Univeg cuts turnover by 500 million euros
The Belgian fruit and vegetable specialist Univeg is planning a profound reorganisation with the sale of its flower and plant division, its logistics, a portion of its production and some real estate assets. A total turnover of 500 million euros is to be disinvested within the next eighteen months, leaving a company with a total turnover of 2.6 billion euros, easily to be valued. The assessment of the value is important as majority shareholder, British investment company CVC Capital, has decided to withdraw from the group. Founder and chairman Hein Deprez plans to buy back a part of the production division of Univeg with new partners probably involved. The reorganisation has been conceived by the current Univeg CEO Theo De Kool after a large number of acquisitions had turned the group vulnerable during the latest crisis. 2011 will probably become the third loss-bearing year in a row. One month after De Kool's appointment, the EHEC crisis caused by the bacterial contamination of vegetables took its toll in Germany with a large number of mortal victims. The crisis had a serious impact on the sales at Univeg. De Kool’s decision to keep only the profitable divisions within the Univeg stable is backed by CVC Capital, but deviates from the strategy of chairman and minority shareholder Hein Deprez. The latter has always advocated vertical integration, which left room for control on the entire supply chain, including the vegetable and fruit production itself, which is crucial to ensure food safety. Deprez however understands the view held by CVC Capital: “Financial partners are not interested in vegetable and fruit production. Our competitors have also focused on trade activity. Chiquita, Dole and TotalProduce have all sold massive parts of their production.” Agricultural land planted with orchards that only start to become profitable after six years reduces the value of the group. It therefore makes sense that CVC, a shareholder since 2006, wants to abandon production. Deprez himself is however not planning to give up fruit and vegetable production and hopes to buy out a portion of Univeg Fruitpartners. Deprez made a number of significant takeovers with Univeg. In 2004 he purchased Hot Cuisine, the pre-prepared meals of Carestel. One year later he took over the Dutch Bakker Barendrecht and in 2006 the Italian Bocchi with its turnover of 900 million came along. The cherry on top was the takeover in 2008 of Atlanta, the German logistics division of Chiquita, with its turnover of 950 million euros. After the downsizing, Univeg will be the third biggest global player in the fruit and vegetable industry after the American multinationals Dole, boasting a 5.1 billion euros turnover, and Fresh del Monte, with its 2.64 billion euros. Chiquita and the Irish Totalproduce are more or less as big as Univeg.