February 10, 2014
Nutreco to divest non-core compound feed and meat businesses
Nutreco is set to divest large non-core compound feed and meat businesses in Spain and Portugal and grow its global products to be closer to its core growth segments of animal nutrition and fish feed, as well as restructure the organisation.
In dealing with the current times, Nutreco is expected to be a global leader in innovative and sustainable nutritional solutions which best support the performance of animals, fish and shrimp. Nutreco aims to maintain its global market leadership in salmon feed but also diversifies into feed for other fish species in order to reduce its dependency on the salmon feed market.
The long term average organic growth rate in fish feed is approximately 5% per annum. However, for the short term, the revenue growth may be tempered due to the decision made by Nutreco's largest salmon feed customer, Marine Harvest, to invest in feed capacity in Norway.
Knut Nesse, chief executive officer of Nutreco said, "After careful consideration we intend to divest a large part of our non-core businesses. As part of this process and in response to the market reality, we have reviewed our business opportunities. We have concluded that the fundamentals that underpin our strategy, 'Driving sustainable growth' remain strong."
In addition, effective February 6, 2014, Viggo Halseth, chief operating officer for aquaculture, becomes chief innovation officer in the new executive committee and will step down as member of the executive board. Jerry Vergeer, chief operating officer for animal nutrition and member of the Executive Board will step down from the board by February 6, 2014 and will leave Nutreco with effect from July 1, 2014. The new structure enhances the key strategic drivers of innovation, partnerships and building up a portfolio of higher value-added nutritional solutions.
The intended divestment, fewer sizeable value-creative acquisitions than foreseen and market developments in Norway, leads to adjustment of the previous financial guidance to achieve €400 million (US$546 million) earnings before interests, taxes and amortisations (EBITA) by 2016.
Nutreco's strategy 'Driving sustainable growth' is to grow and improve profitability by providing innovative and sustainable nutritional solutions for its customers. This will be realised by focusing on a higher value added portfolio of nutritional solutions such as premixes, feed specialties and fish feed, and by expanding into the growth geographies of South America, Russia, Asia and Africa, which is expected see the largest increases in both production and consumption of animal protein food products.
