McCormick buys Dutch spice firm
bolt-on acquisition of Dutch herbs and spices player C.M. van
Sillevoldt.
The Netherlands firm that supplies a wide range of herbs and spices, rice specialities and dried legumes under its brand name Silvo and the India brand in Belgium will go for €58 million in cash.
"Since the acquisition of Ducros in 2000, we have directed our efforts to expansion in Europe. The Silvo acquisition fits squarely within this strategy, extending our presence into the Netherlands with a strong leading brand," commented Robert Lawless, CEO of McCormick.
The US supplier of flavours, condiments and seasonings underlined 'convenience, quality, and ethnic flavours' as particularly appealing for the purchase.
Consumer demand for ethnic foods, itself driven by globalisation, travel and more adventurous tastebuds, is stimulating the food industry to design food products that target this growing market. In the UK alone, ethnic meals - Indian, Chinese and other Asian - now account for more than 40 per cent of the chilled ready meals sector.
According to McCormick Silvo is the market leader in Dutch spices and herbs with spices, herbs and seasonings making up 75 per cent of sales, and speciality food items taking the remaining slice. The 140-strong firm has production facilities in the Netherlands and Belgium for dry products; wet products are co-packed.
McCormick, that posted net sales of over $2.2 billion last year, previously announced it wants to focus on improving operating profit margin through 'efficiencies in our operating expenses'.
The company - with 49 per cent of sales generated from the industrial business and 51 per cent from the consumer side - hopes to cut annual expenses for the group by $70 million in 2006.
Savings gained are expected "to offset higher costs for raw materials" plus a raft of other areas, notably invested to increase sales and boost profits.
