The cornerstone for the Netherlands' newest seafood giant was laid this week with the merger of shrimp firm Klaas Puul and salmon processor Foppen.

Once the deal is finalized in August, the new entity will operate under the name Dutch Seafood Company and boast a combined turnover of €310 million ($365.6 million).

The "fit makes most sense in cross-selling," newly appointed CEO André van der Padt told IntraFish after the deal was announced Tuesday. Customers at Foppen had been asking "why we're not selling more shrimp," while Klaas Puul's clients had been demanding more salmon products.

The merger "opens up production capacity on both sides." Klaas Puul's small salmon activities will be moved to Harderwijk while Foppen's small shrimp production will be accommodated Volendam and Edam.

Foppen has production sites in the Netherlands and Greece, while Klaas Puul has processing facilities in the Netherlands, Germany, Denmark, and Morocco with annual sales of about €170 million ($200.5 million).

"We're looking at top-line growth," said van der Padt, who joined the firm from the role of CEO at Dutch cereal producer Meneba.

Market synergies

Van der Padt expects the merger to create extensive synergies on the marketing side.

Foppen recently opened an office in China with a new sales team and is seeing the first good results. "Selling high-quality shrimp into that market could be very interesting," he said.

The company's largest market for its salmon products, however, is in the United States with high-profile retail clients such as Costco and Kroger.

Around €80 million ($94.3 million) to €90 million ($106.1 million) of Foppen's €140 million ($165.1 million) in turnover of comes from the US market and van der Padt is seeing good opportunities for shrimp there as well.

Future acquisitions likely

Van der Pladt said Dutch Seafood Company will not only target organic growth but will also look at possible acquisition targets on an international level.

"I hope we'll be acquisitive," he said, adding the company will only look at selected targets "at the right price and the right time" within the high-end salmon and shrimp segment.

"I've always believed in a focused company," he said.

Sander van den Berg, CEO of Klaas Puul, added there are not many more opportunities to consolidate within the European shrimp market, which he now sees as being dominated by two major players: Klaas Puul and Parlevliet & Van der Plas (P&P)-owned Heiploeg.

"Vertically there are still possibilities for downstream consolidation," he told IntraFish. Other than that, "there are not many opportunities."

Dutch Seafood Company's immediate focus, however, will be on integration, on building up a strong management team and on organic growth, van der Pladt said.

"If nature gives us all the salmon and all the shrimp we want we'll see steady growth over the next years," he said.

Marketplace

Foppen-Klaas Puul mega-merger sets stage for topline growth, overseas expansion