September 27, 2017

Cargill and vertically integrated food business Faccenda Foods announced they have agreed to establish a joint venture with the goal of becoming the leading provider of chicken, turkey, and duck in the UK.

Under the terms of the agreement, Cargill’s fresh chicken business will join with Faccenda’s fresh chicken, turkey, and duck business to create a new stand-alone business in which both Cargill and Faccenda will own equal shares. Cargill’s fresh chicken business reaches along the value chain and includes laying farms, breeder farms, hatcheries, a feed mill, grow-out facilities, and three poultry processing sites with a capacity to process 2.1 million birds per week, while Faccenda’s business has the capacity to process approximately 2 million chickens, 3.5 million turkeys, and 5.5 million ducks per year, according to Meat & Poultry.

The as-yet unnamed business will employ about 6,000 people from both parent companies, and will include operations that span the entire supply chain. Andy Dawkins, the current managing director of Faccenda Foods, will assume the role of CEO of the new company, while Chris Hall, director of fresh chicken for Cargill Meats Europe, will be appointed to the role of chief commercial officer.

“Both Cargill and Faccenda are recognised today by their customers for their high standards and great service,” said Ian Faccenda, CEO of Faccenda Investments. “The new joint venture confirms our long-term commitment to being a responsible partner across the entire supply chain, providing stability and security to our customers, suppliers and growers for years to come.”

An Ongoing Strategy

Cargill’s launch of a poultry joint venture in the UK is the latest move by the company as it builds its presence and strength in non-U.S. poultry markets, while reducing its presence in the U.S. animal protein space in favor of plant-based proteins.

Last November the company announced it was investing $50 million to expand its poultry processing capabilities at its facility in Nakhon Ratchasima, Thailand, due to climbing consumer demand. And in May 2016, Cargill announced a joint venture with Jollibee Foods Corp. to build and operate a poultry processing facility in Santo Tomas, in the Philippines. Under the terms of the agreement, Cargill will hold a 70 percent stake, and JFC will hold 30 percent of the new venture which will be called Cargill Joy Poultry Meats Production Inc. Cargill will oversee the establishment, management, and operations of the facility, and JFC will be a key customer of the venture.

More recently, Cargill expanded its poultry business into another emerging market, when it announced it had acquired Pollos El Bucanero SA in June of this year. This deal represented Cargill’s first foray into Colombia’s protein production sector, and gains the company control of the top preferred supplier of products to retailers and foodservice customers across the country.

Meanwhile, Cargill announced the complete sale of its U.S. feedlots across two transactions – the first two Texas-based feedlots located in Bovina and Dalhart, Texas, were sold to Fiona Industries for an undisclosed sum in July 2016, and its two remaining feedlots located in Leoti, Kansas, and Yuma, Colorado, were then sold to Green Plains Inc. in May of this year for $36.7 million.

Then in August of this year, Cargill surprised the industry when it became an investor in Memphis Meats – participating in a $17 million Series A for the San Francisco-based startup that is developing methods for growing clean meat from animal cells in laboratories without the need for breeding, raising, or slaughtering animals.

-Lynda Kiernan