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12 April, 2006 - 09:46 By Staff Reporter

Viking buyer plans global offensive

Two East of England companies are expected to form the UK cornerstone of a five year assault on the world’s hi-tech food processing industry by Icelandic company Marel hf following its £13.5 million acquisition of Norwich-based AEW Thurne and Harwich’s Delford Sortaweigh. Two East of England companies are expected to form the UK cornerstone of a five year assault on the world’s hi-tech food processing industry by Icelandic company Marel hf following its £13.5 million acquisition of Norwich-based AEW Thurne and Harwich’s Delford Sortaweigh.

The purchase from the AEW Delford Group is the first by Marel in an aggressive global consolidation strategy that is intended to expand its four per cent worldwide market share to 20 per cent, tripling annual revenues over the next three to five years.

The two companies will trade as AEW Delford Systems Ltd with all 290 staff retained across the Harwich and Norwich manufacturing centres as well as in its two US sales & marketing subsidiaries and French branch.

Marel believes it is only a matter of time before the meat, fish and poultry processing market is dominated by one to three market leaders with a substantial number of smaller players. It intends to make this the first in a series of strategic acquisitions of companies with growth potential and strong synergies.

AEW Delford’s Tony Ambrose said: “Initially there will be a settling period as Marel picks up a deeper knowledge of our sector, but then I expect them to pick it up very quickly. 25 per cent of Marel’s sales are for products less than two year’s old. This is a very positive move for us.”

Hordur Arnarson, Marel chief executive, said: “AEW Thurne and Delford Sorta-weigh are well known for their high quality processing products, for example high-speed slicing, portion control and shaping, weigh price labelling and robotic systems.

“These products are an excellent addition to Marel’s product portfolio. Customers now have a broader, more in-depth range of solutions. In addition, we expect sales of the AEW and Delford products to increase significantly through our global sales network.”

AEW Delford turned over £26.9 million in 2005 from its main markets in the UK, USA, France and the Netherlands.

Marel’s R & D director, Asgeir Asgeirsson, has been appointed CEO of AEW Delford Systems, effective immediately. He said: “Both Marel and AEW Delford Systems have ambitious technical programs that have proven themselves with excellent products.

“This will be further strengthened by merging activities. There is strength in size, especially when the company vision is streamlined and focused. We intend to play a major role in Marel´s overall expansion plan.”

As well as the product synergies, Marel expects to benefit from the transfer of know-how between product categories.

This will increase efficiency in R & D, where the company will also pump in more investment to achieve its ambition of becoming an international leader in the development and marketing of hi-tech processing equipment. Marel estimates the market for equipment for meat, fish and poultry to be Euros 3 billion with the biggest international companies taking an eight to nine per cent market share while Marel’s own share lies between 4.0 and 4.5 per cent.

However, Marel is catching. While industry growth over the last 10 years has been around five per cent, Marel has grown 26 per cent and expects to continue to outstrip industry growth of 5.6 per cent over the next five years.

Founded in 1983, Marel comprises three principal companies labelled “Partners in Processing”: Marel hf, Carnitech and AEW Delford Systems along with 16 other subsidiaries in 14 countries and branch offices in five countries.

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