Deal will bolster our sow feed production expertise: ForFarmers

© iStock/jauhari1

ForFarmers says its latest acquisition shows it expects recovery in the Dutch pig sector.

Last week saw it agree to acquire VleutenSteijnVoeder, a feed producer focused on swine production, predominantly in the South East of the Netherlands.

The deal is subject to approval by both the Dutch and German competition authorities.

Vleuten-Steijn, which outsources its feed manufacture to third parties, generated a turnover of some €91m in 2015 from the sale of around 295,000 tons of feed to sow and piglet farmers in both the Netherlands and Germany.

“Vleuten-Steijn’s is in a strong position. While the main asset we purchased was its customer base — large farmers at the high end of the market —we also acquired that producer’s know how and precision in terms of developing and producing feed for the sow and piglet segments,” Jan Potijk, director, ForFarmers Netherlands, told us.

He said that knowledge, combined with ForFarmers’ existing R&D expertise in swine diets, will help reinforce the group’s reputation in that field.

Potijk said the pig producers that Vleuten-Steijn sells directly to have been recognized for their technical performance and high production standards aimed at maximizing sow prolificacy. The farms get, on average, 30 piglets per sow.

Consolidation anticipated

And such farms, he continued, have also been able to ride out the significant challenges of late for the Dutch pig industry as they have the advantage of scale. “They continue to become bigger and better,” added Potijk.

He stressed ForFarmers has confidence in the long term future of the swine sector in the Netherlands, and that it anticipates even further consolidation within the sow segment.

Vleuten-Steijn is to remain as an independent entity within ForFarmers on finalization of the deal.

The Netherlands is home to around 5,000 pig farms with a combined population of more than 12 million pigs, according to Rabobank data.

Last September the bank noted some 20% of those producers were in financial trouble, and predicted the number of Dutch pig farms will be halved in 10 years’ time.

More recently, Dutch trade journal, Nieuwe Oogst, reported that five pig-farming companies went out of business in the Netherlands during the first quarter of 2016, as many as in the whole of 2015. And Dutch media outlet, De Gelderlander, said some producers are so stretched financially they are unable to feed their pigs. 

In May, we spoke to the director of the Dutch feed trade association, Nevedi, about the challenges the Dutch pig industry faces.  

De Heus deal 

The Lochem headquartered group is not the only large Dutch feed player on the asset trail this month.

De Heus moved to strengthen its position in the east of the Netherlands by taking over family owned feed producer, Coops Mengvoeders. That acquisition, announced on 13 July, also awaits regulatory say-so.

Coops is a long established Dutch feed manufacturer, with output reaching some 115,000 tons of compound feed annually.  

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