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US acquisition beefs up Stork's push into meat machine market

By Ahmed ElAmin , 18-Oct-2005

The acquisition of a US machine maker is part of Dutch-based Stork Food Systems' bid to become a provider of complete processing systems to the meat industry.

The company yesterday said it had signed a letter of intent for the acquisition of Townsend, a meat processing machine manufacturer. Townsend, which is based in Des Moines, had a turnover of $80million in 2004.

The acquisition will expand Stork's entry into the beef and pork industry. Stork's market is concentrated in the poultry sector.

In particular the acquisition will give Stork access to Townsend's access to Stork's co-extrusion technology for processing meat into sausages, which is under development. Stork called thesausage technology a "market breakthrough."

The co-extrusion technology will give customers a significant cost price reduction in sausage production. The co-extrusion technology allows high levels of food safety to be achieved in theproduction of various kinds of sausages including hot dogs, the company stated.

"Close partnership in the field of food and processing technology will offer major advantages to both companies, and as a result to their joint customer base," the companies statedin a press release.

The US is the largest market for meat processing. Townsend supplies all of the largest twenty largest meat processing companies in the US, according to an announcement by Stork.

The acquisition is part of Stork's strategy to strengthen its position as a system supplier in meat processing and in the US. The acquisition price will not be disclosed until final agreement hasbeen reached, the company stated. Stork expects to finance the acquisition from its own cash reserves.

"Stork can apply Townsends' skinning, curing, marinating and meat pump knowledge in its white meat developments," the company said in a presentation yesterday. "Townsendwill have immediately a strong entry in the poultry industry. Townsend can apply Storks' cut-up and deboning knowledge in its beef and pork product developments."

Townsend has production sites in Des Moines, and Oss, the Netherlands. The company also has sales offices in Italy and Russia.

Stork Food Systems manufactures equipment for poultry processing and the production of convenience food. It has a 50 per cent share in machines for poultry processing. It is third largest supplierin the world of machines for convenience food processors, according to the company.

It also supplies machines for beef, pork and fish processing.

In contrast to beef and pork, the market for poultry meat continues to show a worldwide growth of two to four per cent per year. Because it is low in fat and has a neutral taste, poultry meat isalso ideally suited for the preparation of convenience food.

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