Grupo Vall Companys returns to the Americas
Grupo Vall Companys, Spain’s largest food company, is expanding in Latin America. Two decades after selling the farms it acquired in Oklahoma and Texas (USA), it has turned its focus to Latin American countries. In Colombia, Mexico, Brazil, Peru and Uruguay it has acquired stakes of close to 40% in swine production and marketing companies. According to the company, this growth will be accompanied by the continuation of its production in Spain at current levels.
The companies in which it holds stakes already total 55,000 breeding sows. “The target for 2025 would be to reach, across the companies we participate in throughout Latin America, around 100,000 sows,” states international expansion director Tomás Blasco. This figure would represent one third of the company’s current production in Spain, of approximately 300,000.
Through its international production expansion, the meat industry giant seeks to diversify risks related to both raw material purchasing prices and sales, taking into account the growing demand for animal protein in Latin American countries, the large livestock population in Europe – which is beginning to decline in all countries except Spain and Poland – and the tightening of animal welfare regulations within the European Union.
The company aims to meet the growing demand for animal protein in Latin American countries
The group has ruled out company acquisitions in favour of minority stakes alongside local players who know the market. “Over the last five or six years,” Blasco explains, “we have been able to enter the most populous countries and we have chosen to do so with local partners who share our philosophy, with the intention of becoming a relevant player and contributing our know-how in technology, animal welfare and environmental management.”
Grupo Vall Companys developed the livestock integration system in the 1960s, under which the owners of the facilities – the integrated farmers – raise the company’s pigs or poultry, with the company supplying the farms with feed and veterinary services.
In Colombia, in the Cauca Valley, Grupo Vall Companys has acquired a 40% stake in the agricultural company Goloso del Valle, through a share purchase-and-sale process and capital increase. This company has a presence in livestock farming and end-point marketing, but not in slaughter. In Puebla, Mexico, it has established VallPork de México in partnership with the company Loto Hermanos. It began operating in August 2022. The Mexican market is attractive to the Catalan group because it imports from the USA and production holds international approvals to export to key Asian markets such as Japan.
In Brazil, in Santa Catarina, the group has acquired a 32.78% stake in Master Agroindustrial, a fully vertically integrated company with a presence across the entire food chain. It operates feed mills, works with 300 integrated farmers, runs two slaughter and cutting plants and employs around one thousand people. The expansion into Peru has been carried out alongside the Ponce family, with a 40% shareholding. And in Uruguay, the group has purchased a 40% stake in La Constancia in Pando, a leading meat company with its own brand in the region, owned by the Urgal family. The acquisition includes breeding sows, land, farms and a slaughter and cutting facility.
Turnover grew by 38% in 2023, partly due to historically high pig market prices
The investments in Colombia, Mexico, Brazil, Peru and Uruguay could be joined by those in other countries in the region. “We are permanently keeping our ears open,” the international expansion director notes; “the possibility of establishing a presence in Chile has been explored, though we are not in a position to say anything further about that work.”
The new international operations are proving to be an opportunity for many in-house professionals seeking fresh international challenges. They have coincided with a period of accelerated growth in the swine sector and the consolidation of Grupo Vall Companys’ Iberian pig project.
Over five years, the turnover of the company – which comprises 45 businesses in Spain – has risen from €2,054 million in 2019 to €4,148 million in 2023, considering only operations within the country. When presenting the 2023 accounts, showing 38% growth over the previous financial year, the group attributed the increase to historically high pig quotation prices at Mercolleida, “driven by the inflationary tailwind of 2022 and the imbalance between supply and demand, the acquisitions of Embutidos Rodríguez (January 2023) and Grupo Sada, and the merger process of the flour milling division with Caja Rural de Navarra (at the end of 2022).”
In the 2023 financial year, the group, headquartered in Lleida, achieved a profit of €243 million, more than double the €110 million recorded in 2022, and invested €87 million. Investment in Lleida and its surrounding area reached €27.7 million, 12% more than the previous year. According to its figures, the family-owned group founded in 1956 closed 2023 with 2,600 associated farms, 12,558 direct jobs across its production facilities and central services – up 9.2% on 2022 – the majority located in small rural communities.
Source:
-. Newspaper LA VANGUARDIA 3-OCT-2024