The Dutch feed maker is aiming to be an industry leader in Spain. It said the purchase of the Acorex compound feed facility allows it to expand its footprint in the region of Extremadura, where cattle farming is strong.
De Heus signed off on the deal yesterday.
José Manuel García, the general director of De Heus in Spain, said the company’s commitment to the Spanish market is “firm and long-term.”
"With this acquisition De Heus takes a leading position on the Spanish-Portuguese open feed market enabling it to fulfil its ambition to play a meaningful role in further consolidating the global animal feed market. Spain and Portugal are very important and well developed agricultural countries. De Heus not only strengthens its country portfolio, but due to the common currency, being active in the Spanish market also increase its stability."
The Acorex plant has 19 employees and the current production capacity is 11,000 MT per month.
However, De Heus said it is planning short-term investment to both improve efficiency at the plant and to increase production capacity to 180,000 MT per year.
The acquisition of the Acorex feed plant brings to 11 the number of feed manufacturing sites that the Dutch group owns and operates in Spain.
De Heus entered the Spanish market in November 2015, when it acquired leading Iberian feed producer, Nuter, from a private equity group. That deal included the 12 plants operated by Nuter across Spain and Portugal with the production sites strategically located near the biggest livestock farming areas.
De Heus, then, also has facilities in Aranda de Duero (Burgos), Benavente (Zamora), Colloto (Asturias), Porriño (Pontevedra), Llerena (Badajoz), Lugo, San Pedro de Nós (A Coruña), Silla (Valencia), Talavera de la Reina (Toledo) and Ubeda (Jaén).
Spanish market
According to the 2017 Alltech global feed survey, Spain is the fifth largest feed market globally after China, the US, Brazil, Mexico: “The major story within the European region is Spain. It now leads EU feed production at 31.9 million metric tons, an 8% increase from last year. This increase is significant given that the region as a whole grew by 3.36% compared to last year.”
The compound feed market in the Iberian region, though, has been flagged previously by other players as challenging in terms of profitability, with ongoing consolidation the trend - it is said to be quite fragmented with the top 10 companies having a relatively small market share of 39%.