The Ede-Wageningen headquartered, De Heus, signed a deal with that consortium of investors on 27 November to purchase the Spanish-Portuguese compound feed maker.
Nuter, which was formed in 2007 following the merger of Saprogal SAU and Piensos Pascual SAU, employs over 500 people and produces over one million tons of feed annually for the local ruminant and monogastric sectors from its 12 manufacturing plants located in Spain and Portugal. It sells to farmers both directly and through a distribution network.
Julio Muñoz, Nuter’s Chairman, said De Heus will help bring the Iberian company to the next phase of its development. It will continue to be managed by the current management team.
Commenting on that, CEO of the Dutch company, Co de Heus, said: “[We] generally hold the view that local business units should be managed by local professionals. They know the market better than anyone, feel at home in their own country, speak the language and understand the culture.”
Fragmented market
The total size of the Iberian feed market is approximately 25 million tons, 10 million of that is traded on the open feed market and the remaining 15m tons are produced within integrated chains, noted De Heus.
“Nuter is exclusively focused on the open market in which it occupies a second position,” said its Dutch buyer, adding that its production sites are strategically located in relation to the biggest livestock farming areas.
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%.
Nutreco had put its Iberian compound feed and poultry meat businesses for sale last year but announced in June 2014 that it had scrapped the divestment process after talks with several potential buyers indicated ‘no fair valuation could be obtained.’ Its Nanta compound feed business in Spain and Portugal has a 13% market share of the open feed market.
But a spokesperson for De Heus told us that as Nuter and De Heus complement each other, they are both convinced they can continue to grow in such a consolidated market.
He said the Spanish and Portuguese economies are experiencing a healthy recovery, which is expected to result in a slight growth of the feed market as well.
"Nuter’s local market and professional knowledge of nutrition and livestock farming, combined with De Heus’ international knowledge and experience, will result in further product and service improvements contributing to the further progress [and profitability] of the [local] livestock production sector," added the spokesperson.
De Heus said Nuter's expertise can also be applied in other countries that are comparable with Spain and Portugal in terms of their livestock farming structure, such as Latin America.