Share |

FB Roundup: Heineken, Continental, and Cargill

Heineken strikes Chinese expansion deal, Continental splits its business, and Cargill bulks up on meat, animal feed

Heineken strikes Chinese expansion deal

Heineken has taken a $3.1 billion stake in the parent company of China’s largest brewery, China Resources Beer, heating up competition among Western brewers breaking into the largest emerging market.

Heineken, the world’s second largest brewer and 50% owned by the founding family, currently runs at a loss in China, and the new acquisition will give it access to strong distribution networks, and the chance to acquaint Chinese drinkers with its products.

China is the world’s largest beer market by volume with a growing thirst for premium brands.

Rival family-owned beer giant AB InBev has a strong lead in China, controlling 16% of the market compared with Heineken’s 0.5%, according to Euromonitor.

Heineken turned over €22 billlion ($25.5 billion) in 2017. It made the headlines again this week as it released a marijuana-based alcohol-free version of its Lagunitas beer, to be sold in states where the drug is legal.

Continental splits its business

Continental AG has become the latest auto industry company to restructure its business in preparation for sweeping changes in the world of car making.

Chief executive Elmar Degenhart, pictured, told reporters the company was turning its powertrain division, which makes parts for internal combustion engines, into a separate company. There was also a possibility Continental would sell some of its rubber business and moving into battery making.

Degenhart said there were "huge questions marks" around the timing of a widespread move toward electric vehicles and synthetic fuels.

“That’s why it’s prudent to make ourselves more flexible now,” Degen said, adding that the changes would likely come into effect early 2019.

Continental AG is 46% owned by Schaeffler Group, the holding company for Germany’s Schaeffler family.

Cargill bulks up on meat, animal feed

Cargill has reported record earnings of $3.2 billion for the 2018 fiscal year, with animal feed and meat the 153-year-old agribusiness’s biggest cash cow for the second year in a row.

Owned by the sixth generation of the eponymous family, Cargill brought in revenues of $114.7 billion, up 5 per cent on last year. Its adjusted operating earnings were up 6 per cent.

Cargill was founded in 1865 when William Wallace Cargill bought a grain warehouse in Iowa. While meat and feeding animals is presently proving the most lucrative, the company’s grain and food staples business also recovered in 2018 after several years of global oversupply, due to drought in Argentina and tensions between the US and its trading partners.

Click here >>