Jaencoop to Become Second Largest Olive Oil Producer After Merger

Summary

After years of nego­ti­a­tions, olive oil pro­duc­tion coop­er­a­tives Jaencoop and Olivar de Segura have agreed to merge, cre­at­ing the sec­ond largest pro­ducer and dis­trib­u­tor of olive oil in the world with an aver­age annual turnover of more than €250 mil­lion. The new entity will com­bine the pro­duc­tion capac­ity of Jaencoop with the pack­ag­ing infra­struc­ture of Olivar de Segura, engulf­ing 28 asso­ci­a­tions, 26,000 farm­ing part­ners, and dis­trib­ut­ing a dozen brands of olive oil to over 20 mar­kets world­wide.

After nego­ti­a­tions that lasted sev­eral years, the olive oil pro­duc­tion coop­er­a­tives Jaencoop and Olivar de Segura have agreed to merge.

The result­ing con­glom­er­ate will be the sec­ond largest pro­ducer and dis­trib­u­tor of olive oil in the world, after Dcoop in Málaga, Spain, with an aver­age annual turnover of more than €250 mil­lion ($286 mil­lion).

Both groups are based in the province of Jaén, in Andalusia, the area of Spain that each year accounts for almost one-third of the world’s olive oil yield.

Each part will con­tribute its strongest assets to the new entity. Jaencoop owns 247,000 acres of olive groves that yield 80,000 to 90,000 tons of olive oil on aver­age, but packs a pro­por­tion­ally small quan­tity of up to 2.5 mil­lion liters (0.66 mil­lion gal­lons).

Olivar de Segura on the other hand, pro­duces about 20,000 tons of olive oil from its 74,000 acres of groves, but due to its pack­ag­ing infra­struc­ture, it bot­tles sig­nif­i­cantly more olive oil rang­ing up to four mil­lion liters (approx­i­mately one mil­lion gal­lons) each sea­son.

In order to exploit each oth­er’s capa­bil­i­ties and to achieve economies of scale, the planned merger will enable the pro­duc­tion capac­ity of Jaencoop to take advan­tage of the pack­ag­ing dynam­ics of Olivar de Segura and vice-versa.

The new entity will ulti­mately engulf 28 asso­ci­a­tions with 26,000 farm­ing part­ners, 320,000 acres of olive groves and an expected pro­duc­tion of 120,000 tons for the 2018/19 sea­son, account­ing for 17.5 per­cent of Jaén’s pro­duc­tion and nine per­cent of the olive oil crop for the whole of Andalusia.

It will han­dle and dis­trib­ute a dozen brands of olive oil and organic olive oil to more than 20 mar­kets around the world, includ­ing the pro­tected des­ig­na­tion of ori­gin (PDO) brands Sierra de Cazorla and Sierra de Segura.

Ángel Rodriguez, pres­i­dent of Olivar de Segura, pointed out that the fact that big projects demand sub­stan­tial infra­struc­tures led to the merger.

“We wanted a strong group in the province,” he said. ​“We have projects with great poten­tial that require a greater vol­ume of pro­duc­tion to sup­ply them and now we are going to be a group with a great dimen­sion.”

His coun­ter­part at Jaencoop, Cristóbal Gallego Martinez, said that the merger is about tak­ing advan­tage of the syn­er­gies and that they want to enhance their pres­ence abroad by offer­ing high qual­ity and large quan­ti­ties of olive oil.

“At the present time, it doesn’t make sense to go alone,” he said. ​“Now we are going to have more mus­cle in the inter­na­tional mar­kets and greater guar­an­tees of pro­duc­tion.”

The new entity will be struc­tured in sec­tions (eco­log­i­cal, sup­plies, denom­i­na­tions of ori­gin, etc.) and will likely oper­ate under the name of Jaencoop, but with­out totally dis­card­ing the Olivar de Segura brand name, which will be used for its name recog­ni­tion among con­sumers.

• Diario de Sevilla


• Agro-Alimentarias