01 April 1999
Tomkins to sell flour mills
AFTER years of consolidation in the milling industry, British farmers will finally have another buyer for their grain. This opportunity follows a pact between the owner of Rank Hovis, Tomkins and the American owned, Archer-Daniels-Midland (ADM).
Tomkins has agreed to sell four of the six flour mills it acquired from Spillers in 1998, together with the related head office and technical facilities.
The sale of the mills at Avonmouth, Liverpool, Newcastle, and Tilbury follows the decision of the Secretary of State for Trade and Industry last autumn to uphold the recommendation of the Monopolies and mergers Commission that these four mills should be sold.
Tomkins are unable to say the value of this deal at present on the request of ADM but have disclosed that the net asset value of the business being sold was £33 million at 31 October.
But the £40 million provision against the estimated loss on disposal of these mills made in January will be sufficient, added a spokesman from Tomkins.
Traders have welcomed this sale saying that the move is better for both the trade and farmers.
The milling sector was rapidly becoming a duopoly, noted Robert Kerr of Glencore Grain.
But he remains concerned that the sale of 4 mills will be enough. “You can see what happened with oilseed rape and fertiliser in the UK. A third player is really needed.”
Its definitely a good move, said another. “Having three players in the market is definitely good news.”