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Linas Agro looks to buy 4 poultry firms, plans to vertically integrate

Published on 7 July, 2013, Last updated at 01:01 GMT
Linas Agro looks to buy 4 poultry firms, plans to vertically integrate

Lithuanian agribusiness company Linas Agro Group AB has entered the poultry production industry with the acquisition and addition of several poultry firms to the group.

The company plans to vertically integrate it poultry production and in the future plans to produce its own compound feed to feed its poultry stock.

The group has signed agreements, including to buy 87% of shares in the joint-stock poultry company Putnu fabrika Kekava (Kekava), 100% shares in Broileks, 100% shares in Cerova and 100% shares in Lielzeltini. Depending on a few factors (ie approval by the Competition Council) The deals are likely to be finalized by December of this year.

Linas Agro Group plans to spend LVL8.78 million (EUR12.5 million) on the shares, and it expects the four companies' aggregate turnover to reach approximately EUR70 million or LVL49 million in the future.

Board member of Linas Agro Group, Andrijus Pranckevicius said "The main business of companies Kekava, Broileks, Cerova and Lielzeltini is broiler and poultry meat production. We are planning to buy all these companies together. Poultry farming has good prospects and is a potentially profitable sector, even though part of the companies we wish to buy will have to be restructured."

Pranckevicius continued, saying that "After the deal is concluded, we are planning to vertically integrate the acquired companies, ensuring poultry feed production, egg incubation, poultry growing and meat processing. The business lines of the companies we plan to acquire overlap with the operations of Linas Agro Group to some extent, therefore providing additional synergies. We sell about 1.5 million tons of grain and other agricultural produce a year, part of which we will be able to use in production of compound feed in Latvia."


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