DLG group moves into Spanish market with premix firm buy

28-May-2019 - Last updated on 28-May-2019 at 08:24 GMT

The DLG Group's premix and nutrition business, Vilofoss, has acquired the Spanish family run animal nutrition company, CPC.

The Spanish market is Europe's largest in terms of pig production; it is a completely new growth market for Vilofoss Group, said the Denmark headquartered, DLG.

Vilofoss has purchased 75% of the shares of Complementos de Piensos Compuestos (CPC) with an option to purchase the remaining 25%. The family will continue to work at the premix firm.

“It is very important for us to keep the family in the business and keep them involved. They have the local knowledge, and they know the customers,” said Kristian Hundebøll, CEO, DLG Group.

The deal strengthens Vilofoss’ position as one of the largest premix and nutrition companies in Europe, he said

What appealed about CPC for the Danish cooperative was the quality of its production, the professional approach to production and the fact that innovation is very high on its agenda, Hundebøll told us.

“We plan to grow together and expand production,” he added.

Established in 1978, CPC produces 15,000 tons per year with a turnover of DKK 120m (approx. US$18m). It is located in the province of Navarra in northern Spain, so it well placed to serve the Spanish pig production industry, added DLG. Its output includes premixes and starter feed for pigs, cattle, poultry, sheep and goats.

“CPC is an extremely solid company with high earnings and no debt.”

South American markets

The Spanish company exports 25% of its production primarily to South America, markets such as Columbia, Chile, Mexico and Venezuela, in which DLG/Vilofoss does not have a presence. It also exports to Cuba.

Following this acquisition, Vilofoss now operates 16 factories in seven countries in Europe and it has a smaller stake in a vitamin factory in China. The business produces 400,000 tons of premix and nutrition a year and has a turnover of more than DKK 3bn.

In January this year, Vilofoss also entered into a joint venture with the French company, ARC, which is specialized in piglet nutrition and also produces chick prestarters. DLG said France is one of the most interesting markets for its vitamin and mineral business.

ASF outbreak

Asked what does DLG believe will be the short term and longer terms impact of the current Afican Swine Fever (ASF) epidemic in Asia on the global pig sector and on the demand for other animal protein products, Hundebøll said:

“We follow the situation very closely as we are also active in China. The most important thing for us is that we are strong in all species in the animal nutrition sector."