Lallemand said the benefits for it in the deal include securing economies of scale in distribution and gaining long term access to New Zealand's livestock and feed sector.
The timing of the merger, which is effective from 1 June 2016, was critical said Tim Pollock, director of strategic development, Lallemand Animal Nutrition. The May and June period is winter in New Zealand and is traditionally a quieter time of year. “We wanted to ensure merger is settled in before spring calving in August,” he told us.
Nutritech, which produces a nutrition range as well as forage additives, liquid fertilizers and maize seeds, has manufacturing capability in Auckland and Rolleston. In terms of its supply approach, it targets both farmers directly as well as the feed manufacturing sector.
That company had been under family ownership for three generations until a management buyout in April 2010.
Lallemand acquired Vitec in 2008. It distributes Lallemand’s portfolio of yeasts and forage additives, as well palatants and trace minerals, premixes, by-pass fats, ionophores, minerals, rumen modifiers and other functional supplements.
The combined business, which will be called Nutritech International Limited, will remain majority controlled and owned by its New Zealand based management team and shareholders, with Lallemand having a minority strategic shareholding.
Tony Manning, currently managing director of Nutritech, is to become the CEO of the merged operations.
Dairy sector challenges
Pollock said, despite the current challenging market environment for dairy producers, he is confident the merged entity will be able to help the New Zealand livestock producers retain their competitive position within the global livestock industry.
Asked whether further mergers are likely in that region to deal more effectively with dairy sector volatility, Pollock said: “The New Zealand feed industry is quite small with less than 1m MT of compound and blended feeds produced per annum so we expect there will be further consolidation of the key players.”