BioMar invests $119m in Ecuadorian shrimp feed company

By Aerin Einstein-Curtis

- Last updated on GMT

© BioMar
© BioMar

Related tags Aquaculture Sustainability

BioMar Group is focusing on expanding into the Latin America shrimp feed market with the acquisition of the feed producer Alimentsa, says CEO.

The purchase, which brings BioMar 70% of the Ecuadorian feed company, was announced earlier this month. The $119m investment is part of the Danish aquafeed company’s plan to be a major player within high-end shrimp feed.

The tie-up is expected to solidify BioMar’s regional footprint, which includes the company’s factory in Costa Rica, said Carlos Diaz, CEO of BioMar Group. It also allows the company to build off the work that Alimentsa was already doing.

“Ecuador is the biggest shrimp market in Latin America and one of the biggest in the world,”​ he told FeedNavigator. “Also, when looking at the different markets, Ecuador produces shrimp in a very efficient and sustainable way, [there is] still room for improvement, of course, and definitely room for growth.”

The feed company also offered a good match for BioMar because the two companies both place importance on high-quality products, he said. “In Alimentsa we found a company and owners which fit very much with BioMar culture and focus, high-quality feed and concepts,”​ he added.

“This partnership, we believe, will be a success, combining local knowledge and closeness to market with our global muscle, R&D capabilities and scale,”​ he said.

Additionally, the owners also will remain with the company as strategic partners, said Diaz. “They are our strategic partners, with local knowhow and market knowledge, they are also involved in shrimp farming, so we will continue working together,”​ he added.

The acquisition is currently pending approval by competition authorities in Ecuador and there is no anticipated timeline for that process, he said. However, it is anticipated to be a “smooth process.”

Why shrimp feed and Alimentsa

The shrimp market in Ecuador produces about 450,000 tons of shrimp a year, BioMar reported. Growth rates in the market are expected to be about 8-12% and Alimentsa has a market share of about 12-15% in Ecuador and sold about 77,000 tons of feed in 2016.

The company offers recognized products and market insights, said Diaz.

“The company is focus on high quality feeds and concepts,”​ he said. “There are big differences in the productivity a shrimp farmer can have in every hectare; and the higher the productivity, the higher need for better quality in feed, meaning high performance feed.”

“Alimentsa is focused in that segment,”​ he said. It also offers a range of services for farmers aimed at improving performance or supporting high performance from farms, he added.

“Alimentsa already have extremely interesting products and knowhow, which we will complement with what we have and of course we will use our global R&D set up and network to develop new concepts together,”​ he said. “There are many concepts used in salmon, and other species, that could be adapted to shrimp, functional and health feeds, sustainability concepts, etc.”

BioMar’s ongoing expansion plans

The aquafeed company is currently in a period of planned expansion, it reported. In 2016, it started production in Turkey and, thus far, in 2017 it has used two new factories to develop a footprint in China.

A new green field factory in Australia is set to start construction in 2018, the company said. All of these projects are in addition to the focus on shrimp feed in Latin America.

“All of those initiatives are a part of our growth strategy: Shaping the Future,” ​said Diaz. “We believe in being 100% devoted to aquaculture and we have clearly stated that we strive to be innovators dedicated to an efficient and sustainable global aquaculture.”

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