Eurofins plans to open 14 labs by mid-2017
The firm launched its second start-up program at the beginning of 2014 to support growth.
Between January 2014 and the end of June 2015 it opened 21 start-up labs, and until mid-2017, 35 (14 more) are planned in Australia, China, France, Germany, India, New Zealand and the USA.
By the end of 2015, it expects to complete 40,000m2 of additional laboratory surface, following the 60,000m2 in 2014.
America growth
In the US, Eurofins is constructing 10 small and medium-sized microbiology testing laboratories for samples where rapid initiation of analyses is critical.
Upon completion of the expansion program, expected in mid-2017, the food testing laboratory network will have 23 sites across the US, covering over 60% of its addressable local market.
The firm said regulatory catch-up and the development of new market segments such as nutraceuticals are expected to continue to drive strong growth momentum in the region.
It has completed work at two food microbiology testing laboratories in Lancaster, Pennsylvania and in Mounds View, Minnesota.
These complement its 11 existing food testing sites, which include the competence centers for contaminants testing in Louisiana (which was moved to a twice-as-large laboratory in 2014); for nutritional testing in Des Moines, Iowa; for dairy in Minnesota and nutraceuticals in California.
Eurofins said the start-up laboratories should provide an additional platform on which it can further deploy its food testing methodologies based on advanced genomics technology.
It has also expanded and modernized existing competence centers in Des Moines (IA), Petaluma (CA) and New Orleans (LA) in view of the strong growth in their respective specialities.
Asia growth
The firm said it is looking to strengthen its footprint in Asia Pacific through acquisitions and greenfield expansion.
In Hong Kong, the group’s newly-opened lab, performing time-sensitive bacteriology tests, is expected to increase penetration of the local food testing market, which was previously limited to more advanced chemistry tests sent to sites in mainland China and Europe.
Eurofins is expanding its main Chinese food testing laboratory in Suzhou and in India it has opened a food testing laboratory in New Delhi, its second one in the country, after the newly-expanded laboratory in Bangalore.
The firm said these sites allow it to cover some of the most important and affluent regions in the country, with high concentrations of international and premium local food companies.
The first start-up program was completed in 2013, when the group’s 17 start-up laboratories across 12 countries became profitable as a whole.
Dr Gilles Martin, Eurofins CEO, said the investments reflect a commitment to maintain the laboratory network and confidence in outlook in the medium term.
“We believe that these investments should contribute additional growth and support the next growth cycle for Eurofins,” he said.
“Moreover, due to the scale of our well-invested existing network, Eurofins can continue investing intensively in highly dilutive start-ups and other network expansion programs, and still be able to deliver substantial profit improvements, as demonstrated in the 45% EBITDA growth and 93% increase in operating cash flows in the group’s H1 2015 results.”
