Vion to separate food and ingredients activities

Dutch food company Vion is set to separate its food and ingredients businesses, as part of its efforts to achieve full operational, organisational and legal independence for the entities.

The move comes after the company’s divestments of food activities in the UK and the sale of a number of non-core business activities including Oerlemans Foods.

Vion stated that the latest decision has been taken as both the food and ingredients businesses serve their own markets and clients, face their own challenges and adhere to their own strategies.

In addition, previous acquisitions and growth strategy in the food business over the past decade have failed to deliver the expected results. These factors, combined with on-going poor market conditions in the European pork sector, have led to the company’s decision.

Following the separation, the independent food division will focus on achieving considerable restoration of results through reorganisations in the Netherlands and Germany, while the ingredients segment will seek a new a shareholder to help achieve further development and growth, according to the company.

Currently, the company is in talks with banks over independent financial structures for both food and ingredients.

VION Food, which employs approximately 14,000 people, focuses on the pork and beef markets in the Netherlands and Germany.

VION Ingredients is active with a wide range of companies which manufacture products such as gelatine, proteins and fats from slaughterhouse by-products, and employs approximately 6,000 people.

The products are marketed to the pharmaceutical, cosmetics, food, feed, energy and technology sectors.

The separation of food and ingredients activities is in line with the company’s strategies, announced on 19 November 2012 and 23 January 2013, which means the company will have a strong financial base and will be further reduced in size.

In November 2012, Vion announced that it will be returning to its core markets, focusing entirely on its food operations in the Netherlands and Germany and on its global ingredients business.

On 23 January, the company announced proposed plans to restructure the organisation of VION Head Office in Eindhoven and VION ICT Services in the Netherlands.

Following the separation, the ingredients division will continue to be led by Vion’s CEO Dirk Kloosterboer, while the food division will be led by interim CEO Stefaan Vansteenkiste until a new CEO is appointed in the near future.