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French poultry firm LDC forms alliance with Sofiproteol

October 20, 2014
Consumer Packaged Goods
(Reuters) – French poultry group LDC SA announced an alliance with agricultural group Sofiproteol on Friday in an move to become more competitive and stem rising imports in its home market.
 
LDC, which had sales of 3 billion euros ($3.8 billion) in its 2013/14 financial year, will acquire five poultry production sites from Sofiproteol in Brittany with sales of 310 million euros, which will be integrated into a new regional subsidiary called Societe Bretonne de Volaille.
 
LDC will also acquire another site in central France from Sofiproteol and plans to invest 100 million euros over five years in the six plants, the companies said.
 
The alliance is a latest turn in the restructuring of the French poultry industry, which has been hurt both by cheaper imports from other European Union countries and also the phasing out of EU export subsidies.
 
“Our main objective is to reconquer the French market,” LDC Chief Executive Denis Lambert said during a call with journalists, stressing that he wanted to “go and chase the 40 percent of poultry that is imported”.
 
Sofiproteol’s Sanders division will acquire non-poultry animal-feed processing activities from LDC and will also supply LDC with poultry feed.
 
LDC will pay cash for the sites it is acquiring, while Sofiproteol is to take a small stake in LDC and obtain one seat on its supervisory board. The companies declined to disclose figures for the transactions.
 
Sofiproteol, which is controlled by French oilseed farmers, operates diverse activities in the farming sector. Its livestock and food branch posted about 1.9 billion euros in sales in 2013 out of group revenue of 7 billion.
 
Elsewhere in the French poultry market, export-focused manufacturer Doux is emerging from a period of court administration, while smaller exporter Tilly-Sabco is currently in liquidation.
 
(1 US dollar = 0.7842 euro) (Reporting by Gus Trompiz; editing by Jane Baird)

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