Leading supplier of food processing equipment expands into new sectors and increases staff complement by 20%

Leading provider of food processing equipment, Marel SA, has announced a positive year in terms of service quality and job growth. The company, which services clients in the food industry throughout South Africa, has increased its staff complement by 20% and has extended its reach into many new companies and sectors over the past year.

“Despite challenging trading conditions, Marel SA is growing,” says General Manager, Rodney Macer-Wright, “and we look forward to an even more positive year during 2014.”

Marel SA is the local operating arm of global group Marel, one of the world’s top providers of food processing equipment. Although the group reported a 7.3% decrease in revenue for Y2013, its cash flow position is strong. Group revenue for the year was EUR 661.5 million and EBITDA was EUR 69.4 million or 10.5% of revenue. Cash flow before interest and tax is particularly strong at EUR 80.3 million [2012: EUR 65.6 million]. 

The group reports that while revenues on big projects were down in 2013, revenues from the supply of spare parts and the provision of services continued to increase. Marel’s intention is to reach organic revenue growth with an EUR 55 million-adjusted EBIT in 2014. The long-term outlook in the industry remains favorable, and its goal is to continue to grow faster than market.

“Marel´s market position as a leading provider of advanced solutions for poultry, meat and fish processors is strong on all continents,” says Arni Oddur Thordarson, Group CEO. “The group has achieved an average annual growth of 4% over the past five years even though global economic growth has been at an historic low. Additional trading challenges have come in the form of spikes in corn and energy prices, which have impacted significantly on food processors. The situation is, however, easing and in general these companies returned healthy profits in 2013.”

Having weathered the global financial storm, Thordarson says that many food processors have now identified the need for expansion and modernization. In order to best meet this need, Marel has undertaken several initiatives to simplify management structure and bring down fixed cost. Refocusing plan with the objective to become simpler, smarter and faster has been formally launched. .

“A good example of this is evident in the group’s meat industry activities,” says Thordarson. “Three business units have been merged in order to better utilize innovation and sales capabilities. Among these are Carnitech, which was acquired last year.”

He adds that the global organizational structure will be further simplified during the current financial year in order to provide better service to customers. The group’s focus will be on merging business units that serve the same customer needs and rely on the same technical capabilities in order to provide on-going improvements in customer service.

Locally, Marel SA has had particular success in introducing its proprietary range of Townsend Skinners into new markets and companies, especially in the fishing industry. At the beginning of 2013, for instance, the company undertook a complete overhaul of I&J’s legacy hake processing operation. This complex and multi-disciplinary project was expertly managed by joint project managers from both Marel and I&J, and involved re-designing and re-configuring the I&J plant.

I&J now uses Marel’s new systems and equipment to measure raw fish as it is received at its Woodstock wet-fish processing facility. Automated equipment is then programmed to select from a range of processing options depending on fish size, which enables production managers to optimize both portion sizes and product quality. The processing time from filleting machine to freezer has also been reduced. This not only vastly improves plant efficiency, but guarantees that consumers can expect the very best in everything from quality, freshness, convenience and presentation.

“As is evident from projects like these, Marel SA is bringing significant benefit to its clients,” says Macer-Wright. “In line with group objectives, we will continue to become simpler, smarter and faster at operating level, and aim to continue to deliver the very best products and services to our growing client base.”

Marel International aims to achieve operating profits of over EUR100 million by 2017.