Itochu seeks European foothold with $12m Serbian raspberry deal

The Japanese trading house bought a further 49% of Master Fruits through its Dole subsidiary as it targets Europe’s €4.9bn frozen fruit and veg import market.

Itochu Corporation has acquired 49 percent of Master Fruits, a Belgrade-based raspberry processor, for $12 million.

The Japanese trading house made the investment via Dole Asia Holdings, a fresh produce and packaged foods business it acquired in 2013 for $1.68 billion. The subsidiary already owned 15 percent of Master Fruits.

Dole makes about half of its ¥260 billion ($2.4 billion; €2 billion) turnover from the sale of fresh produce, with the balance from packaged goods, such as canned pineapple and fruit bowls. It sells around 80 percent of the latter to the US, with 10 percent going to Asia and 5 percent exported to Europe.

Itochu clearly intends to use Master Fruits as Dole’s launch pad into new regions. “Dole’s packaged foods business has a stable revenue base in North America, but hopes for further growth in the future are pinned on acceleration of business expansion in the European and Asian markets,” it said in a statement.

The Centre for the Promotion of Imports from developing countries, a Dutch government agency, estimates that European imports of frozen fruit and vegetables totaled 4.2 million tons, worth €4.9 billion, in 2015.

Master Fruits can process up to 5,000 tons of raspberries a year at factories it owns. Its ambition, however, is to grow fast: the one-year-old business aims to process 20,000 tons by 2020, using partner factories.

Itochu’s experience with Dole has not been without its difficulties. Shortly after the company was acquired, the Philippines – the main production hub for Dole’s staple products – was affected by a typhoon, droughts and pests that caused banana output to shrink by 40 percent. Dole posted a ¥16.9 billion loss in 2016.

The Japanese trading house identified “turning around” and “increasing the scale of the Dole” as part of its growth strategies in its 2017 annual report; it is aiming to boost pineapple production by one-third and double banana output over the next five years.