Koepon and CRI go together
Dairy breeding requires economies of scale
Koepon and CRI announce their intention to merge. Both parties are already among the larger organizations within cow genetics. The merger creates one of the largest breeding organizations and that is necessary, because the costs are rising rapidly.
Genex, part of Cooperative Resource International (CRI), has a volume of approximately 12 million straws. Cees Hartmans, CEO of Koepon, indicates that CRI in the United States (US) is larger than Koepon, but that Koepon is larger than CRI worldwide. By comparison, the American World Wide Sires, formerly Accelerated Genetics and Select Sires, sells 19 million straws.
Consolidation continues
Globally, the playing field in cow genetics looks like this: Select Sires, Genus/ABS, Alta Genetics, CRI, CRV from the Netherlands and Semex. The merger between Select Sires and Accelerated Genetics in the US has not yet been completed or Koepon Holding (owner of Alta Genetics) and CRI have announced their intention to merge. "Already 30% to 40% of our market is in the US." It is one of the reasons that Koepon opted for a merger with a partner in the US. At the same time, this is also the cradle for almost all large and influential breeding organizations in the world.
"The merger will create synergy benefits, such as activities in the field of breeding, BackOffice and ICT," says Hartmans. "But the own brands will continue to exist." Hartmans explains. "Alta is known as an aggressive, professional private marketing machine. This can never be a cooperative. And vice versa, CRI can never take a private approach. They are a strong cooperative and we need to nurture and strengthen that bond with the members where necessary."
The difference between CRI and Alta is that Alta is a private organization under Koepon, where CRI is a cooperative. "In the new company, the cooperative becomes a shareholder and the members receive a dividend." It also means setting up a new corporate structure. That it can work has been shown, among others, at the Dutch HZPC. A plus for the merger is also that the corporate cultures fit together well. "Both the Pon family and farmers and supporters speak the same language."
The next step to bring about the proposed merger is a due diligence. If no strange things emerge from this, both companies will vote on the plan. "We hope to have the merger complete before the middle of 2018," says Hartmans.
What is the benefit to the Dutch dairy farmer?
"The merger makes us stronger", answers Hartmans when asked what it will yield the Dutch dairy farmer. "It provides continuity and gives us the opportunity to continue to invest in breeding, in order to stay at the forefront of genetic development."
"Both Koepon and CRI have also invested in training. This concerns training for their own people, but also for farm managers or dairy managers. Dutch dairy farmers can benefit from this. After the abolition of the milk quota and the discussion about phosphate , challenged by an increasing volatility in the milk price. You have to farm on a cutting edge to be able to survive. Reproduction is very important in this, but calf rearing is also important. The latter partly determines the amount of milk in the future." Hartmans gives examples of where the people Koepon and CRI are trained and where they can give added value to Dutch dairy farmers.
What drives breeding?
Current developments make it appear that dairy farmers are going to focus more on liters. However, this is not what Alta stands for. "We want cows that get pregnant every year and last for years. It is important to do that well and then you will quickly have the most efficient herd. And for that you need healthy cows that are comfortable in their own skin."
Hartmans indicates that you hear more and more from large dairy companies that healthy, well-managed and highly productive cows are better for the environment. Simple because fewer cows are needed to produce the same volume of milk, which puts less strain on the environment. "Good reproduction, so making a cow pregnant again quickly after calving is a symbol of a fit cow and good milk production."
Herman van den Pol
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