GEA aquires Fonterra as customer, snaps up Nu-Con Ltd

NZPA

Tuesday 12th July 2011 2 Comments

German food technology company GEA Group Aktiengesellschaft says it has bought a New Zealand company, Nu-Con, which is a major global supplier of equipment to handle raw bulk materials.

Auckland-based Nu-Con has 167 employees, and generated revenues of 27 million euros ($NZ45.72m) in the year to March 2011.

Its powder handling systems are especially used for infant formula, milkpowders, and other food processing as well as in various industrial applications.

GEA Group said the New Zealand company would be integrated into its process engineering segment, though the deal is yet to be approved by the Commerce Commission.

GEA recently acquired Fonterra as a customer according to documents filed with the commission.

GEA said the main competitors for the supply of dairy handling equipment in New Zealand included a multi-national Tetra Pak, Hamilton-based Powder Projects -- "very close to the market, in particular Fonterra" -- un-named Chinese suppliers, and Techno Links NZ, in Auckland, which marketed DMN Westinghouse equipment.

It predicted that GEA would still continue to face strong competition from Tetra Pak and Powder Projects but the big issue in terms of dairy-handling equipment would be which company wins the drier orders from major customers such as Fonterra, Synlait, Open Country and Westland.

The top customers for GEA and Nu-Con were currently Fonterra rivals Westland Co-operative Dairy Company, Open Country Dairy, and Talley's Group.

"The acquisition of Nu-Con is a further important strategic step in positioning GEA in the bulk powder handling market," said GEA Group director Niels Graugaard.

GEA Group had revenues of over 4.4 billion euros in 2010, 70 percent of which came from the food and energy sectors, and employed about 23,000 people worldwide. It is listed in Germany’s MDAX stock index .

The Commerce Commission said today that main use in New Zealand for the type of processing equipment supplied by GEA was in the handling and packaging of milk powder.

The dairy industry in particular had seen extended growth over the past five years, and this growth was likely to continue, driven from the growth in Asia's middle class, which was spending some of its rising income on dairy-based proteins.

With rising income and population levels, food volume requirements were increasing, and discerning buyers were also looking for safer and higher quality products, with a trend to more convenience foods.

Comments from our readers

On 12 July 2011 at 11:06 am Jack said:

The Headline is Misleading --- GEA by way its subsidiary Companies have been a key supplier to Fonterra for many years, of Westfalia Separators, Niro Spray Dry Milk Powder Plants, Plate heat Exchangers, Product Valves,etc,and their construction of Turnkey Plants by GEA Process Engineering NZ Ltd.

On 21 July 2011 at 11:45 am M Holvey said:

What Jack said. In fact, Nu-Con haven't been brought in as a supplier apart from equipment on any Fonterra project that I can recall for 9 or so years after the Clandeboye powder transport debacle.