New Norfolk office underpins Cefetra grain expansion

Cefetra, best known as an importer of grains and feed materials into the UK and Ireland, is investing to become a national UK grain trading business. This strategy is in line with its €14.9 billion German parent group BayWa’s ambition to be the major agri-service supply company in Europe.

Rotterdam-registered Cefetra bought the crop storage and marketing co-operative Wessex Grain last year, which is now trading as Cefetra Wessex from its Somerset premises. Former Wessex managing director Simon Wilcox, now managing farm grain origination for the whole Cefetra UK business, is targeting an annual volume of two million tonnes of UK grain eventually, building supply through new regional offices and acquisitions where possible. 

The company has opened a new procurement office at Downham Market in Norfolk under the Cefetra Anglia brand. This is headed by Tim Desborough who has long experience at Allied Grain, Openfield and WellGrain, as well as in running his own commodities trading businesses. Some grain trading is also taking place through the company’s longer established UK headquarters offices at Glasgow’s King George V docks. The feed materials side already has an office in Newry, Northern Ireland and a southern logistics centre at Brackley in Northamptonshire.

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Mr Wilcox says the wider Cefetra grain business will emulate the Wessex model of exporting around 25% of its annual volume, with the remaining 75% traded domestically, subject to market variations.  With Cefetra’s existing close relationships with UK feed materials customers, the company is well placed to build its UK grain sales.

As importantly, Baywa’s financial strength will be crucial in underpinning Cefetra’s on-farm offer, particularly in difficult, low margin conditions such as prevail at the moment, he adds. The buyer’s financial security is now “in another league” compared to that of Wessex Grain as an independent co-operative, notes Mr Wilcox. This is an important factor in securing ex-farm grain, and the BayWa balance sheet will help Cefetra compete with the other multinational companies dominating the UK grain market.

Baywa is a major supplier of seed, fertilisers and crop protection products in Germany, and this could be replicated through Cefetra in the UK eventually, although Mr Wilcox stresses that the priority is to build the national grain procurement operation. But it does open the possibility of back-to-back seed for grain contracts and wider supplier partnerships in future.

Working with a major European business will also give Cefetra’s UK operation access to better global market information, as well as wider market opportunities through the wider Cefetra/BayWa network across the continent and further afield, particularly for feed and malting barley and milling oats. It has access to key UK export terminals and can contribute strong logistics management and expertise.

Cefetra first secured a UK presence through its 1999 acquisition of McCorkell (Scotland), the shipping business formerly owned by the W&C Scott feed milling group. Dutch co-operative feed manufacturer ForFarmers bought the controlling interest in Cefetra in 2009, before selling its stake to BayWa in early 2013, following its purchase of the Hendrix and BOCM Pauls feed businesses. BayWa purchased Hamburg-based Evergrain late last year.

BayWa handled around 30 million tonnes of oilseeds and grain in 2015. It is Germany’s leading supplier of crop protection products, holds a significant share of the fertiliser and seed markets, and is a major player in the EU farm equipment sector. Agriculture accounts for 67% of its revenues, with the remainder coming from building materials and energy interests.