BioMar acquires factory in China

 

Danish company BioMar, which is among the world’s leading manufacturers of fish feed, now acquires Chinese fish feed manufacturer Haiwei, together with its Chinese partner Tongwei. By doing so, BioMar speeds up the process of expanding in China, which is the largest market for fish farming in the world.

Owned by the Danish industrial conglomerate Schouw & Co., the Danish fish feed manufacturer BioMar now expands its operations in China. Through the 50%-owned joint venture company, BioMar-Tongwei Biotech Ltd.,  the Chinese company Haiwei situated in the southern part of China close to Hong Hong is now acquired.

In 2015, Haiwei generated revenue of more than DKK 300 million and has 120 employees. In 2017, Haiwei expects a sale of about 60,000 tonnes of fish feed, and recent investments will allow for an increased sale in the years to come.

BioMar’s share of the investment amounts to about DKK 40 million.

- Haiwei has a market-leading role in the southern part of China within high quality feed for fish farming, and both in terms of product and geography Haiwei constitutes a perfect match with our ambitious China strategy. Hence, we are very pleased that the deal has now fallen into place and that the investment can be made with our Chinese partner Tongwei, explains Carlos Dias, CEO of BioMar.

The deal was signed by Mr. Diaz and Guo Yizhong, CEO at Tongwei, on Thursday 24 November 2016. However, the planning of the integration into BioMar-Tongwei Biotech Ltd. has already begun, and in this case both BioMar’s and Tongwei’s qualifications are important; BioMar specialises in the optimising of recipes, sustainability, production and quality, and food safety, whereas Tongwei has a thorough knowledge of the Chinese market and has a fully built-up distribution network to the customers.

Besides the joint acquisition of Haiwei, BioMar and Tongwei have also begun the construction of production facilities in Wuxi near Shanghai. At first, these facilities will have a capacity of more than 50,000 tonnes per year and will be opened in September 2017 according to plan.

- Our future facilities in Wuxi have been planned for a long time and will be finished in less than a year. Haiwei facilitates us with a fully operational factory which already at this point in time can provide for the important market in the southern part of China. In this way we will in the short run bring forward our launching in China with one year, whereas we in the little longer term will double our planned capacity. At the end of 2017 we expect to have 200 employees in China and a capacity of more than 130,000 tonnes, he continues.

The two factories lie about 1,300 kilometers apart, and when speaking about the Chinese market, then local presence is quite decisive. This is in part due to the fact that the market is influenced by many small farmers which continuously need servicing, and in part the diversity in species in different parts of China. The south is dominated by hot-water species like seabass and snakehead. In the north cold-water species like turbot, sturgeon and trout are dominating, and the facilities in Wuxi have been designed to manufacture feed for these and other species.

In China, almost 30 million tonnes of fish and shellfish are farmed each year; hence China is the largest fish farming country in the world. And China is also the most important country in BioMar’s Asia strategy:

- BioMar balances on three legs: the salmon market in the North Sea region and Chile, several other species in the rest of Europe, and emerging markets, which i.a. comprises Asia. The latter constitutes the biggest potential for growth, and with the acquisition of Haiwei we are further speeding up the growth in China, Mr. Diaz adds.

In 2015, BioMar generated revenue of DKK 9 billion and has grown significantly since Schouw & Co. acquired the company in 2005. Both top and bottom lines have increased almost fourfold, but for Jens Bjerg Sørensen, President of Schouw & Co., the journey does not end here:

- BioMar has been and is still developing very positively, and we continue to see a great potential in expanding our activities within all three segments in BioMar. We need to invest in places where future outlooks seem most promising, and particularly in China the market growth is high. China is also interesting seeing that BioMar actually specialises in the species that the Chinese middle-class increasingly are demanding. Focus is on high quality fish where food safety is also highly prioritised, and where farming is carried out subject to sustainable conditions, he explains.

Mr. Sørensen adds that Schouw & Co. and BioMar continuously examine new acquisition opportunities in China and other interesting regions.  

 

For further information please contact

  • Jens Bjerg Sørensen, President, Schouw & Co., phone number +45 8611 2222

  

About BioMar

BioMar is one of the world's largest suppliers of quality feed for industrial fish farming. In 2015, the company generated revenue of DKK 9 billion and EBIT of DKK 447 million. BioMar has production facilities in Norway, Chile, Denmark, Scotland, France, Greece, Costa Rica, China and Turkey, and globally BioMar delivers feed in about 80 countries to more than 45 different species. BioMar is owned by the Danish industrial conglomerate Schouw & Co., which is listed on the Copenhagen Stock Exchange.

Further information about BioMar is available on www.biomar.com

Further information about Schouw & Co. is available on www.schouw.dk

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