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Nutreco doubles global premix activities

Nutreco announces takeover of BASF's business in eight countries

February 20, 2007

Nutreco doubles global premix activities

Nutreco Holding N.V. announced today the takeover of the animal feed blends, premix and base mix business of BASF in Poland, Italy, USA, UK, Mexico, Guatemala, China and Indonesia with in total 435 employees. The purchase price is not disclosed. 

With this new step, Nutreco's premix and feed specialities business - Trouw Nutrition International - with total annual sales in 2006 of EUR 550 million will almost double its sales in premixes to EUR 400 million and will become the number two player in the global premix industry.

After integration and transformation the acquired BASF businesses will contribute EUR 10 million in operating profit to Nutreco in 2009 mainly due to cost synergies. It is expected that the acquired businesses will have a similar margin in two years' time as Nutreco's existing premix and feed specialities operations.

The acquisition of BASF's animal nutrition operation in five promising growth markets - USA, Mexico, Poland, China, Guatemala and Indonesia - contributes directly to the realisation of Nutreco's growth ambitions for its core business in these markets. The takeover of BASF's operations in Europe strengthens Nutreco in its leading role. Especially the BASF business in the UK - ‘Frank Wright' - is an important asset given its specific role as supplier of the pet food industry.  Except for Indonesia and Guatemala, the acquired businesses will be connected with Trouw Nutrition's local premix and feed specialities business resulting in stronger market positions and higher margins.

The closing of the transaction will be subject to the approval of regulatory and competition authorities and of the consultation with and approval from works councils and trade unions. 

Juergen Steinemann, Nutreco's Chief Operating Officer: "This is an important step for Nutreco at a time when we have just finished the Rebalancing part of our "Rebalancing for Growth" strategy and mobilised all our resources for a full focus on the growth of our core businesses of animal nutrition and fish feed for aquaculture. In addition it strengthens our business model, supplying feed specialities, services and know how to our customers worldwide".

The world market for animal nutrition grows by 2 - 3% per annum, although in China, Mexico, USA, Poland and Indonesia this percentage is higher.

"Reinforcing our strongholds in these growth markets with BASF's operations will help us to gain momentum for further expansion in the America's and Asia. At the same time our leading position in Europe in premix and feed specialities with Trouw Nutrition International is strengthened with the contribution of the mixing business of BASF in important animal feed markets."

“The divestment of the animal nutrition premix business is part of our strategy to operate efficiently and flexibly in the food and feed markets and, thus, to position BASF Fine Chemicals as a sustainable feed ingredient supplier to the feed industry,” said Dr. Wolfgang Büchele, head of the BASF Fine Chemicals division. The consolidation of human and animal nutrition into one nutrition business in November 2006 was a first step in this direction. BASF is focusing on producing and marketing important vitamins, carotenoids, enzymes and organic acids.

This sale covers the majority of BASF’s animal nutrition premix business. The remaining part of this business at other sites is significantly smaller and locally focused. “We are working to find alternatives for these sites, too. Further divestments to potential local buyers are among the options being considered,” Büchele added.

In addition to premixes, BASF produces vitamins, carotenoids, enzymes and organic acids for animal feed.

In the past 20 months Nutreco has acquired feed specialities businesses in Japan, Mexico, Russia, China, India and the Netherlands. In Brazil, Nutreco established a new feed specialities production facility.

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