EU: Malting barley trader Evergrain purchases German Grainexx

Evergrain, the malting barley trading house, has purchased rival Grainexx, boosting its presence in the important German market, and extending the consolidation wave which has extended into malt groups too, Agrimoney.com reported on January, 15.

Swiss-based Evergrain said it had acquired "all the major assets" of Germany's Grainexx, which markets some 350,000 tonnes of malting barley a year, largely in its home country, but also in other parts of Western Europe.

The deal, which is expected to close by the end of this month, will increase Evergrain's foothold in a German market which, thanks to its plethora of brewers, is a major malting barley market.

Germany, while itself sizeable barley producer, imports malting grain largely from France and the UK, but also Scandinavia.

The deal also represents Evergrain's second in less than a year, after it last February purchased a "considerable" stake in Agro Trading Europe, whose footprint stretches into eastern European countries such as Croatia, Hungary and Romania.

Evergrain, which said then that it "aims to significantly increase its global reach and traded volume over the coming years", also has footholds in Australia and Canada, important barley exporters, and China, a major import market.

And the Grainexx acquisition stokes something of a trend in malting barley trading, which saw a string of start-ups around the turn of the decade, many of which have struggled to survive in a malting barley market in which brewers' own consolidation drive has concentrated buying power.
Market rumour suggests that commodities giant Glencore has cutback European malting barley operations acquired with last year's purchase of Viterra, and is considering a sale of the Australian malt desk.

Indeed, malting barley consultancy RMI Analytics, which has long foreseen consolidation in the industry, questioned whether the Evergrain-Grainexx deal would be the last.

"Does this meant the end of consolidation, or is there is more to come?" Nikolaus Bormann, managing partner at Swiss-based RMI, said.

"The fact that we are in a highly volatile market, which means a highly risks market, suggests there may be more."

The wave of deals has extended into the malt industry too, most recently with the purchase by France's Soufflet of Brazil-based Malteria do Vale.

The deal lifted Soufflet's malting capacity above 2 mln tonnes, closing the gap on market leader Malteurop, while also giving it its first malting plant outside Europe and the former Soviet Union.

16 January, 2013