25 July 1997

Continental backs out

RESTRUCTURING of the animal feed business continued this week, with the withdrawal from the trade of feedstuffs importer, Continental.

The company has been handling over 200,000t a year through its Southampton terminal, supplying compounders, merchants and farmers in the south of England with a range of raw materials.

That business will now be undertaken by shipper/merchant Cargill, which has signed a one year throughput agreement with Conti. Under this, Cargill will have responsibility for importing the feedstuffs and distributing them to the supply trade. Conti will do the discharge, storage and loading onto lorries at Southampton on a fixed fee basis.

"Its not been a good year for animal feeds – the nature of the business has changed," said Conti UK general manager, Stephen Maxwell. In addition to falling demand, there was a trend for major compounders to book supplies on a multi-mill basis rather than delivery to one particular site. Based in Southampton, it was difficult for Conti to give this national cover.

Furthermore, the Southampton operation no longer offered the economies of scale sought by Contis US parent company, which was more interested in the vibrant feed markets of the Pacific Rim.

The agreement will strengthen Cargills hand, which already has import facilties at Bristol and Liverpool. The company also has an option to buy all the feed activities from Conti at a later date.n