Dutch predict future M&A wave

In the end, the companies will transform or expand into big internationals, with high revenues and small margins or in medium sized companies with specialised feed and specific advice for regional concept.

Fuelling this development are the constant high prices for feed, according to director Henk Flipsen of the Nevedi, the umbrella organisation of Dutch feed manufacturers. He predicts in the Dutch newspaper Boerderij Vandaag price rises of 10%  or more. “Although the prices for raw materials keep rising, the feed industry does everything within its power to lower its production costs. High feed prices put pressure on the profitability of  the feed chain. That’s tough for the Dutch animal husbandry market.”

Flipsen thinks the exploration of by-products and residual streams could lower the feed costs in the future. “There are a lot of opportunities” The growth of the feed companies by mergers and acquisitions are in his view necessary to keep the production costs under control by improved efficiency.

The last couple of years has already shown this development within the Dutch feed industry. ForFarmers for example last year took over the Hendrix organisation from Nutreco and acquired UK’s largest feed miller BOCM Pauls. Nutreco took over a string of companies in 17 countries, most notably in Spain, Portugal and Canada.