Aviko Rises as Star Performer in Royal Cosun Orbit
Aviko BV, the Steenderen, Holland-headquartered producer of frozen, chilled and dehydrated french fries and other value-added potato products, performed “extremely well” in 2016, according to parent Royal Cosun. Ringing up approximately €820 million in sales, Aviko for the first time exceeded receipts generated in Royal Cosun’s sugar beet processing segment.
Breda-based Royal Cosun, in recently announcing an increase in earnings last year, reported that the projected decline in profits in sugar was offset by firmer results from other activities – especially potatoes. As such, its Suiker Unie cooperative will pay €44.15 per ton of quota beet supplied by growers during the 2016 campaign.
Consolidated turnover for the group amounted to €2 billion, the same as in 2015. Operating profit rose to €77 million – up €18 million over 2015. Net profit of €55 million was significantly higher than €46 million realized in 2015, thanks chiefly to non-recurring items.
Aviko responded decisively to the reduced availability of potatoes last year and increased its selling prices. Both the sales mix and the volume of potato specialties and fries were improved, partly by higher exports. The granulate and flake business of Aviko Rixona fared well, and the company has identified opportunities for further growth in potato activities.
With Aviko factories running at full capacity, Royal Cosun has approved plans to invest €200 million to install new processing lines and upgrade existing units over the next four years. Up to €70 million is expected to be spent this year to boost output.
The company currently processes approximately 1.6 million tons of potatoes annually at plants in Europe and Asia, which include joint ventures in China operating under the Aviko-Snow Valley banner. Sales in the PRC reportedly amounted to €40 million last year.
Meanwhile, there may be other expansion options for Aviko on the horizon. “We are still looking for opportunities for acquisition,” said Royal Cosun Chairman Robert Smith.