Jaencoop to Become Second Largest Olive Oil Producer After Merger

Jaencoop and Olivar de Segura have agreed to merge. The two cooperatives both bring different strengths to the new producer.

Feb. 11, 2019
By Costas Vasilopoulos

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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 Production

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.

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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.





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