German conglomerate BayWa is actively exploring options to sell its majority interest in T&G Global, a fresh produce business unit based in New Zealand, according to a source familiar with the matter .
Nonetheless, the divestiture process is still in its “very early” stages. Recently, BayWa announced plans to reduce its workforce by 1,300 employees from its 8,000-strong full-time staff by 2027, as part of its broad “transformation concept.”
In a formal statement, Munich-based BayWa outlined, “The concept envisions organizational streamlining, numerous operational cost-cutting measures, and the divestiture of significant international affiliates, while fundamentally maintaining the four core business sectors: agriculture, construction, energy, and agricultural equipment.”
Reports suggest that BayWa retains a 73% stake in T&G Global, which cultivates and distributes a variety of fruits and vegetables both domestically and internationally. Notable brands include Envy apples, Orchard Rd fruits, and Beekist vine tomatoes.
Furthermore, publicly-listed BayWa has stakes in TFC Holland, a Dutch fresh produce business, and Al Dahra BayWa in Dubai. However, it remains uncertain whether these holdings might be evaluated for potential divestiture.
Al Dahra BayWa is a partnership that BayWa entered into in 2017 with Al Dahra Holding, involving an initial investment of €30 million ($31.7 million) into the fresh produce initiative.
BayWa stated, “The funds released from the sale of these companies will be utilized to enhance the liquidity of the operating business and to reduce debt.” This announcement came on December 4, following their engagement of a restructuring advisor in July.
Along with the workforce reductions, focused primarily on corporate offices within Germany, BayWa has outlined plans to close 26 of its 400 locations by the end of 2027, identifying these sites as unprofitable in the long term.
Discussions with BayWa’s works council regarding the impending job losses are anticipated to conclude by March of next year.
T&G Global operates under BayWa’s Global Produce segment, which is part of the company’s agricultural business unit. This sector is divided into several areas, including Cefetra and those dealing with products such as grains, oil seeds, soy, and fertilizers.
For the first nine months of 2024, up until September 30, the agriculture business unit recorded a revenue of €9.8 billion, reflecting a 5.1% decrease, with EBIT at €118.9 million, down 18% year-on-year.
The Global Produce sector saw an increase in revenue by 4.2%, reaching €781.1 million, while reporting an EBIT of €1.1 million, a significant improvement from a €4.1 million loss in the prior year.
BayWa remarked, “The repercussions of Cyclone Gabrielle on the plantations in New Zealand remain apparent, leading to decreased marketing volumes due to smaller size profiles, although these effects were partially mitigated by increased price levels. The wholesale business in New Zealand underperformed compared to expectations.”
“While Global Produce benefitted in the previous year from favorable demand and pricing due to reduced harvest volumes caused by the cyclone, this segment experienced a decline in demand in the third quarter of 2024, particularly within the tomato, product category.”
Across the BayWa group, total revenue for the first nine months fell 11.9% to €16 billion, with EBIT turning negative at a €77.6 million loss, contrasting sharply with a €214.6 million profit during the same period last year.
As of now, total debt amounts to €3.7 billion
