AUCKLAND, NZ: Scales Corporation Limited (SCL), a New Zealand-based agribusiness group, has announced that it has acquired a 50% stake in a new petfood ingredient processing operation, Esro Petfood BV, in Europe.
The joint venture is formed with Esro Food Group, a global meat processing company with factories in The Netherlands, Belgium and Spain.
The deal will expand SCL’s Global Proteins division, which already operates petfood ingredient businesses in the USA, NZ and Australia. SCL will provide lending facilities for a combined €15 million to fund capital expenditure for two petfood ingredient processing plants in Europe. The investment will be funded initially from SCL’s existing cash reserves.
SCL’s Managing Director Andy Borland said that the partnership with Esro will enable SCL to offer its petfood customers a truly global solution for their ingredient procurement requirements. He said that Esro is an established and respected business with a long history of processing and selling edible by-products, and has the ambition to diversify its activities to include petfood ingredients.
Esro’s CEO Joris Rooijackers said that he is delighted to have a strong partner like SCL, who has extensive experience and a strong reputation in the petfood market. He said that he is confident that the joint venture will make a strong contribution to Esro’s operating result in the future.
The joint venture will be headquartered in The Netherlands. Its first plant will be based in Belgium, where an existing processing facility that was previously used by Esro for edible by-product processing, is being converted to a dedicated petfood ingredient plant. Construction of the new plant is underway and it is expected to be operational in the last quarter of 2023. The joint venture is also considering options for a second site, but a final decision on this is unlikely prior to 2024.
SCL’s Chair Mike Petersen said that the investment demonstrates SCL’s commitment to Global Proteins, both in terms of expanding its geographical reach and the range of products that it can supply. He also said that the investment is unlikely to have any impact on earnings until part way through the 2024 financial year.
SCL is a diversified agribusiness group with interests in horticulture, food ingredients and logistics. It operates across New Zealand, Australia, Asia, Europe and North America. SCL’s shares are listed on the NZX Main Board under the ticker code SCL.