May 1, 2013

Germany's Baywa sees fivefold growth in grain trading

After its purchase of Dutch grains trader Cefetra, German agricultural cooperative Baywa expects its grain trading volumes to increase to around 30 million tonnes in 2013, five times as high as last year.

The €125 million (US$162.57 million) acquisition and its €35 million (US$46 million) purchase of Germany's Bohnhorst has turned Baywa from a local grain trader into a significant international trading company, Chief Executive Klaus Lutz told Reuters on Friday (Apr 19).

"Before these acquisitions, we were a localised southern German/Austrian company without deep sea port access and we were surrounded by friends, the local cooperatives," Lutz said.

Rotterdam-based Cefetra trades in products including soy, grains and palm products, and German Bohnhorst deals in grains, fruit and vegetables, feeds and fertilisers.

Lutz said the purchase of Cefetra in particular would boost Baywa's trading volumes in grain markets.

"Thanks to this expansion, we expect our grain trading volumes to rise from six million tonnes last year to 28-30 million tonnes in 2013, making us a top international player."

Lutz said that he sees the company's key growth areas in North Africa - a major buying region for cereals - and the US, but added that he did not expect further acquisitions this year.

"2013 will be a year of consolidation, but we still want to grow through acquisition in our grain and fruit business, and are keen to develop a global distribution network. North Africa is very interesting for this, but also the US, and we hope to find new opportunities from 2014 onwards," he said.

Lutz said the company's target for 2014 was to achieve earnings before income and tax (EBIT) of €150 million (US$198 million) in its agricultural sector, and of €50 million (US$66 million) each in its other sectors, energy and building materials.