Raisio’s feed business up for grabs

By Jane Byrne

- Last updated on GMT

© GettyImages/EnriqueM
© GettyImages/EnriqueM

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Finnish group, Raisio, says it is looking to divest its feed operations as part of a strategy to focus on the healthy foods business.

In December 2017, the company sold off its confectionery business; Irish group, Valeo Foods, acquired the entirety of that division, including plants in the UK and the Czech Republic, for €100m (US$120)

Raisio announced today that it is now considering a sale of its cattle and fish feed businesses, and that it has initiated negotiations with several players in that regard.

The grain trade business is not for sale, it added.

“To ensure Raisio’s organic growth, we are going to move from a holding-type structure to a model in which all resources are targeted toward supporting the strategic objectives of the Healthy Food Division. Raisio also seeks growth through acquisitions that suit our core business,” ​said Pekka Kuusniemi, CEO of the Raisio group.  

Raisio said that, during the negotiations, it would be business as usual for its feed operations.

If the discussions currently underway do not result in a sale, it said it would continue to develop the feed division as part of the group.

The company told us it did not wish to comment further on the proposal at this juncture, with its financial results in February set to go into more detail on the rationale for the divestment. 

Focus on cattle and fish feed 

Its feed and grain unit, Raisioagro, has made feed mixes since 1948. Its market share in Finland is approximately 40% in terms of cattle feeds and over 50% in fish feeds. It exports fish and cattle feeds to Russia, the Baltic Countries and the CIS countries.

The company ceased production of poultry and pig feed in 2014, citing a “lack of competitiveness”​ in the market in Finland.

It decided then to focus on its “core competencies”​ of cattle and fish feeds saying there was little vertical integration in dairy and fish feed production in Finland, and it was confident that, through innovation, it could expand its footprint in those sectors.

However, the company’s interim report for Q3 2017, published in November last year, noted profitability and liquidity problems in Finnish agriculture and livestock farming were weakening the purchasing power of the sector and putting pressure on Raisioagro's profitability.

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