German conglomerate BayWa is considering selling its majority interest in its T&G Global fresh produce business unit in New Zealand, an industry source familiar with the proceedings told Just Food.
However, the process is in the “very early” stages, the source said, after BayWa this week revealed it planned to cut 1,300 jobs from its 8,000-strong full-time workforce by 2027 as part of its “far-reaching transformation concept”.
Munich-headquartered BayWa said in an official statement: “The concept envisages organisational streamlining, numerous operational cost-cutting measures and the disposal of major international affiliated companies, while fundamentally continuing the four core business areas of agriculture, construction, energy and agricultural equipment.”
Just Food understands BayWa holds a 73% stake in T&G Global, which cultivates and supplies fruit and vegetables distributed locally and internationally. Brands include Envy apples, the Orchard Rd range of fruits and Beekist vine tomatoes.
Publicly-listed BayWa also holds shares in Dutch fresh produce business TFC Holland and agri-food firm Al Dahra BayWa in Dubai, although it is not clear if those interests would come under the microscope for disposal.
Al Dahra BayWa is a venture BayWa entered into in 2017 with Al Dahra Holding, injecting €30m ($31.7m) into the fruit and veg project.
“The funds released by the sale of the companies are to be used to strengthen the liquidity of the operating business and to repay debt,” BayWa said in the statement on 4 December after hiring a restructuring advisor in July.
As well as job cuts, which will mainly focus on corporate offices in Germany, BayWa also plans to close 26 of its 400 “locations” by the end of 2027. It described the facilities as those that “cannot be operated profitably in the long term”.
Talks with BayWa’s works council over the job losses are expected to conclude in March next year.
T&G Global is managed under BayWa’s Global Produce fruit and veg operating segment, which comes under the company’s agricultural business unit. The latter is divided into different areas: Cefetra and agriculture for such products as grains, oil seeds, soy and fertiliser; technology in terms of machinery and equipment; and global produce.
In the first nine months of 2024 to 30 September, the agriculture business unit generated revenue of €9.8bn, down 5.1%, and EBIT of €118.9m, down 18%.
Revenue for Global Produce rose 4.2% to €781.1m. EBIT was €1.1m, compared to a €4.1m loss a year earlier.
“The after-effects of Cyclone Gabrielle on the plantations in New Zealand are still noticeable and led to lower marketing volumes due to smaller size profiles, which were, however, partially offset by higher price levels. “[The] wholesale business in New Zealand was weaker than expected,” BayWa said in the Global Produce commentary.
“While Global Produce benefited from positive demand and price effects in wholesale last year due to the lower harvest volumes caused by the cyclone, the segment recorded lower demand in the third quarter of 2024, particularly in the tomato product group.”
For the BayWa group as a whole, revenue across the nine months fell 11.9% to €16bn, while EBIT turned negative at a €77.6m loss, versus a €214.6m profit in the corresponding period.
Total debt stood at €3.7bn.
