Produs buy is ‘last missing piece of the jigsaw in terms of our European reach’: Alltech
“We wanted to have a business base in Norway to build on our significant growth in that market, and also it was the last missing piece of the jigsaw in terms of our European reach.
Initially we looked at buying the aqua business only but, during our discussions, it became evident the ruminant side was equally as critical in terms of our Norwegian strategy,” Patrick Charlton, Alltech vice president for Europe, told FeedNavigator.
He said Alltech has had a “close working relationship” with the Produs teams on the aqua and dairy and beef side for the past 13 years, supporting them externally. “Actually, 98% of what Produs Aqua sold was from our product portfolio,” he said.
Strategic R&D move
Alltech, said Charlton, is heavily involved in aqua feed research alliances in Norway with the likes of the University of Bergen and Nofima, focusing on developing algae and enzyme based technology to ensure greater sustainability of the Norwegian salmon industry and boost productivity in a migration away from the finite supply of marine ingredient feed inputs.
“We see huge scope for innovation in the farmed fish feed business and this Norwegian aqua asset thus strengthens our hand in that regard, ensuring greater collaboration with research bodies in what is a hugely important aquaculture market,” he explained.
The Norwegian ruminant sector requires a different focus compared to other markets, he said, as small herds dominate and it is rather fragmented as an industry. “Herd size tend to be in the region of 20 to 50 cows. Nutrition support teams generally travel around the country, advising farmers directly – this approach will allow us to leverage our feed technology in cow health and performance,” said Charlton.
Indeed, Alltech views the acquisition as continuing its long term goal of achieving a greater presence on farms around the world, whether they are dairy, beef or fish operations. “Our goal is to get closer to those farmers for a more direct approach while obviously continuing to work with the local feed mills,” added Charlton.
Consolidation
The family owned Produs businesses, which have been operating as two separate companies since their inception, are located in Førde and Bergen.
They will now be consolidated under the Alltech Norway brand and managed by Magne Kolstad, chief financial officer, Produs.
Alltech has been quite active on the asset trail of late - last autumn saw it acquire premix manufacturer, Lienert, to develop the dairy and beef side of its business in Australia.
In February this year, it bought a UK provider of farm environmental assessment tools, E-CO2, which it said would give it access to ‘big data’ to support its global feed research program, while in April, it bought out leading North American animal nutrition player, Ridley.
