The meat sector is one of the largest Spanish industries. It is considered the fourth largest in terms of GDP generated, after automotive, oil and hydrocarbons, and electricity generation. But, compared to these markets in which the business is shared among very few companies, the meat sector appears as a hyperfragmented universe comprising more than 3,000 companies, distributed throughout the national geography. In this scenario there is room for small local firms and also for large business groups, among them the largest in Europe, some of which are world leaders in their activity. It is an atomised sector, but, for that reason, it is highly suitable for investments to purchase assets and companies with the potential for growth.
There is, therefore, a huge potential in this regard. Is the meat market consolidating? There is no doubt this is occurring at a steady pace, although it seems to be accelerating recently. Emblematic companies such as Cárnicas Villar changed hands in 2018. And in 2017 there were also other purchases of sole proprietorships, such as Casademont and Pamplonica. There were a total of 12 changes in ownership and shareholding last year, as compiled by Alimarket Gran Consumo, as can be seen in the attached table. Among them, the 7 related to the pork meat segment stand out along with the 3 linked to the Iberian pork products market.Costa Group, a new face among the largest companies.The main protagonist in these actions is the Lleida holding company Vall Companys, which continues to grow in size and is already positioned as the third largest group in the meat sector by turnover, with about €1.65 billion in 2017, behind Campofrío - owned by the Mexican company Sigma - and the cooperative corporation Bon Àrea. But other groups are shaping up and showing their ambition to grow, such as Cañigueral from Girona, Jorge from Zaragoza, and Costa from Huesca. The latter, with a background in livestock and feed, has expanded vertically to cover the entire production cycle by taking over companies and assets. Thus, since 2016, it has bought the cutting plant Toni Josep - renamed as Costa Food Meat -, the factory and brands of Casademont and, at the end of 2018, at a single stroke it purchased the Soria-based Industrias Cárnicas Villar, a company traditionally specialised in cured products (ham and sausages) and with a significant presence in the Iberian ham business. With this operation, Costa has become one of the largest groups in the meat sector, with a turnover of over €680m in 2018, 3,500 jobs generated and a forecast of €800m for 2019. As Jorge Costa, CEO of the group, explained in an interview with Alimarket: "In this business, either you are small or you are big, and we are no longer small," which is a real statement of intent.
Meanwhile, the Lleida-based Vall Companys took advantage of last year to gain market share in new businesses and expand its regional presence. It acquired minority interests in Extrapernil del Montseny (with brands 'Erre de Vic 1952' and 'Exalunt'), the Mas Crespo business and cutting plant - which allows it to cover the Balearic Islands - and Embutidos Rodríguez, the Leon-based slaughterhouse and processed meat products manufacturer. A takeover of the initial equity position that could be extended, as has happened in some of the acquisitions it made a short time before, such as Naturíber the ham dryer, the Dolz España poultry farm and the Rubiato Paredes cutting plant. In particular, buying into Extrapernil marks for Vall Companys its decisive appearance in the quality cooked meat products category, in which it only has the limited Frimancha catalogue. This thus complements its strong foray into the cured and Iberian ham markets, with companies including Duríber Ham and Silencio Jabugo (the new name of Industrias Reunidas de Jabugo).Ambition to growThese business transactions give a clear insight into how the groups that are beginning to stand out in the meat sector are being configured. Another of them is Cañigueral, which last year took over the modern meat production facilities of Frigorífics de L'Empordá (Terfrisa), in Vilamalla (Girona), as part of the liquidation process of the latter. This acquisition is in addition to the old Martínez Loriente meat centre in Cheste (Valencia), through its new company Frescos Delisano, and that of Far Jamón Serrano, both completed in 2016. The latter also allowed it to diversify its business areas and enter the cured ham export market.
The Aragonese group Jorge, meanwhile, strengthened its position in the Catalan pork market in 2018 with the purchase of MarcJoan Import Export, Santa Eugènia de Berga (Barcelona), which has specialised in services from ham cutting and packaging to outsourced ham drying. Only one year before, it had already made another heavy investment when acquiring a meat plant, this one with a slaughterhouse, which Carniches Solá had in Mollerussa (Lleida).
Meanwhile, another company that is gradually increasing its business network is Cuenca Incarlopsa. If in 2016 it got underway, within the sale of assets in Martínez Loriente - formerly a meat supplier to Mercadona -, with the operation of one of its plants in Tarancón (Cuenca), in 2018 it was consolidated with the purchase of the plant of Huelva-based Jamones y Embutidos Jabugo, located in the town of El Repilado, as part of the liquidation and sale process of the latter's production unit. Incarlopsa has done the same with its second facility in the Iberian ham products market - it is also Mercadona's supplier in this category - after buying another factory in Salamanca five years ago.Iberian InvasionSo attractive is the business in Iberian meat that its activity has begun to be carried out, however contradictory it may seem, beyond the limits of the Iberian Peninsula. And it is Incarlopsa who is going to take charge of this. At the beginning of 2019, it announced the acquisition of 67% of the Texas-based company Acornseekers, which owns a 100% pure acorn-fed Iberian pig farm and markets fresh meat. Acornseekers was founded four years ago by Spanish businessmen Sergio Marsal and Manuel Murga, and with the entry of Incarlopsa into the project, it plans to build a ham factory and dryer in the USA, "that allows the production of quality Iberian products for later marketing on the American continent". It would be the first Iberian meat processing factory outside the Iberia peninsula.
Source: Alimarket Gran Consumo