May 30, 2019

By Lynda Kiernan

Filipino private equity group Aboitiz Equity Ventures (AEV) has acquired the remaining 25 percent stake in Gold Coin Management Holdings, the largest privately owned agribusiness in Asia for $120 million.

AEV states that the deal, which was carried out through its wholly owned, food-focused subsidiary Pilmico International, aligned with its plan to “expand the Aboitiz Group’s animal feeds business within the Asia-Pacific region.”

AEV acquired the initial 75 percent controlling stake in Gold Coin from Golden Springs Group in July of last year for $334 million, placing a value of $550 million on the company at the time.

At the time, Pilmico President and CEO Sabin M. Abioiz said, “ASEAN’s market size of 500 million will bring many opportunities to expand our customer base. This acquisition serves as a platform towards achieving Pilmico’s strategy to grow our core feed milling business beyond ASEAN and now across Asia. This acquisition will add three million metric tons of volume, which quadruples our overall feeds production capacity.”

Founded in 1953 in Singapore, Gold Coin is the largest animal feed producer in Asia with 21 production facilities across 11 countries. Its product line includes aquaculture feed, hatchery feed, livestock feed, premixes, compound feed, and concentrates, and with a combined annual milling capacity of 3.1 million tons, the company generated net revenues of $751 million in 2017 with an EBITDA of $44 million.

This deal marks Pilmico’s largest investment made in the Asia-Pacific geography since it first expanded its reach beyond the Philippines in 2014 when it acquired a majority stake in Vietnam’s Vinh Hoan Feeds, one of the largest aquafeed players in the country. In 2017, it raised its stake in the venture to 85 percent, and also acquired a 70 percent stake in Eurofeed, another major animal feed producer.

The global animal feed processing market is forecast to grow to a value of $26.62 billion by 2023, according to Markets and Markets. This growth is being driven by higher consumer nutritional and health awareness, higher integration of technology in the sector, and rising global demand. Geographically, this demand is dominated by the Asia-Pacific region, which led the world in feed processing in 2017, and will serve as a prime market for expansion.

Meanwhile, the global aquafeed market is expected to grow at a CAGR of 9.9 percent, from a value of $102.87 billion in 2017 to $172.56 billion by 2022. Rising global populations and increasing wealth – particularly in emerging economies – along with diminishing wild fish numbers have put pressure on the aquaculture industry to fill the gap in supply. This pressure has also filtered down to the aquaculture feed category. Broken down by ingredient, Markets and Markets forecasts that soybeans will account for the largest share, with the EU being the fastest growing geographical market over the time period to 2022.

With such strong market forecasts at its back, AEV said that it plans to invest a further $200 million (financed by a combination of loans and self-generated capital) over the coming two to three years for the expansion and upgrading of the Gold Coin facilities.

-Lynda Kiernan