Global investment fund Permira announced it has acquired a 50 percent stake in Ye Cherng Industrial Products Co., Ltd (“Grobest”) – one of the largest independent and most advanced producers of aquatic feed in Asia.
The deal was conducted through a company held by Permira, which upon completion of the transaction, will form a new joint venture company that will control the half-stake, and will be the sole corporate shareholder in Grobest. The remaining 50 percent stake will be held by Ko Chi-kang and Chen Chunping, CEO and chairman of Grobest, respectively.
Founded in Taiwan in 1974, Grobest has expanded over the years across the world’s largest aquaculture market to now have operations in Taiwan, Vietnam, Thailand, China, India, Indonesia, the Philippines, and Malaysia.
“As we continue to expand and deepen our footprint across Asia Pacific, we are delighted to announce the Permira funds’ first investment in Taiwan,” said Alex Emery, head of Permira Asia. “We look forward to working with the Grobest team and contributing our significant aquaculture and animal health experience, to fuel the company’s future growth.”
Since its founding, the company also has grown to become a technological leader in its industry, formulating innovative and differentiated functional feed products designed to prevent and fight diseases and increase yields. Additionally, the company provides technological services include pond maintenance, water treatment, and soil and disease testing to farmers across Asia.
“We are very pleased to partner with the pioneering team at Grobest, a real R&D leader in advanced aquatic functional feed and health products in Asia, and to work closely with them to unlock the company’s full potential on the global journey ahead,” said Ola Nordquist, head of Permira Nordic.
Mighty Macros
Since 2007, Permira has pursued a thematic focus on the food value chain, and aquaculture in particular.
Rising global populations and increasing wealth – particularly in emerging economies – along with diminishing wild fish numbers have put pressure on the aquaculture industry to fill the gap in supply. This pressure has also filtered down to the aquaculture feed category. These factors and the recent approval by the EU and Canada clearing insect protein for use in fish feed, have driven innovators to search for and develop alternative ingredients to replace fish meal with the goal of increasing sustainability and reducing costs for the industry and its producers.
These macro trends have led investors to shift greater attention and capital to investment possibilities presented within aquaculture farming and its ancillary industries. Reinforcing this fact, in February of last year, aquaculture investor David Tze announced the launch of the Tze Venture Search Fund for Aquaculture Technology – a new fund dedicated to backing and growing aquaculture feed innovations in the aquafeed ingredients sub-category.
It is long-term macro trends such as these that Permira identifies when choosing to back market leading companies with the potential for growth. This investment marks the sixth for Permira in the food value chain, and its third in aquaculture, adding to previous investments in Pharmaq, a Nordic-based global aquatic health company, and Provimi, a leading animal feed company.
Grobest was flagged by Permira as an attractive investment opportunity based on a range of factors, including its side geographical reach, its strong technical capabilities, its leadership in the R&D space for warm water species, and the company’s drive to further expansion across Asia and beyond.
“Grobest is a true innovator in aquaculture that started with the vision to build a sustainable aquaculture industry in Taiwan over 40 years ago,” said Jin Tsao, head of Permira China. “Under the leadership of the Founding families, the company has built an impressive position across the most important markets in Asia. The Grobest story is a real testament on how to build successful international companies from Taiwan. Permira is very excited to be part of the next chapter of Grobest’s story and support the further internationalisation [sic] of the company.”
-Lynda Kiernan