Marel to offer more innovation with Stork merger
acquisition of Stork's food processing systems unit, clearing the
way for a firm with much bigger presence in food manufacturing.
Shareholders at the Dutch group Stork gave their approval for the sale of the food systems business last Friday, with clearance from the competition authorities the last remaining hurdle. It is expected to come in late February. The €415m deal will more than double Marel's turnover, according to chief executive Hordur Arnarson, and should lead to more innovative products for food manufacturing customers. "Marel is known for its software while Stork is good in mechanics. Our customers can expect to see more innovation in the future," Arnarson told FoodProductionDaily.com. "We already invest €40 million every year in R&D. We'll be able to utilise our R&D spend better in the future." The two businesses are complementary, with no overlap in product portfolios, according to the Icelandic group. Stork Food Systems has focused on developing advanced equipment for poultry processing as well as further processing of meat, previously working with Marel on some of its technology. Turnover at the Stork food business during 2007 is expected to be €380m, of which €310m comes from the core activities in poultry, meat and further processing and the rest from Stork Food and Dairy Systems (SFDS), which makes products for the dairy, juice and food processing and pharmaceutical industries. The poultry and meat processing business is expected to earn €41m. The unit has seen annual growth of 14 per cent in the last four years, thanks to new products and expansion in emerging markets. Merging this unit with Marel will give the group economies of scale in production, especially in building up production capacity in emerging markets such as South America, Eastern Europe and Asia and increased purchasing power in components, metals and electronics. "We are seeing competition from China in some areas and we expect that to increase in the future," said Arnarson. Marel embarked on a new strategy to counter this competition in 2006 and since then has made a number of acquisitions and increased capacity. It expects to generate revenues above €650m for 2008 compared to €129m in 2005. "We estimate that we'll have about 15-17 per cent of the market then," added Arnarson. Stork, which also has an aerospace and technical services unit, agreed in November to the breakup of the group and its takeover. Marel Food Systems already operates in 24 countries and includes AEW Delford Systems Ltd in the UK, Carnitech in Denmark and Scanvaegt International in Denmark. In November 2007 Marel announced a move to increase its business in France, with the establishment of a new subsidiary in Vannes. This office is taking over sales and service activities from Scanvaegt France, AEW Delford and Marel ehf. in all industries except in the fish industry. Arbor, which served as an exclusive agent for Marel Products for years in the French market and Marel Food Systems, maintains its 50 per cent ownership of the company. Arbor continues to act as an exclusive agent for Marel Food Systems in fish on a temporary basis.
