AB Agri acquires Polish young animal nutrition firm
Alistair Cross, managing director, AB Agri Speciality Nutrition, told FeedNavigator its Primary Diets operation has been able to grow its business in Poland through exports, so the company is quite confident about the piglet market in that country.
“We have been selling into Poland on an export basis for the past 10 years. We have built a sales and technical team there of six people. We had got to the stage where we had been sending a fully lorry load every day from our factory in North Yorkshire into Poland. So, for some time, we have looking to get our new production facility.”
This acquisition includes a factory and 35 employees.
“The factory was built three or four years ago. It is an excellent asset. It is a high quality production facility. There is a micronizer there, which enables us to give cereals the treatment required for high quality piglet diets. From what we have seen so far, it has some top-notch people and a good existing customer basis.”
Cross highlighted the significant export business Primary Diets has currently in countries surrounding Poland; the new facility will support those neighboring markets:
"We will be transferring our production from our Yorkshire facility to [the Smigiel plant] for both Poland and for other countries in Central and Eastern Europe."
AB Agri bought Michel Pasze through an auction hosted by a bankruptcy trustee.
“It was a business that had gone bankrupt through its previous owners. The business has been operating through the bankruptcy, it has been trading very well through that period."
Piglet feed line
The Polish facility is mainly ruminant feed focused right now, developing diets for calves.
“It is [currently] producing simple coarse mixtures, muesli type [diets] and micronized cereals.”
AB Agri wants to be able produce its piglet feeds from there as well.
“It should be relatively easy to add those, but there will be some CAPEX involved. We want to include fishmeal in our piglet rations, so what we will be doing is putting in an additional line so we can do both in the one factory.”
“We have already got half way through our CAPEX plans. We expect that, by the autumn, we will be producing our piglet feeds there.”
Based on existing configurations, the capacity at the Polish facility is around 30,000 tons a year. "However, it does not run 24 hours a day and we have not yet put in our piglet feed line. So we think we can significantly increase the current capacity.”
Ambitions
AB Agri has said it wants to become a leader in the young animal nutrition business in Europe, so are other acquisitions in this space on the cards then?
“From a baby animal nutrition point of view, we have a business in Spain called ASN that makes very good quality piglet feeds, we have Primary Diets in the UK, and we will have the facility for Central and Eastern Europe in Poland, three really good quality facilities, with Europe pretty well covered. ABF, our parent company, and AB Agri are always looking at acquisitions, and we have got a remit from our parent company to grow, so, yes, we would look at other opportunities in this space."
However, the challenge is that, in Europe at least, this business segment is relatively consolidated, with big global players already involved.
"There are not that many independent companies left in the industry, it is relatively mature and developed, but where opportunities do come up, we will always look at them, and this [Michel Pasze] is a good example."
Tackling zinc oxide, antibiotics removal
The pending removal of zinc oxide from piglet diets along with the ongoing shift away from antibiotics are big challenges for the industry, noted Cross.
“In both Primary Diets and ASN, we have developed rations that can perform just as well, and we would argue, that in trials, [they] have even started to outperform the traditional zinc oxide and antibiotic products. So we are confident we have a really good product range to face into those challenges, and that is the sort of product range we will be looking to bring to Poland as well, in the fullness of time.”
When asked about the cost-effectiveness of such a range, he said:
“Both Primary Diets and ASN are operating at the premium end of the marketplace. We do have ranges of products, but we find that if you invest in a better start you will get a better finish, we have the data and we have done many trials over the years to prove that. We believe that investing in the early stage of a piglet’s life will reap rewards throughout that pig’s life. It may cost a bit more, but you will get the payback.”
