Greenyard Reopens Hungarian Site; Sells Horticulture Unit

Sint-Katelijne-Waver, Belgium-headquartered Greenyard on September 13 announced the reopening of its frozen vegetable processing factory in Baja, Hungary, after identifying the root cause of a Listeria monocytogenes outbreak that forced the facility’s shutdown in late June. The closure followed assertions that the presence of such bacteria in products packed at the site could potentially have been responsible for a number of deaths and illnesses among consumers in Europe earlier this year.

greenyard group squarelogoQuickly after the outbreak of Listeria-related cases was reported, the company moved to recall items produced at the plant, while shifting production to its other factories in Europe as well as to the facilities of subcontractors. The negative financial impact has amounted to approximately €30 million (net after insurance). The value of its publically traded shares, which plunged 38% in mid-July and has fallen by 56% year to date, gained 15% to close at €8.90 after news of the factory reopening.

The Listeria root cause was traced to one of the Baja plant’s freezing tunnels, which is no longer in operation, explained Greenyard. As such, according to a press release issued to the media, the company is now “ready to safely supply customers with products from our Hungarian facility, and regrets the impact the potential contamination case and recall has had on customers and consumers.”

The statement went on to emphasize: “Health and food safety remain our No. 1 priority, and Greenyard is now taking a leading role in the frozen sector to increase industry standards in close collaboration with sector representatives.”

Horticulture Unit Divestment

On September 21 the company announced that deal has been reached to sell its horticulture business (including Greenyard Mycoculture) to Straco, a Gent, Belgium-headquartered investment and private equity firm, for €120 million.

Greenyard Horticulture is a market leader in Belgium, France, Poland and Ukraine for growing media and mushroom substrates, exporting to more than 60 countries with 14 facilities in Europe and Russia. Pursuant to the agreement, all operations and assets of the unit will be transferred to Straco.

“Today, our focus is needed on improving profitability again and on deleveraging our balance sheet,” said CEO Hein Deprez. “In our two other segments, fresh and long fresh (frozen products), our strategy to build strong relationships with customers remains intact. We remain keen on cooperating with growers and retailers to develop with them new concepts that create value for all parties in the chain. This reorientation towards our fresh and long fresh segments will allow more focused management’s attention and a faster implementation of impactful operational improvement actions for internal profitable growth.”

€0.20 Dividend Per Share

Meanwhile, a gross dividend of €0.20 for AY17/18 was declared during an extraordinary shareholders’ meeting in Sint-Katelijne-Waver on September 21. It will be payable on October 4.

Chief Operating Officer Carl Peeters, acknowledging that Greenyard’s performance missed expectations, said that lower profitability was particularly due to volume losses in the fresh produce markets of Germany and Belgium.