Unigrains backs succession plan at French grain trader-stocker

Unigrains has taken a minority stake in Armbruster Group, a heavyweight in France’s grain trading and flour industry, as part of a succession plan at the company.

Alsace-based Armbruster started off as a flour trading business in the 1930s, before entering the grain sector in the 1950s. Its existence hints at a peculiarity of the French agricultural industry, by which farmers must sell their grain to trader-stockers approved by the authorities, rather than go to the market directly.

Three-quarters of these entities are cooperatives, therefore owned by their members; private, family-owned businesses make up the balance. Armbruster Group ranks among the 10 largest players in the latter category, Florence Alin, an investment director with Unigrains, told Agri Investor.

Like in other markets, France’s family businesses regularly come across succession issues, in which a family seeks a capital injection from external sources as its most prominent member approaches retirement, said Anabelle Gerbal, a private equity investment officer at Unigrains. In the case of the Armbruster Group, the transaction will help Etienne Armbruster, a co-owner of the company, take over from his older brother Christophe, who is soon to retire.

Though both Unigrains and Armbruster Group declined to comment on transaction value, other financials attest to its weight within the industry: the company has sales of nearly €100 million a year and markets about 450,000 tons of grain.

Back to its roots

That Unigrains would be attracted to the sector is not much of a surprise. The group’s shareholders comprise France’s wheat and corn grower trade bodies; these have an interest in having a sturdy supply chain further downstream, Alin said. “It is important that the grain growing industry can rely on strong, well-performing trader-stockers.”

She noted that the company’s assets make it a major player of the storage and transport of corn to Northern Europe, notably via its two largest port silos in Ottmarsheim and Strasbourg. “It is close to Unigrains’ historic roots, and Armbruster has a strong presence in both its sector and region,” Gerbal added.

But the capital injected by Unigrains will also be used to develop the business, she said. “The company is looking to reinforce its network in Alsace. Today it runs about 20 collection points, but it wants to set up more of them, so as to even be closer to the farmers.”

Armbruster also aims to diversify into other cereals and oilseeds, such as soybeans, as well as expand its presence across the border in Germany, where it has a small subsidiary.