have access to an expanded products line and additional capacity to serve the market.
“The KNG research and development capability along with the successful commercial animal market business will provide customers with solid science based and practical implementation experiences to further their business growth.”
She would not disclose Kent’s future strategic plans in terms of whether it had its sights on other acquisition assets over the next 12 months, only saying: “We are dedicated to the feed manufacturing industry for the long term.”
Deluxe milling operations
Deluxe has been in business since 1972. The company operates two primary feed mills located in Sheldon and Ireton, in northwest Iowa.
The Sheldon site has multiple plants. A swine and dairy plant constructed in 2005 contains two completely independent feed lines to serve both segments. A texturizing plant constructed in 2007 manufactures texturized calf feeds, and the flaking plant constructed in 2003 manufactures steam flaked soybeans and corn, according to the manufacturer. The Ireton site contains a remodeled swine feed mill.
Manufacturing capacity for swine feed across the two sites is said to exceed 2,000 tons per day. Production at both sites is said to be fully computerized and fully integrated with invoicing and billing.