Game changing move for Aryzta

Two acquisitions in one week in June, worth $1.1bn, looks like a game-changing move by Aryzta. The company, which has its origins in the
farmer-owned IAWS, bought Fresh Start Bakeries for $900m and pizza supplier Great Kitchens for $180m. FSB has 29 manufacturing operations in the US, Canada, Germany, Poland, Sweden, Spain, Brazil, Australia and New Zealand, as well as joint ventures in Chile and Guatamala. Sales for the two businesses total $1.03bn per annum with margins running at over 10 per cent. Turnover in Aryzta’s existing businesses should come in just short of €3bn when its financial year ends on July 31. Despite heavy hits on Aryzta’s sales, especially in the first two quarters, the expectations are that the new acquisitions will drive sales and profi ts in the year ahead, both by providing access to new markets and introducing new products such as burger buns and ciaba a bread produced by Fresh Start. The Stock Market approved, lifting Aryzta’s share price by 8 per cent after the acquisition announcement.

Agriculture to remain at or above levels for next decade

Agriculture prices will remain at or above 2010 levels for the next decade. This is according to the Organisation for Economic Cooperation and Development (OECD), which represents the world’s major economies. It says prices will not fall back to the average of the 10 years before the big price surge in 2007 and 2008. It says these high prices could pose a risk to global food security, as they will be beyond the incomes of people in many developing countries. Despite the price increase it says the EU will remain dependent on food imports.