About 10% of the transaction was covered by the company’s own funds. The remaining 90%, which translated into some PLN 25.3m (€6m), was covered by a loan obtained by PKM Duda from a local bank.
In a comment released following the deal, local brokerage firm DM BPS said it was “difficult to assess the potential profitability of the transaction”.
‘Pork meat production’
The brokerage said the latest move was in line “with the strategy of the group which aims to develop the segment of pork meat production and plans to cover the demand by its own slaughterhouses”.
Cargill Poland claims to be a leading player in Poland’s animal nutrition sector, focusing on animal feed production, and owes 11 production facilities located in various parts of the country. Agro Provimi operates in Bieganów, in Poland's western region of Lubuskie.
Headquartered in the country's capital Warsaw, PKM Duda says it is the largest player in the Polish red meat slaughtering and packaging industry. The company processes pork, beef and game meat, and consists of 30 companies active in the Polish agricultural and food sectors.
New company strategy
The latest takeover follows the release of the company’s financial results for the first half of this year. From January to June 2015, PKM Duda posted revenues of PLN 708.3m (€167.7m) and a net profit of PLN 6m (€1.4m).
That represented a decrease compared with the first half of 2014, when the firm reported revenues of PLN 875m (€207.2m) and a net profit of PLN 8.6m (€2m). That’s based on data released by PKM Duda.
Dariusz Formela, the company’s chief executive, said the lower revenues and profit were largely due to the decreased export sales which dropped by 30% year-on-year in the first six months of 2015.
‘Negative market situation’
“We have managed to keep the group profitable despite the negative market situation,” Formela said.
“Our results were impacted not only by unfavourable internal market conditions, but were also resulting from limited export capabilities resulting from the embargo on the Russian meat market and some of the key Asian markets.”
PKM Duda said for its recently released market strategy for 2015-2019 it aimed to increase revenues and profit by developing production and distribution capacities in Poland and acquiring other meat industry players.