CNC Holding, one of Europe's largest suppliers of compost and casing soil for mushroom growing, is looking for a buyer. The current owners of the company in Milsbeek in the Dutch province of Limburg, a cooperative formed by practically all the mushroom growers in the Netherlands, will cease to exist after a history of 66 years.

'We are looking for proceeds of at least €100 million', says Maurice Koppen, chair of the Coöperatieve Nederlandse Champignonkwekersvereniging (CNC). This means that, after deduction of outstanding bank debts, the 103 members of the cooperative will have in the region of €60 million to distribute. Not all the members are still active as growers, but they have a financial interest in the cooperative.

Thursday, 21st November 2019, three-quarters of the members agreed to sell the four Dutch and two Polish companies that comprise CNC Holding. 'That is a business decision ', says Koppen. 'We started discussing the future of the cooperative with the members in early 2018: continue in the present structure or cash in the interests?'

Member numbers of the cooperative have been declining. What once started with more than a thousand member growers has now dwindled to little more than a hundred. 'That decline is expected to continue, resulting in just thirty to forty companies active in the Netherlands in the future. They will be on a larger scale, as the total production capacity of the sector is likely to remain more or less stable. In that scenario, the interests of individual members may start to diverge.'

Mushroom growers can invest the proceeds of the sale in growing their own businesses on the European and global markets, according to Koppen. He expects further professionalisation in the branch meaning that growers will pack their own produce more and intensify direct sales to retailers. 'I think that after a natural restructuring of the sector they can generate a healthy income.'

Potential buyers of CNC, with a turnover of approximately €90 million this year and a growing EBITDA of €16 million, could be either investment companies or industry partners. For example, compost company Walkro, which was acquired by the Irish Monaghan at the end of last year. ‘But a buyer could equally come from China or the USA," says CEO Gerrit Mastenbroek. 'These are the largest mushroom producing countries, followed by the Netherlands and Poland.'

The mushroom sector is experiencing turbulent times. The prices paid by retailers are so low that many growers are unable to survive. However, Koppen is optimistic about the sector's future. 'As a great alternative to meat, mushrooms face a bright future. They are low in calories and fat. Moreover, there are few sectors that make such an excellent fit with the circular economy as ours does.'

In 1953, the precursor of CNC was founded on the initiative of eight mushroom growers in North Limburg who wanted to produce their own raw materials. The company is by far the market leader in the Benelux region and has 332 fte. 'In theory, jobs may be lost under new ownership', says Koppen. 'But in the search for the right buyer, continuity of the company is paramount.'

In 2018, CNC Holding opened a large compost production facility in the north of Limburg, which processes more than 600,000 tons of horse manure, chicken manure and gypsum annually. This involved an investment of €22 million. The new construction was largely financed by the sale of the mushroom processing company Lutèce in 2016 to the Belgian Greenyard Group headed by entrepreneur Hein Deprez.

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December 2019