The number of grain-based foods companies outside of North America posting strong returns took a step back in 2015, as a little more than half of the 39 companies tracked by Milling & Baking News, sister publication of World Grain, recorded year-over-year decreases in share price. Of the 39 companies, 20 posted decreases and 19 posted increases during the year. By comparison, 25 companies recorded year-over-year increases in share price in 2014, and 32 companies posted year-over-year gains in 2013. The declines primarily could be traced to companies operating in Africa, Egypt and Indonesia, while strength was evident in Australia, France, Ireland and Japan.
On the London Stock Exchange, Associated British Foods finished the year at 3342p, up 6% from 3153p in 2014 and up 37% from 2445p in 2013. George Weston, chief executive officer of ABF, in the company’s annual report said he was “pleased” with the trading performance and the progress made by each of ABF’s businesses during 2015. “Grocery, Agriculture, Ingredients and Retail all increased their profits,” he said. “Sugar profit was, as expected, substantially lower than last year as a result of much weaker euro-denominated E.U. sugar prices, but the business made great strides in reducing operating costs.”
Carr’s Milling Industries PLC changed its name to Carr’s Group PLC during the early part of 2015 and shifted its ticker symbol to CARR from CRM. Carr’s Group’s share price closed at 154p in 2015 (there was no comparison to 2014). The company said the name change reflects the “geographic and operation diversity of the company.”
Tate & Lyle PLC, the global sweetener company, had a 52-week low of 492.2p and a high of 682.5p, but ultimately ended the year virtually unchanged at 599p, which compared with 603p in 2014. In November, the company’s top executive said he foresees three ways to strengthen its business mix over the next five years. By 2020, the company wants 70% of its profits to come from specialty food ingredients, 30% of its specialty food ingredients sales to come from Asia Pacific and Latin America, and $200 million of sales to come from new products. Javed Ahmed, chief executive of London-based Tate & Lyle, in a Nov. 5 earnings call, said the percentage of profits from specialty food ingredients increased to 47% in fiscal year 2015 from 32% in fiscal year 2010. Now the goal is 70% of profits by 2020.
Premier Foods, the U.K.’s largest food producer, finished 2015 at 39.25p, up 23% from 32p in 2014, but down 69% from 125p in 2013. In November, Premier Foods entered into an exclusive partnership with renowned baker Paul Hollywood to launch a range of bread, savory and sweet mixes designed to make artisanal baking accessible to consumers. The range of 12 bread, savory and sweet mixes will be available on shelves beginning in February.
Finsbury Food Group PLC, a U.K.-based maker of cake, bread and gluten-free bakery goods, closed 2015 at 113p, up 88% from 60p in 2014. The company continued to benefit from its October 2014 acquisition of morning goods and specialty bread supplier Fletchers Group, which nearly doubled Finsbury’s total sales.
The three leading U.K. retail chains sustained mixed share price moves during the past year. Tesco, the leader in U.K. food retailing, closed at 149.5p, down 21% from 189p a year ago. Also moving down during the year was Marks & Spencer, which finished the year at 452.4p, down 6% from 478.8p. Sainsbury, PLC, meanwhile, closed the year at 258.8p, up 5% from 246.70p.
Greencore up 24%
In Ireland, Greencore Group PLC, a European maker of convenience food and malt products, finished at 354.3p, up 24% from 286.2p in 2014. In the United States, Greencore has embarked on a “large and complex capacity expansion program,” most notably in Jacksonville, Florida, and Rhode Island. In the first half of fiscal 2015, the scale and ramp up of production volumes in Jacksonville resulted in supply chain disruption, but the issues have since been addressed and the site is now performing in line with plan, said Gary Kennedy, chairman. In the second half of fiscal 2015, Greencore commissioned a new greenfield site in Rhode Island and began the phased transfer of production from its facilities in Newburyport and Brockton, Massachusetts. The transfers were completed subsequent to year end, and the company has now fully exited both Newburyport and Brockton.
Origin Enterprises, a food and agribusiness group based in Dublin, finished the year at €7.55, down 11% from €8.45 in 2014.
In Australia, GrainCorp Ltd. closed the year at A$8.63, up 5% from A$8.25 in 2014 and up from A$8.5 in 2013. The company’s stock price fluctuated throughout the year, falling as low as A$7.67 and climbing as high as A$10.36. In mid-December, GrainCorp announced the expansion of its grain origination footprint in Canada, through the establishment of a joint venture with Zen-Noh Grain Corp., a subsidiary of major Japanese agricultural cooperative Zen-Noh (National Federation of Agricultural Cooperative Associations). GrainCorp will hold a 50% share in the joint venture, which will be based in Calgary, Alberta, and plans to operate grain receival sites across Alberta and Saskatchewan. These sites will be part of a fully integrated supply chain for the origination, marketing, storage, handling, distribution and exporting of Canadian grain and oilseed.
Agrium Inc., which acquired AWB Ltd. in December 2010, closed 2015 at C$123.67, up 31% from C$94.72 in 2014.
