Cargill Intends Acquiring Royal Nedalco
MECHELEN, Belgium, February 1, 2011- Cargill has announced its intention to acquire Royal Nedalco’s
alcohol operations from its parent company, Royal Cosun.
Cargill and Nedalco - who operate plants adjacent to each
other in both the Netherlands and the UK - have been business partners for
many years. Cargill’s wheat processing plants supply Royal Nedalco with wheat
raw materials for its alcohol production process. This acquisition is
therefore a natural extension of Cargill’s long-standing business operations.
This deal involves Nedalco head office in Bergen op Zoom (The
Netherlands), the Royal Nedalco plants in Manchester (UK), Sas van Gent (The
Netherlands) and Heilbronn (Germany). The three Royal Nedalco production
plants produce about 1.4 million hectolitres of high quality potable and
industrial alcohol per annum and employ approximately 100 people. Royal
Nedalco’s technology development activities are not part of this deal.
“The acquisition of Royal Nedalco is an excellent strategic
fit for Cargill, complementing our existing asset footprint, and a great
opportunity to create value for our customers, due to our involvement at each
stage of the wheat supply chain,” says Peter van Deursen, head of Cargill’s
starches and sweeteners business in Europe. “Royal Nedalco is recognised as
one of the market leaders in premium potable and industrial alcohol in Europe
and we already supply them with raw materials for a substantial part of their
alcohol production process.”
Van Deursen continues: “These raw materials are part of our
existing wheat processing activities, so this represents an excellent
opportunity for us to enter a high value market complementary to those in
which we are already present on the food, non-food and feed side. By
converting these raw materials into high quality alcohol ourselves, we will
add considerable value to our overall starch operations. Furthermore, this
acquisition will strengthen our employee base with the addition of very
qualified and motivated people who bring valuable expertise in the production
and marketing of potable and industrial alcohol.”
Royal Nedalco’s high-quality alcohol is used in multiple
industrial applications in the spirit, food, pharmaceutical, chemical and
cosmetics industries. For the spirit industry, the company’s alcohol is used
as a superior ingredient. In the non spirit segment, the alcohol has a wide
arrange of applications, from flavours and perfumes to mouthwash,
disinfectants and printing ink.
Royal Nedalco’s Managing Director, Ger Bemer, states the
benefits to Cargill of acquiring such a highly skilled company and workforce:
“The strength and expertise of the Royal Nedalco employees have resulted in
genuine client relationships characterized by mutual respect. This unique
position on the market, combined with Nedalco’s world class factories has
convinced Cargill to enter the alcohol production market. This step will
provide our employees and customers with solid long-term growth opportunities
under the wings of a privately held company focused on long-term value
creation.”
Robert P. Smith, President and CEO of Royal Cosun, says: “We
intend to divest our alcohol operations as they no longer form part of our
core strategic focus. But we are convinced that the sale of the Royal Nedalco
facilities to Cargill will provide the business and the employees with
interesting long-term growth.”
Completion of the acquisition is dependent upon regulatory
approval, which is expected in the second quarter of 2011
Source: Cargill