Leading egg firms announce merger
Leading egg firms announce merger
By Philip Clarke
TWO of the UKs leading egg producers are planning to join forces, to help them compete in an increasingly global market.
Thames Valley Eggs and Stonegate Farmers, with a combined turnover of £160m, have reached provisional agreement for a merger, subject to due diligence and some further negotiation.
Stonegate Farmers chairman Andrew Parker, said this week that the UK egg market was becoming increasingly competitive. Continental producers, for example, were continuing to feed meat and bonemeal in their rations, giving them a £4/t advantage. And US producers enjoyed much softer legislation on cage sizes, giving them a lower cost base.
The arrival of cheap American eggs in the EU last year had contributed to a 20% price collapse from which the industry had still not recovered.
Against this background, the two companies have had to seek efficiency gains, while also providing the scale of operation needed to form partnerships with retailers.
Future investment will focus on the processed and liquid egg sector, added Mr Parker, as this is the only growth sector of the market.
The enlarged group will have about a 20% market share, making it the largest supplier in the UK, ahead of Day Lay Foods and Deans Farm. A final deal is expected by the end of March.
Stonegate Farmers and Thames Valley Eggs will be looking for efficiency gains, says Andrew Parker (inset).