Canadian dairy Agropur eyes further U.S. acquisitions
By Rod Nickel
WINNIPEG, Manitoba (Reuters) - Canada's second-biggest dairy, Agropur Cooperative, said it is looking to grow in the United States, possibly through acquisitions, in the face of an expected erosion of its market share at home due to recent international trade deals.
Agropur, whose brands include Iogo yogurt and Oka cheese, and larger rival Saputo Inc (SAP.TO: Quote) have already built U.S. businesses through acquisitions, looking for profits outside Canada's managed-supply system.
The Trans-Pacific Partnership trade deal, signed this month, and Canada-European Union trade agreement provided extra incentive for dairies to seek growth outside Canada, which controls supplies and prices while slapping steep tariffs on most imports.
Dairies from Europe, New Zealand, the United States and other countries will gain access to 5.5 percent more of the Canadian market once the deals are ratified and fully take effect.
For Quebec-based Agropur, which earned 44 percent of its C$5.9 billion in revenue last year from the United States, the fragmented U.S. dairy industry looks inviting, Agropur Chief Executive Robert Coallier said in an interview.
"Our focus should be to participate in the American consolidation of the dairy industry," Coallier said, adding that buying opportunities are "substantial."
Family-owned U.S. dairies are of particular interest because they may mesh well with Agropur's culture, he said.
The United States is the second-largest consumer of cheese after the European Union, and third-biggest fluid milk consumer, according to U.S. Department of Agriculture. Continued...