German multinational sets sights on the Netherlands
With a turnover of 16 billion Euro, the German group represents a major player in the international market. Its impressive turnover is achieved in three sectors: agriculture, energy and building materials.
By far the largest part of the turnover is generated in agriculture, 10.8 billion or 67 percent of total sales. Energy accounts for 3.5 billion (22%) and building materials for 1.7 billion (11%). The agricultural part of the multinational company is divided into three parts: agricultural trade, agricultural equipment and fruit. Under the first category falls trade in grains, seeds and crop protection. Agricultural buildings, equipment and spare parts falls under the second category. The fruit trade consists of top, soft and stonefruit, tropical fruit and fruit vegetables.
Originated due to hyperinflation
The origins of the current BayWa go back to the 20s of the last century. Germany was ravaged by hyperinflation, which forced Bayerische Zentral-Darlehenskasse, one of the most influential cooperatives in Bavaria, to separate the trading arm of the company from the financial division. BayWa, an acronym for Bayerische Warenvermittlung Landwirtschaftlicher Genossenschaften, saw the light as a result, and despite the difficult economic conditions, the company managed to grow.
Post-war growth
The German economy was in tatters after the war. German agriculture was only able to provide 35 percent of the population with food. For the import of potatoes, BayWa looked to the Netherlands, Denmark and the United States. During the 50s, the economy continued to grow, and Germany became increasingly able to feed its own population, in turn allowing BayWa to expand further. In the new millennium, BayWa merged with WLZ Stuttgart. The merger pushes the fruit segment to bigger heights.
Recent acquisitions
Since 2009, the company has invested in the acquisition of several companies worldwide. In that year, the focus shifted to renewable energy. In 2012, Baywa bought a large majority in New Zealand fruit trader Turners & Growers. A year later, Baywa acquired Dutch Cefetra and German Bohnhorst Agrarhandel.
Acreages and volumes
With the acquisition of Turners & Growers, Baywa gained 5200 hectares of top fruit. The New Zealand acreage covers 2200 hectares. In addition, the company has 3000 hectares in overseas areas. On average, the harvest of is about 100,000 tons. Another part of Baywa, also active in top fruit, is the German Obst Vom Bodensee Vertriebs. It has an acreage of 3,300 hectares and an average yield of 80,000 tons. BayWa markets, among others, top fruit brands Kanzi, Greenstar, Jazz and Envy.
In terms of volume, the top fruit segment is by far the largest with 180.7 kilotons in 2013. Second is tropical fruit with 44.5 kilotons. In total, the fruit trade was good for 262.2 kilotons. The other parts of the agricultural sector, agricultural trade and agricultural machinery were, accounted for sales of over 30,000 kilotons and 6600 kilotons respectively (in 2013).
Next stop Netherlands?
Generally, BayWa is looking for ways to grow internationally, paying special attention to emerging economies. Additionally, BayWa’s agricultural branch wants access to international markets in neighbouring countries, like the Netherlands. The company wants to get a foothold in the market for agricultural machinery and equipment. With the exception of Ceferta, a Dutch agricultural trading company, BayWa isn’t yet active in the Dutch fruit and vegetable trade, but with the expansion strategy of the company and the fact that the Netherlands is specifically mentioned as an attractive market, it seems only a matter of time before this changes.