June 3, 2016

Cargill announced it has agreed to acquire Texas-based Five Star Custom Foods Ltd., a company that specializes in the production of cooked protein food products, as well as soups and sauces, for supply to the foodservice and food processing industries for an undisclosed sum.

The acquisition of Five Star, which is expected to boost Cargill’s cooked protein capacity, provide a channel for innovative development, and to heighten the company’s supply chain efficiencies, will include two facilities in Fort Worth, Texas and Nashville, Tennessee.

“Adding Five Star Custom Foods to Cargill’s protein business will provide us with new capabilities we currently do not have, while allowing us to be more nimble in our ability to meet the ever-changing needs of our customers and consumers in today’s fast-paced marketplace,” states Brian Sikes, corporate vice president of Cargill’s protein businesses. “We will also learn from the proven success of the Five Star Custom Foods team, which will allow us to enhance our own portfolio as we continue to grow our protein business.”

Amid plummeting commodity prices, Cargill has undertaken a strategic restructuring of its operations, divesting lower-margin businesses in favor of expanding into higher margin activities including food ingredients, value added products and aquaculture.

In July of last year, Cargill announced the building of a $30 million shrimp feed facility in Ecuador through a joint venture with Naturisa. One month later, the company signed an agreement with Altor Fund III and Bain Capital Europe III to acquire global salmon feed leader, EWOS for €1.35 billion. Under the terms of the EWOS deal, Cargill acquired seven production facilities, one each in Chile, Scotland, Canada, and Vietnam, and three in Norway, and also acquired two state-of-the-art research and development centers located in Chile and Norway. The acquisition adds to the company’s existing presence in the aquaculture sector in Mexico, Central America, China, the U.S., Southeast Asia, India, and Ecuador, and will bring the company’s number of global R&D and Technology Application facilities to 15.

The acquisition of Five Star is the second protein-focused move for Cargill within a week’s time. Only days ago Cargill announced it is expanding its presence in the Philippines through a joint venture between Cargill Philippines Inc. and Jollibee Foods Corp. (JFC), the largest foodservice company in Asia, to build and operate a poultry processing facility in Santo Tomas, Batangas.

Under the terms of the agreement, Cargill will hold a 70% stake, and JFC will hold 30% 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.

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GAI News staff