Dutch farm co-operatives to initiate feasibility study for merger

DUTCH farm co-operatives Cehave Landbouw belang and Agrifirm will study a merger to create a company with €2.1 billion in annual sales, as they seek to cut costs and lift purchasing power.

The feasibility study will take three to four months, the co-operatives said yesterday.

Veghel-based Cehave and Meppel-based Agrifirm expect “considerable financial and strategic benefits” from a merger, they said.

“Both firms see the number of agricultural entrepreneurs declining, while the size of companies is fast- growing,” the co-operatives said. “This scale increase is leading to tougher and new demands on suppliers such as Agrifirm and Cehave.”

Cehave had 2008 sales of €1.19 billion, mainly from animal feed, compared with sales of €916 million for Agrifirm, most of it from feeds, fertiliser and cereals, according to the companies’ annual reports. Cehave has about 6,000 members and Agrifirm has 15,000, the companies said.

“This offers extra growth opportunities for both organisations’ domestic and foreign activities. This will also lead to better technical and financial results for its members,” the co-operatives indicated.

The intended new co-operation with a joint turnover of 4.33 million tonnes of compound feeds and 1.9 million tonnes of moist feeds will be among the largest in Europe.