it was not necessarily the individual brand that lost out but the whole industry; therefore it was in the interests of the whole industry to work together in order to try to reduce the risk. I found this an interesting debate in which I am inclined to take the
British Retail Consortium’s point-of-view. Nevertheless, Rhodes makes a number of good points; I wonder what the trade as a whole would make of it.
NEW OWNERS FOR EWOS I first heard of potential developments concerning fish feed manufacturer EWOS earlier last year when it became evident, late in May, that owners Cermaq ASA were on formerly Unilever-owned Marine Harvest’s acquisition list. Cermaq, which is 43.5 per cent owned by the Norwegian
government, rejected the Marine Harvest offer early in June and said it would hold talks with investors on the sale of assets. However, rescue came in the shape of a 6.2 billion-kroner - $1.1 billion - offer for its EWOS fish feed and nutrition unit which has produced fish feed since 1935, from two private equity funds: Altor Equity Partners and Bain Capital LLC – an offer that ‘is considered sufficiently interesting for Cermaq to initiate a process with the aim to conclude a final agreement’. The sale duly went ahead on 31 October 2013, following which Cermaq was able to pay down debt and to pay out an extraordinary dividend. I must admit that the reason for Altor’s and Bains Capitals’ interest in
EWOS is not entirely clear to me. EWOS is one of three major companies producing fish feeds for salmonids globally, and the market leader in the salmon feed markets. EWOS supplies extruded feeds for the entire piscine life cycle from hatch to harvest of salmonids and pangasius, a fresh water catfish native to Asia. Feeds are also supplied for a number of other marine and fresh water species, positioning EWOS to take part in the expected growth within these species. EWOS is positioned in all of the four large salmon-producing countries, with three production facilities in Norway, and one each in Chile, Canada and Scotland. In addition it has a presence in the Vietnamese pangasius feed market. From these operations, EWOS exports feed to a range of countries in Europe, South America, Asia, Russia, and to the US. In 2011, EWOS’ total production passed the one million tonne mark and, in 2012, EWOS’ sales growth of 12 per cent allowed the company to increase its market share still further with total sales for the year ending at 1,208,000 tonnes. In the UK, EWOS chalked up sales of £89.21 million and pre-tax
profits of £5.58 million; it has more than doubled its sales in the past five years. Perhaps this last factor partly accounts for the enthusiasm with which Altor and Bain Capital (the latter of which one was co-founded by Mitt Romney, the defeated Republican candidate in the last US Presidential Election) have embraced their new acquisition. According to its new owners, EWOS is now ‘an independent company prepared for strong growth’. Chief Executive Officer Einar Wathne, noting that EWOS had a strong global market position and its key strength was its considerable knowledge of nutrition, production and logistics, especially in the shape of its R&D company, EWOS Innovation, added that ‘We are set to use this strong platform for further growth’.
PAGE 12 JANUARY/FEBRUARY 2014 FEED COMPOUNDER
CEO Wathne, commenting on recent developments drew attention
to the fact that feed production was becoming more and more advanced. The feed industry would increasingly need to be knowledge-based, adding that ‘EWOS is uniquely poised to lead this shift.’ Altor and Bain Capital have long followed developments in the salmon aquaculture sector and are ‘excited’ to back EWOS in its next stage of growth. A spokesman for Bain Capital, noting that EWOS was the ‘undisputed leader in the shift toward sustainable value-added feeds, added that EWOS’ world-class research facilities and an unrivalled history of successfully partnering with its customers was driving ‘superior outcomes’ for the aquaculture industry. EWOS had already taken the first step towards achieving growth in emerging markets and was expected ‘to continue to explore opportunities globally to leverage our knowledge base, expertise, and leadership,’ said Edward Han of Bain Capital. All good stuff and this column will be watching to see how EWOS performs under the new regime.
ILLEGAL MILK WARNING IN NORTHERN IRELAND The Food Standards Agency has, I understand, warned dairy farmers in Northern Ireland not to succumb to the temptation of adding milk from other sources to their own supply. Apart from the fact that it is illegal so to do, it could potentially introduce contaminants and ultimately comprise the integrity of the entire milk supply chain. The announcement came as an investigation into reports of illegal smuggling of milk from the Republic into Northern Ireland got under way. Compounders will be concerned by this in view of the size of the
market for dairy feeds – 472,300 tonnes of dairy compounds and 244,300 tonnes of coarse mixes or blends for dairy cattle in 2011, the last full year for which data is available. Maria Jennings, Food Standards Agency Director in Northern
Ireland, said that illegal milk movements threatened the safety and traceability of milk and milk products processed in Northern Ireland and that the FSA fully supported the advice issued by the dairy industry, that farmers in Northern Ireland should not become involved in this illegal practice, adding that ‘Any information or evidence brought to the attention of the FSA or DARD will be fully investigated and where evidence of malpractice is found, enforcement action will be taken against those involved and affected milk and milk products will be removed from the food chain.’ The FSA is urging any farmer who is offered milk to contact their local DARD dairy inspector or veterinary officer.
DUGDALE NUTRITION STARS One of the more trivial reasons that I follow Dugdale Nutrition with interest is that it is one of the most prompt companies in the industry when it comes to the filing of its statutory Report and Accounts. With an accounting date of 30 April and looking at the last ten years, the latest date that Dugdale has filed has been the 2nd
of September;
mostly, the company has filed at various dates in July, in other words, within three months of their year end. This is helpful for those wishing to get a relatively recent snapshot of what has been going on in the industry,
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