Hein Deprez, chairman of major European fresh produce company Univeg, has made a sizeable personal investment to acquire 2,300ha of fruit production in Argentina belonging to the group, Eurofruit can confirm.
Coinciding with the company's recent shift in commercial strategy – a reorganisation that involves the divestment of some operations and a move in certain cases towards joint venture partnerships with producer-exporters instead of investing directly in production – Deprez has established Univeg Expofrut Argentina as a separate legal entity and signed a five-year agreement to supply Univeg itself as the preferred buyer.
While Univeg Expofrut Argentina is obliged to sell exclusively to Univeg in certain core markets, it is understood that the supplier will continue to be free to sell its own products outside the EU and North America independently.
Commenting on the deal, chief executive Theo de Kool said it should not be regarded simply as a scaling back of Univeg's operations in Argentina, where it continues to manage 3,700ha of its own.
'In fact, we have bought 20 per cent more fruit from Argentina this year compared with last year,' he said.
In an earlier statement, Univeg said it had benefited significantly from the changes made to its global strategy, specifically a greater focus on volume growth in existing markets, an exploration of emerging markets and the development of a more demand-driven model of procurement and service provision.
Reporting a 5.6 per cent increase in annual sales to €2.3bn during the first nine months of 2012, as well as a 'positive' but undisclosed net profit, the group said the improvement would prompt it to maintain its three-pronged approach, and insisted its new sourcing concept would ensure it continued to add value to the supply chain.
'Our customers want one point of contact and we find the fruit for them,' De Kool told Eurofruit. 'Despite recent reports about direct sourcing, actually not many reailers are necessarily prepared to go direct.'
Key to the shift in strategic focus has been the work done by Univeg since December 2011 to concentrate on the more profitable parts of its fruit and vegetable business in Europe and the US, while at the same time selling off other less profitable sections.
Having driven a juggernaut of venture capital investment into various parts of the fresh produce supply chain over the previous decade, Univeg decided back in late 2011 to apply the brakes by separating its service and trading operations in fruit and vegetables from its overseas production units, with the latter forming Univeg Fruit Partners as a separate legal entity.
As a result, following rapid expansion and vertical integration – particularly of fruit production in the Southern Hemisphere, over the past year the company has sought to become a more flexible operator, emerging as more of a market-based logistics service provider and category manager on the one hand, and less of a grower-exporter on the other.
New departures
The group explained that, by the end of 2012, it expected to have made several notable divestments, selling a total of nine operations as well as some real estate to bring in an additional €50m.
Included in those sell-offs are: prepared meals businesses in Belgium, Sweden and the US; three bulb companies in the Netherlands, France and the US; a 50 per cent share in a Belgian flower company; a €35m-turnover meat supplier in Belgium; and, two weeks ago, a Dutch flower business called Greenex that was once a sister company of Bocchi Group.
According to De Kool, the company's management team expects those proceeds to rise eventually to €100m, creating 'more financial room for further growth'.
While clearly some of that money will be required to pay the interest on Univeg's existing loans, the group was also at pains to underline the fact that it has continued to invest 'significantly' in its operations – reportedly spending €25m in 2011 and €18m in 2012 – and said it would continue to do so in 2013.
From its headquarters in Belgium, Univeg said it continued to see strong prospects for its complete service provision and full-range category management on behalf of retail customers.
'Univeg believes there is still significant growth potential in its core markets such as Belgium, Germany and The Netherlands,' a spokesperson said.
'France, the UK and the US are also considered markets with important growth potential. In addition, changing global fruit and vegetables flows show new geographical opportunities, for example in Asia and the Middle East.'
