The food industry is a secure business with strong growth and GEA is ‘putting all its eggs into one basket’ to drive growth in that area, according to GEA Grasso.
GEA Group announced it was selling its heat exchangers (HX) division for $1.8bn in April this year to private equity investor Triton.
70% of group revenues
Frankfurt-based Triton makes equipment for applications including air conditioning and cooling towers.
The company said at the time it would use proceeds from the sale to focus on food-related operations, which will now account for more than 70% of group revenues.
Danny Heuvelmans, director product management, sales and marketing support, GEA Grasso, told FoodProductionDaily it split from its HX division because there was not enough synergy related to the route it wanted to go towards - the food industry and it was currently looking for more products that are in contact with food and not the utilization around it.
Its other operations make products such as industrial meat grinders and automatic feeding systems for the dairy industry.
“GEA is one of the largest providers of equipment and process technology for the food industry, in the past HX was also a part of the business but now we want to focus more on the food industry only,” said Heuvelmans.
“We made this decision because most of our divisions are related to this sector. Secondly, food in the future is a market that is quite secure.
“The population keeps on growing and that means there will be a higher demand for what you eat. In China and other third world countries there is a transition development going on moving from basic food to convenience snacks.
“This in turn affects related products and production and with the growth in urbanization that is a market for the future that is of interest to a company like GEA.”
Five GEA divisions
According to Reuters, the company's businesses making food processing and industrial refrigeration equipment were the group's fastest-growing last year, while revenue at the HX operation shrank by about 7%.
Its five divisions include; GEA Food Solutions; Farm Technologies; Mechanical Equipment; Process Engineering and Refrigeration Technologies.
Heuvelmans said 2013 saw a EURO 4.3bn turnover excluding the HX division. Its rivals include Micron, Nyagowa, from Japan and sabroe refrigeration part of JCI - Johnson Controls.
“We have a lot of competitors who build systems with similar components but our customers include Heineken, Nestle, Kraft Foods, Lidl supermarket, and the Co-op and 80% of our business is food related in processing and storage,” he said.
“Production processors and efficiency is very important because energy is a topic everywhere especially in refrigeration.
“To make food cold you need a lot of energy and of course the population is growing, the food chain is growing. You have to think about good energy efficiency.”