13 July 2021 - In late-May, Nutreco signed an agreement to acquire Bigsal, a Brazilian animal nutrition company, specialised mainly in minerals and complete feeds for cattle. The deal was completed on 1 July 2021. The company, which serves farmers in northern Brazil, was previously owned by an affiliate of H.I.G. Capital. The private equity firm acquired Bigsal in January 2017.
Bigsal - established in 2003 and headquartered in Ji-Paraná, Rondônia state - will strengthen the position of Nutreco’s animal nutrition division Trouw Nutrition in Brazil, specifically in the beef and dairy sectors, Nutreco said upon announcing the acquisition.
Trouw Nutrition has nearly a two-decade-long history in Brazil.
It started when Nutreco acquired two Dutch companies with operations in the country: Selko in 2002 and Sloten in 2005.
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In 2009, it acquired 51% of Fri-Ribe, one of the main complete feed producers in the country. In March 2012, Trouw Nutrition took full control of the company. In April 2012, Nutreco acquired Bellman Nutrição Animal, a specialist in mineral supplements for ruminants. In December 2014, Nutreco acquired two more companies, in line with its strategy to expand its business in Brazil, this time for monogastric species - Fatec Indústria de Nutrição e Saúde Animal Ltda. (a producer and supplier of premixes and animal health products) and BRNova Sistemas Nutricionais S.A. (a supplier of premixes). |
Saskia KorinkNot counting Bigsal’s production activities, Trouw Nutrition currently has three factories; two located in the state of Sao Paulo (in the southeast), one of which produces premixes, the other mineral supplements; and the other factory in Mato Grosso state (midwest) which is also a mineral supplement facility.
In a recent interview with Feedinfo, Saskia Korink, CEO of Trouw Nutrition, discussed the evolution and shared her satisfaction that her company has become a significant player in Brazil. However, she stressed that Brazil remains a huge market. And even after several acquisitions, there is still room to grow.
“Brazil is obviously a key global market in terms of animal protein production and exports,” she commented. “It's a company stronghold from that perspective.”
Asked if Trouw Nutrition felt underrepresented in the northern part of Brazil or in the local cattle premix and specialties segment, Mrs. Korink nodded but specified that due to the low-margin nature of the category [minerals and complete feeds], it does not make financial sense to ship these products long distances.
“From a margin perspective, we wanted to really build a presence in in the North, which is an important region. We estimate about 40 million head of cattle in the North,” she said. “In order to service those farmers over there, you need to have a local production facility. So that's where Bigsal comes in.”
“And why now?” she added. “We jumped on the opportunity that arose and also, it has been a very strong year on the ruminant side with good margins, and with more growth to come.”
Trouw Nutrition’s CEO also highlighted Bigsal’s track record and journey to becoming a leader in their category in the northern part of Brazil, benefitting from a strong brand.
“Looking at the last five years, Bigsal has had a very positive trajectory,” Mrs. Korink said. “Bigsal services over 10,000 farmers so they have been able to really develop that proximity and customer intimacy.”
She also pointed out that the company had to make a transition, moving from a more family-oriented company to a more professional setup.
Her comments echo the words of Marcelo Hudik, Managing Director of H.I.G. Brazil and Latin America, who earlier this month said: “Our focus was to lead the transition from a family business to a more professionally managed company with long-term strategic plans and institutional governance.”
According to H.I.G. Capital, investments in the past last five years have allowed a growth rate of over 50% in Bigsal's revenues and provided the company with “a leading position in the states of Rondônia, Acre, Amazonas, and in the northern region of Mato Grosso.”
Bigsal, being based in the Amazon region, is also very aware of the land limitations and consequences of cattle herd carbon footprint, Ms. Korink went on to say. Therefore, being able to use cattle supplements and increasing herd productivity in a sustainable way makes sense, especially where cattle numbers are high and land use is restricted.
The sophistication and increased technification of cattle farmers in the north of Brazil is also an ongoing project.
According to Mrs. Korink, approximately 50% of farmers in the region do not use supplements, so there is still a lot of opportunity to increase productivity which companies like Trouw Nutrition/Bigsal can seize.
“In combination with what Bigsal has in terms of product portfolio, some of the technology that we have already utilised in the south of Brazil, and Bigsal’s proximity to the farmers and their knowledge of that region, I think it's going to be really powerful combination for us to further grow our business in the northern region,” she commented.
Asked what the consequences the integration will have on Bigsal’s activities and employees (i.e. Bigsal has approximately 150 staff), Ms. Korink replied it will be business as usual for Bigsal for now.
“We are going to maintain the brands, which is what we did with Bellman. We are going to start interacting with Bigsal from a strategic perspective. We will start by maybe bringing them some of the technologies and some of the different things that we do in the South.”
“There are possibilities for cross-fertilization, but all in due time,” she added.
Trouw Nutrition will also be keeping the vast majority of Bigsal’s workforce, and over time will start seeing if there are synergistic actions that can be taken.
“But really, what we see,” said Mrs. Korink, “is that we are buying a company that helps us expand into a region where we're currently not present. The main reason for the acquisition is this growth potential.”
