Jaencoop and Olivar de Segura have agreed to merge. The two cooperatives both bring different strengths to the new producer.
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).
At the present time, it doesn’t make sense to go it alone. Now we are going to have more muscle in the international markets and greater guarantees of production.- Cristóbal Gallego Martinez, president of Jaencoop
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).
See Also:Spanish Olive Oil ProductionOlivar 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.
More articles on: production, Spain, Spain olive oil production
Nov. 27, 2023
High Olive Oil Prices in Spain Spur Interest in Black Friday Discounts
While prices at origin have dipped slightly, they remain elevated in stores, prompting concern among retailers over theft and consumers over fraud.
Jul. 11, 2023
The second-largest olive oil cooperative recorded total revenues of €280 million in the 2022 financial year, partially due to increased domestic sales by value.
Apr. 12, 2024
Global Production May Exceed Expectations, but Not Enough to Move Prices
Analysts predict climate change will result in new price dynamics, with high-quality extra virgin olive oil and other market segments behaving differently.
Feb. 23, 2024
World Trade Organization Finds U.S. Noncompliant in Table Olive Trade Spat
The WTO ruled that the U.S. must remove tariffs on Spanish table olive imports, while a separate case is pending in the Court of Appeals.
Oct. 12, 2023
Another Poor Harvest in Andalusia Predicted
Low output in the world’s largest olive oil-producing region will continue to push prices higher.
Jan. 29, 2024
Production in Spain Expected to Fall Short of Initial Estimates
Production estimates range from 680,000 to 755,000 tons for the 2023/24 crop year, below expectations at the start of the harvest.
Oct. 23, 2023
Rising Prices, New Technology Attract Private Equity Interest in Olive Oil
Analysts are eyeing promising financial returns in the olive oil market, particularly in Spain and Portugal.
Jun. 26, 2023
Once Again, Olive Growers in Western Mediterranean Face Severe Drought
In Andalusia, rainfed olive groves are barren. Similar situations have been reported in North Africa. Officials in Europe are focusing on the soil to mitigate the drought.