Barclays praised in Produce World expansion
Peterborough-based fresh produce grower and supplier, Produce World Group, is to embark on a major organic growth strategy focusing on the new Spanish operations brought into the company following recent completion of its largest acquisition to date.
The deal to acquire Marshalls Holdings Ltd has already increased the group’s turnover by almost 90 per cent, lifting it to £230m, and could soon take it past £300m if the Spain facility is fully exploited. Produce World has already grown by around 50 per cent in the last two years both organically and through various acquisitions and mergers, lifting employee numbers to 650 and turnover to £130m. Not only does the purchase increase revenues and employee numbers – now at over 1,200 permanent staff – making it one of the foremost growers and suppliers of fresh produce in the UK, but it also builds on Produce World’s product range by taking them into an extensive Brassica portfolio of conventional and organic products. The Marshalls Holdings group of companies includes Marshall Bros (Butterwick) Ltd, which has two sites at Butterwick and Kirton near Boston in the UK, and a 76 per cent holding in Agromark SA, which is based in San Javier, Murcia, Spain. As well as a substantial growing business, Marshalls has its own distribution fleet. Nigel Clare has been appointed managing director of Marshalls with the support of David Marshall and Philip Effingham, and will operate the company as a separate entity within the Produce World Group. Marshalls has invested in improved infrastructure over recent months. The Marshall Bros’ Kirton site underwent a £400,000 ‘Medium Care’ development earlier this year which represents another extension to Its conventional and organic range and allows the firm to pack washed and ready to eat products such as spinach, cauliflower florets, broccoli florets, kale and sliced cabbage lines. The Agromark operation is due to move into a new site soon. An 86,000 sq ft state of the art packing and cold storage operation that will enable the chill of a wide range of brassicas in less than three hours. “The task in hand is to integrate the Marshalls business,” said Produce World Group finance director, Ian Batkin. “At the moment we are more interested in organic growth. The acquisition takes turnover to £230m and we envisage growth to be in order of 5-10 per cent per annum. “Agromark’s new facility needs to be properly used. There are great opportunities to make more use of that facility; it does a lot for Marshalls, but we want to extend the scope and move into fruit. “At the moment the site just concentrates on Brassica: What Marshalls does in the summer in the UK, Agromark does in the winter so the site is very busy in the winter, but quiet in the summer. 90 per cent of its turnover is generated in October to May, 10 per cent June to September. We aim to make it busier in the summer when it has a lot of spare capacity.” Produce World and Marshalls have extensive family farming histories in fresh produce and, in line with market trends, the consolidation of their joint strengths is expected to secure future growth and sustained supply in a highly competitive marketplace. The enlarged group’s product range will cover most UK produced vegetables as well as a large range of worldwide imported fruit and vegetables. The partnership will create more opportunities for sustainability as well as offering diversification and crop rotation. William Burgess, Produce World’s chief executive officer, said: “Marshalls operates in a different product category to us. This is not a synergy based deal; we would look to increase our portfolio. “We are a family business and are looking to grow in a consolidating market and will evaluate opportunities as they arise, though if this deal goes through, the focus is consolidating the business and organic growth. “There is very strong growth in the fresh organic produce market, growing at double digit figures still.” The acquisition was part-funded by Barclays.“Barclays are our bank and we have good relations with them through John Laud,” said Batkin. “We can be open and talk about our plans with them and we like them because they focus on our sector and understand it. “They provided some funding for the acquisition and were involved from the beginning and were useful to bounce things off because of their experience in the sector.” Produce World’s recent history has been one of growth through acquisition, with RB Organic, British & Brazilian Produce, Isleham Fresh Produce Ltd, Rustler Produce, Las Lomas, Solanum and Briess Produce all forming part of the group prior to the Marshalls acquisition. Spread across the UK and now with two Spanish bases, Produce World believes that core to its success is its people and will continue to invest heavily in training and development and in personal development plans. The merged group will also fully benefit from improved operational efficiency in areas such as procurement, IT, marketing and supply chain management. “There are some skill benefits from being bigger as well as the need to maximise efficiencies,” said Batkin. “We have good people, which is important, and they have more opportunities for promotion in the wider group.”