In France, Groupe Danone S.A., the country’s largest food and beverage company, closed 2015 at €62.28, up 14% from €54.45 in 2014. To help shape its 2020 initiative, the company in March named Lorna Davis and Pascal De Petrini to two newly created roles in the executive committee. As chief manifesto catalyst, Davis will support and coordinate the establishment of the company’s mission across Danone’s teams and communities. De Petrini joined the company as executive vice-president of strategic resource cycles to manage global sourcing organizations and lead efforts to strengthen the company’s ability to protect essential resources, such as milk, water and plastics.
In The Netherlands, Unilever, the Anglo-Dutch food and personal products business, closed 2015 at €40.11, up 24% from €32.45 in 2014, and up 37% from €29.28 in 2013. The London-based company on July 1 officially began operating baking, cooking, and spreads as a standalone unit, and also has ramped up its innovation capabilities in an effort to drive competitive top-line growth.
Corbion finished sharply higher in 2015, moving up 62% to €22.32 from €13.82.
In Switzerland, Nestle S.A., the world’s largest food company, closed at 74.55 Swiss francs, down 3% from 76.95 Swiss francs in 2014. In December, Nestle USA announced it will transition to using only cage-free eggs in all of its U.S. food products by 2020. The company said it uses approximately 20 million lbs of eggs each year to manufacture such products as Häagen-Dazs, Dreyer’s and Edy’s ice creams; Nestle Toll House cookie dough; Buitoni pasta; and Lean Cuisine and Stouffer’s frozen breakfast items.
Aryzta AG closed 2015 at 51 Swiss francs, down 34% from 76.95 Swiss francs in 2014. In late November, Aryzta said it had received positive consumer response to new concepts involving the La Brea Bakery and Otis Spunkmeyer brands, which contributed to a first-quarter revenue increase of 5.2% in its Food North America unit.
Nisshin closes up 70%
Share price movement in Japan was strong during 2015. Nisshin Seifun, the Japanese holding company that includes Nisshin Milling, Japan’s largest flour miller, closed at Y1987, up 70% from Y1170 in 2014. In August, Nisshin announced plans to add a second milling line and expand wheat and flour storage at its Rogers Foods Ltd. flour mill in Chilliwack, British Columbia, Canada. The second milling unit will have a daily capacity of 4,000 cwts of flour. When the C$36 million ($27 million) project is completed in the fall of 2017, the Chilliwack mill will have the capacity to produce 9,000 cwts of flour a day. In addition, Nisshin will be adding 110,000 bushes of wheat storage and 22,000 cwts of bulk flour storage at Chilliwack. The mill was built by Nisshin in 2005.
Nippon Flour Mills Co. Ltd. rose 62% for the year, climbing to Y869 from Y535, and Nissin Foods Holdings, a leading manufacturer of instant noodles, rose 11%, closing at Y6430.
Baking leaders Yamazaki Baking and First Baking Co. Ltd. were mixed in 2015. Yamazaki closed at Y2735, up 84% from Y1488 in 2014; First Baking, meanwhile, finished at Y116, down 13% from Y133 in 2014.
Olam International, a leading agribusiness operating from seed to shelf in 65 countries, supplying food and industrial raw materials to over 13,800 customers worldwide, finished at 1.82 Singapore dollars, down from 2.02 Singapore dollars in 2014. In October, Olam completed its acquisition of Archer Daniels Midland’s cocoa business for approximately $1.2 billion. The transaction included ADM’s cocoa processing assets, 10 warehouses, four research and development centers, the deZaan brand and a base of customer franchises. The transaction did not include ADM’s global chocolate business. The acquisition makes Olam one of the three largest cocoa processors in the world with a combined production capacity of approximately 700,000 tonnes.
Wilmar down 9%
Meanwhile, Wilmar International Ltd., which has assets in soy crushing, edible oil refining and packaging, palm plantations, palm refineries, biodiesel production, specialty fats and oleochemical fatty acids throughout Asia, experienced a moderate drop in share price, as it finished at 2.93 Singapore dollars in 2015, down 9% from 3.23 Singapore dollars in 2014.
Indonesia’s Indofood, one of the largest food producers in Asia, fell 23% to R5175, down from R6750 in 2014.
South Africa-based Tiger Brands Ltd. gave back ground in 2015, finishing at R31644, down 14% from R36806 in 2014. In December, Tiger Brands said it would sell its 65.7% stake in Tiger Branded Consumer Goods PLC, formerly Dangote Flour Mills, to Dangote Industries Ltd.
Egyptian companies engaged in flour milling were mostly lower in 2015 with exception of East Delta Flour Co., which gained 6%. Declines were incurred by Egyptian Starch, down 35%; North Cairo Flour, down 31%; South Cairo and Giza Flour Mills, down 27%; Middle Egypt Flour, down 20%; Upper Egypt Flour Co., down 13%; Middle and West Delta Flour Co., down 6%; and Alexandria Flour, down 2%.
In Africa, Flour Mills of Nigeria PLC fell 48% after declining 50% in 2014. Flour Mills of Nigeria is primarily involved in flour milling, pasta production and cements production.
In Spain, Ebro Foods shares rose 32% to €18.16 from €13.71. Ebro, which is the parent of New World Pasta Co., in June said it is expanding in the U.S. specialty rice market with a $45 million acquisition of the U.S. consumer rice business of RiceTec AG and RiceTec Inc.