Ecuador is one of the largest shrimp producing markets, ranked fourth worldwide; it is a market that has been attracting the interest of leading fish feed players such as BioMar, Cargill and Skretting, in recent years.
The French company said the deal would consolidate its presence in the shrimp feed segment - last year saw Neovia buy out US larval feed and probiotics producer, Epicore, which also operates a division in Ecuador focused on the shrimp sector.
The financial terms of the Balnova acquisition were not disclosed.
Eric de Seguins Pazzis, marketing and business development director at Neovia, said the deal was in keeping with its strategy to make aquaculture one of its seven focus activities, with predicted growth in aquaculture of +450% by 2040 globally.
With a population of 16.5 million inhabitants, Ecuador is the eighth most populated country in Latin America. Between 2004 and 2014, the Ecuadorian economy stabilized and witnessed remarkable annual growth of 4.5%. In 2016, shrimp represented 20% of the country's exports. Ecuador ranks as the first shrimp feed producer in Latin America and fourth worldwide. Extensive shrimp farming started in the country in 1969 before moving to a semi-intensive system in the early 1980s. Thanks to natural conditions favorable to farming and a stable climate throughout the year, the country devotes more than 216,000 hectares to aquaculture farming, 95% of which is dedicated to shrimp.
Source: UN’s Food and Agriculture Organization (FAO)
Balnova specializes in pressed and extruded feed for shrimp. In operation since 1991, it produces 40,000 tons of feed annually, and has 100 employees. Its production plant is located in Guayaquil, a major port city on the western coast of Latin America.
The company has two product lines, one related to dietary solutions for shrimp and the other related to vegetable-based fertilizers for nourishing microorganisms living in the water.
The owners of Balnova, the Nueva Pescanova Group, are divesting the asset as they deem it non-strategic, according to Neovia.
Holistic approach to fish production
Neovia flagged up what it termed its “holistic” approach to fish farming including everything from feed to the management of fish ponds to ensure “profitable, quality production that respects the environment.” It stressed that the synergies between Epicore, Balnova and Acui-T, a firm it recently acquired that specializes in water treatment for aquaculture fish ponds, would allow it to address both the challenge of ensuring quality fish feed, but also sustainable growth of fish ponds worldwide.
The expansion of Neovia over the past few years, both geographically and in terms of new feed segments, caught the attention of US agribusiness giant, Archer Daniels Midland Company (ADM). In July, ADM announced it was in exclusive talks to take Neovia for €1.5bn (US$1.75bn) as part of the US group’s strategy to expand in the fast growing animal nutrition sector.