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Acquisition in Ecuador Takes Nutreco to Global Top Three Shrimp Feed Producer

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GLOBAL - Nutreco has announced that it has signed an agreement to acquire 75 per cent of the shares in Gisis S.A., the fish feed subsidiary of the Expalsa group.

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Expalsa is market leader in fish feed production and shrimp and tilapia farming in Ecuador and has strong market positions in Honduras and Peru. The acquisition of Gisis takes Nutreco into the global top three shrimp feed suppliers. The acquisition will be immediately earnings accretive.

This acquisition fully supports Nutreco's growth strategy to expand its fish feed business in growth geographies and non-salmonid species whilst maintaining its global number one position in salmon feed.

Ecuador's shrimp feed market is Latin America's largest and the third largest in the world after China and Thailand, and growing at around eight per cent annually

Associated aqua feed joint venture in Honduras with leading international tilapia producer Regal Springs from Indonesia provides potential for further growth in Latin America and Southeast Asia

This acquisition strengthens Nutreco's aquaculture feed business Skretting in Latin America, with production, sales and distribution facilities for shrimp and tilapia feed in Ecuador, Honduras, and Peru and a joint venture with Regal Springs in Honduras.

Expected revenues in 2012 are €160 million (2011: €135 million). The total consideration for the acquisition of 75 per cent of the shares, including corresponding net debt, is approximately €78 million. Closing of the transaction is subject to gaining regulatory approval from the Ecuadorian competition authority.

Gisis employs approximately 400 people and has two feed production plants in Guayaquil, Ecuador. It produced around 200,000 tonnes of shrimp and fish feed in 2011 and 70,000 tonnes of other feeds, including 50,000 tonnes of poultry feed. The size of the shrimp feed market in Ecuador in 2011 is estimated at 350,000 tonnes. Ecuador ranks as number three in worldwide shrimp feed production after China and Thailand. Over the past five years the market has grown by approximately eight per cent per year and double digit growth is expected in 2012. Fish feed production in Ecuador is around 60,000 tonnes.

Part of the acquisition comprises a joint venture with Regal Springs in Honduras which is currently building a fish feed plant. Regal Springs is a leading tilapia farmer in Indonesia with operations also in Mexico and Honduras and is the world's first fish farming company certified by the Aquaculture Stewardship Council. Nutreco and Regal Springs will study further strategic relationships in Mexico and Indonesia upon closing of this transaction.

Knut Nesse, CEO Nutreco: "We are very pleased with this excellent strategic acquisition. Ecuador is a major aquaculture country with strong growth. It strengthens our presence in Latin America and provides a platform for further expansion in this strategically important market. The joint venture with Regal Springs provides further opportunity for growth."

The acquisition fits into Nutreco's strategy to capitalise on its leading fish feed positions, such as in salmon feed, and to expand into growth regions important for aquafeeds; notably for shrimp and non-salmonid fish species. The strategic target is to grow its fish feed business for non-salmonid species from 28 per cent in 2010 to 45 per cent of total fish feed volume by 2016. This acquisition will increase the non-salmonid share of total fish feed volume to close to 40 per cent in 2013.