Royal Cosun, the Breda, Netherlands-headquartered growers’ cooperative, has reported a considerably better group results in 2019 than in 2018. This is attributed principally to value-added potato producer member Aviko’s strong operating profit coupled with a gradual recovery in sugar prices that benefited its Suiker Unie unit at the end of 2019.
Consolidated turnover amounted to €2,046 billion, the same as in 2018. Suiker Unie was confronted with weaker sugar prices in combination with lower volumes, both inside and outside Europe. Aviko saw a strong increase in its sales. Duynie and Sensus’s turnover was higher, SVZ’s was lower.
Cosun’s operating profit before members’ bonus rose from €17 million in 2018 to €64 million in 2019. Operating profit before depreciation, amortization and the members’ bonus (EBITDA) rose from €146 million in the previous year to €182 million. The members’ bonus distributed to the growers amounted to €39 million, compared with €14 million in 2018.
Aviko achieved its highest operating profit ever in 2019, as a limited potato harvest in 2018 lifted selling prices. The Steenderen-headquartered company also benefited from the growing global demand for frozen french fries and other potato products. Demand is rising by about 4% per annum on the back of greater worldwide prosperity.
Aviko Rixona is benefiting from the higher global demand for potato snacks. To continue to meet customers’ orders, a new factory is being built in Poperinge, Belgium, to produce frozen fries and potato flakes.
Acquision in China
Elsewhere on the international potato front, Aviko recently sealed a deal to buy 90% of frozen french fry manufacturer Hongyuan Louis in Xilinhot, which is based north of Bashang in China. The acquisition includes a factory with an annual capacity of 50,000 tons, potato storage facilities, a semi-automatic coldstore, boiler house, wastewater treatment plant and approximately 170 employees.
Hongyuan Agriculture will stay involved as a 10% shareholder and closely cooperate with Aviko on potato sourcing and other matters.
Aviko has been active in China since 2007 with production activities in Gansu. In recent years, it has successfully established a strong commercial distribution network for frozen potato products throughout the PRC directed from a sales head office in Shanghai.
“With an average market growth for frozen fries of 10% per year, China is of major strategic importance to us,” said Aviko Group CEO Chris Deen. “The acquisition of Hongyuan Louis is just the perfect opportunity to complement our already strong Chinese commercial position with modern local production facilities. This deal will help us gain and sustain a prominent market position in China.”
Royal Cosun CEO Albert Markusse added: “This acquisition fits perfectly in with our ambition to have a leading position in plant-based solutions. We believe that plant-based is key to a sustainable future for next generations. That is why we are committed to the growth strategy of Aviko, taking full advantage of the growing global markets for potato products.”
With activities in more than 110 countries and production locations in the Netherlands, Germany, Belgium, Sweden, Poland and China, Aviko ranks as the fourth largest value-added potato products manufacturer in the world.