Belgium/France/USA: Boortmalt said to acquire Cargill Malt

Boortmalt is said to acquire Cargill Malt according to unconfirmed sources in the French agricultural grain trade. As reported in September, Cargill, the largest privately held corporation in the United States that owns the world’s third-largest malting group with a combined malting capacity of about 1.55 million tons, explored options to exit the malt business (inside.beer, 6.9.2018). Because of the value of the business, which is estimated at more than $1 billion and the specific characteristics of the malting business, only few companies come into consideration as potential buyers.

As reported by The Australian in October, Australian grain handler GrainCorp, which diversified into malting when it bought United Malt Holdings in 2009 and currently ranks 4 in size of the world’s leading malting companies, explored options to buy Cargill Malt as a whole (inside.beer, 12.10.2018). However, two weeks ago GrainCorp received a takeover bid itself (inside.beer, 4.12.2018) and seems to have dropped out of the list of potential bidders.

Following the unconfirmed reports, Boortmalt and Cargill are now ready to sign the purchase agreement which would make Boortmalt the clear number one in the worldwide malt business with a combined tonnage of about 2.9 million tons of malt.

The other two major French malting groups, Malteries Soufflet and Malteurop, are having both malting capacities of about 2.2 million tons each. Soufflet owns 27 maltings worldwide and Malteuop 26.

In comparison, Boortmalt is currently much smaller and is geographically less diversified. It operates today 10 malting plants in Europe spread in seven countries. By its own account, the company is the 5th largest malt producer in the world with a yearly malting capacity of 1.1 million tons.

The group was missing so far an international footprint outside of Europe. This would change after a supposed purchase of Cargill Malt. The takeover target complements perfectly the business of Boortmalt as it holds a dominant market position in Australia, Argentina and Canada. The United States, which was another important market for Cargill has lost its great significance when Cargill closed in October its gigantic 440,000 t malting site in Spiritwood, USA. The company is now left with only a small 30,000 t malting in one of the biggest beer markets in the world. (inside.beer, 17.4.2018)

Boortmalt is part of Group Axéréal, France's biggest grain cooperative and one of the country’s major grain handlers. This year, Axéréal has collected about five million tons of grain from its 13,000 cooperative members in the country's main breadbasket – the vast Centre Val de Loire region stretching from south of Paris to north of Auvergne.

As outlined on Axéréal’s website the company pursues a clear growth strategy for its malting business. “Boortmalt, the entity on which our malt business is founded, is broadening its horizons to go global by investing in new locations to capture market growth.”

Boortmalt was founded in 1927 by Belgian family Thirionet in Boortmeerbek about half the way between Brussels and Antwerp, Belgium. The name of the company derives from the initial location of the malting plant. In order to better serve the international brewing industry the company resettled later to its current location in the harbor of Antwerp. In 2004, the Thirionet family sold the business to French agrigroup Axéréal, which was running at that time its sole malting Malteries Franco-Suisses in Issoudun, in the center of France. The favorable export location in the harbor of Antwerp helped to grow the group from being a regional supplier of malt to become one of the leading malting companies in the world. "To exist against the three world leaders Soufflet, Malteurop and Cargill, we must be very agile," said Jean-François Loiseau, Chairman of the Board of Axéréal already back in 2016.

In the last years the biggest malting groups have aggressively pursued a growth strategy and expanded existing facilities or opened new ones.

At the end of September, Boortmalt has started up its fourth malting tower, at the port of Antwerp in Belgium, which made Antwerp with 470,000 t the largest single malting site in the world (inside.beer, 8.2.2017). The company has also reinforced its Irish site with an additional 30,000 t of malting capacity (inside.beer, 9.11.2017) and is embarking on a 60.000 t malting plant project on a greenfield site in Ethiopia (inside.beer, 8.2.2017).

Malteurop, the other big international malting group that belongs to a French cooperative, has inaugurated  three months ago the huge expansion of its only malting in Australia. The plant in Geelong was enlarged within the last two years from 80,000 to 200,000 tons, which makes it the second biggest malting plant in Australia. (inside.beer, 28.9.2018)

Soufllet, besides Cargill the only privately owned group in the top list of international maltings, has recently bought its first production unit in India.(inside.beer, 29.10.2016). In addition  the company announced to build earlier – like Boortmalt - a new 60,000 t malthouse in Ethiopia (inside.beer, 13.6.2018) and bought last year a remaining stake of 30% in its malting site in St.Petersburg, Russia (inside.beer, 29.5.2017).

 

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