Aviko announced a €200 million investment to add potato processing capacity

Aviko, one of the top potato processing companies in Europe, plans to invest € 200 million (USD 210 million) in new and existing production plants.

Running at full capacity

Currently, all Aviko's production facilities are running at full capacity and the company needs to process more potatoes. Aviko expects this strong international demand for french fries and potato products is there to stay.

At a press conference yesterday at the agricultural coop Royal Cosun, parent of Aviko, a master plan for a series of investments was announced. This year € 70 million will be invested in the expansion and improvement of Aviko's plants, an amount that will increase to a total of € 200 million in the next few years.

Aviko operates five potato processing plants in the Netherlands and seven outside the country, including two in China. Aviko employs over 2000 people and processes 1.6 million tonnes of potatoes annually.

Acquisition(s) a realistic scenario

Not included in the investment plan is the acquisition of additional potato processing companies. According to Robert Smith, chairman of the board of directors, this is a realistic scenario.

Robert Smith, chairman of the board of directors:

“We are still looking for opportunities for acquisition.”

Aviko's parent Royal Cosun is free of debt and has sufficient cash reserves for one or more acquisitions.

Aviko realized a turnover of € 800 mln and is profitable (€ 18 million net profit in 2015)

Aviko's Joint Ventures in China

Management has high expectations of the two Joint Ventures it participates in in China. Turnover in that country is currently € 40 million and the outlook for the Dutch company in that region are positive.

The company is now in a position to invest because it completes a successful year. Prices for both French fries and potato flakes increased and for the first time Cosun's potato processing activities exceeded the coop's activities in sugar beet processing in turnover (€ 820 million vs € 780).

Cosun yesterday presented its preliminary annual report: Cosun realized last year a net profit of € 54 on a turnover of almost € 2 billion resulting from positive results in potato processing division and less positive results from sugar beet processing.