Cerealto expands with another acquisition

Source: Alimarket. Cerealto has just completed the acquisition of a large biscuit factory from the Mexican company Marian. The acquired facilities are located in Tepeji del Río de Ocampo, in the Mexican municipality of Hidalgo, and are used to manufacture high-quality biscuits and related products. Cerealto is currently deciding on the investment needed to boost the business in the short term. In particular, it is considering applying the group’s operational practices to the processes used in the plant, introducing improvements to ensure that the facilities are technically state of the art, installing new machinery to increase productivity and to manufacture new specialities, and giving a boost to R&D. One of its main aims is to increase capacity to 14,000 t annually, guaranteed by the company.

In terms of its commercial policy, the company will continue manufacturing products with ‘Marian’, because the Mexican company will become its client. Furthermore, with the aim of increasing volumes as quickly as possible, it will market products under the brand of the distributor, both in Mexico and in the EU, where its main client is H.E.B., a supermarket chain which has a presence in the south of the country and in the north of Mexico. Until now, Cerealto operated on the American continent through a logistics warehouse located in San Antonio (Texas) which carried out its product distribution in this region. Nonetheless, it has an ambitious investment plan precisely for the state of Texas which involves setting up a plant to manufacture biscuits, puffed corn cakes and snacks in the Seguin area.

In total, Cerealto has budgeted $ 58.5 m (about € 46.7 m) to set up these facilities. An additional investment of $ 1.5 m (about € 1.2 m) will be added to this figure in order to set up an R&D centre in the same area which will begin operations not before 2019. According to sources at Cerealto, this plant will begin the production of biscuits for the American market once it has been set up. In the meantime, it will deal with orders previously placed by the United States from the recently acquired Mexican plant. The United States has been in the sights of Siro since 2011, the year in which it signed an important agreement with the North American chain mentioned above to manufacture various types of biscuits.

According to current forecasts, Cerealto could achieve sales of € 90 m, compared to € 69 m in 2014. This year, the second since the company began operations, ended with a growth of 41% and an EBITDA margin of € 2m. In total, in 2014, Cerealto produced and marketed about 45,000 t of product, compared with 22,000 t the previous year.

Last June, Cerealto took over the entire international business of the Grupo Siro and its B2B clients from the supplier Mercadona. In other words, Siro made its sales through the Valencian chain, its only client in Europe, and through Cerealto, which bought some products from Siro and then marketed them on the international markets. Cerealto began operating in 2012 and is owned by Luis Ángel L?pez, former general director and advisor of Grupo Siro.

Following the acquisition of the Marian factory, which has a workforce of 236 employees, the newly created group will have about 500 workers. Its manufacturing structure also includes the Benavente (Portugal) factory, acquired from Danone through Nutriceal Foods in 2013, and the plant for producing pasta products situated in the Italian region of Silvano d’Orba (Pastificio Mediterranea).