ForFarmers withdraws from Belgium

Animal feed group ForFarmers intends to sell its activities in Belgium to Arvesta. With the sale, 420.000 tonnes will disappear from the portfolio, for which €25 million will be collected. The sale can be seen as a striking step that deviates from the DNA of the company. 

Through the acquisition of ForFarmers Belgium, Arvesta is taking over both the approximately eighty employees who produce and sell approximately 420.000 tonnes of feed, and the production location in Izegem in West Flanders. In addition, the factory location in Ingelmunster is also part of the transaction. One reason for the sale is the pressure on the agricultural chain in Belgium, according to a press statement. This refers to the shrinking animal numbers.

The sale of co-products, horse feed and organic feed will continue, because ForFarmers does this from the Netherlands. The deal is also a prelude to more intensive cooperation between the two companies. For example, ForFarmers will produce broiler feed for Arvesta in Belgium in contract production. Conversely, Arvesta's feed activities in the broiler sector in the Netherlands will be transferred to ForFarmers.

Striking step
The sale of the activities in Belgium, where ForFarmers is the fourth player, can be seen as a remarkable step. In 2018, ForFarmers made another major acquisition in Belgium when Voeders Algoet was acquired. In addition, the activities in Belgium can easily be combined with the home base in the Netherlands. Nevertheless, ForFarmers is now taking a fairly rigorous step by withdrawing from the Belgian market.

This is not in line with the DNA of the company. After all, in the past the animal feed giant almost always took over companies, but in the new strategy growth no longer seems to be an end in itself. Part of this is to achieve a better spread between growing and shrinking markets. Possibly the sale of the Belgian branch is a prelude to something new in another country, such as the company aspires.  

The deal, worth €25 million, still needs to be approved by the competition activities. This will probably take place in the second half of this year.

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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