Following several acquisitions in recent years, the deeply Dutch family company Royal A-ware is continuing its expansion in Belgium. With the acquisition of dairy companies the Hollebeekhoeve (Kruibeke) in April and Olympia (Herne) in August 2022, the cheese and dairy company is strengthening its position in the Belgian market. CFO Antonio Rodriguez tells us more about the ambitions and interests of the family company and how the collaboration with BDO Belgium supports their growth.
How did Royal A-ware start and what is your core business?
Antonio: "Royal A-ware was created in 2010 from the merger of two Dutch family businesses. Our core business focuses on two activities, dairy production on the one hand and agricultural transport on the other. In both cases, we attach great importance to our relationship with dairy farmers and suppliers. Trust is the basis for a win-win story, but I don't have to convince BDO of that. We have been active in Belgium for several years now. For example, we bought the La Concorde cream factory (Merchtem) in 2015 and, with hands-on support from BDO Legal, a milk powder factory of FrieslandCampina (Aalter) at the end of 2021. It is our ambition to internationalise further and to make Belgium a second home market."
An ambition with a lot of challenges?
Antonio: "The biggest challenges at the moment, as is the case for many companies, are the sharply rising raw material and energy prices, but also the pressure on milk production and, of course, the climate objectives, which we not only have to but also want to support. Moreover, internationalisation brings very specific challenges with it. That is why we appeal to the expertise of BDO. We can always turn to the multidisciplinary BDO team to find an answer to the various issues we are faced with. For example, they recently supported us in the due diligence, negotiation and drafting of the transaction documentation in connection with our acquisition of the dairy company Olympia (Herne)."
What underpins the success of an acquisition like that of Olympia?
Antonio: "We are a family business, which means that our shareholders think in the long term. The takeover of another family business such as Olympia creates a very specific, hands-on dynamic. Trust and continuity play a crucial role during the entire process. The buyer must have confidence that you are taking over a good, healthy company, while the seller wants the family business to be in good hands. We also feel and experience this trust and the pragmatic approach in the collaboration with BDO. So we are definitely on the same wavelength."
Is there more to an acquisition than just value, price and quality?
Antonio: "Taking over a company is one thing, but of equal value to us is the access to raw materials and the relationship with the suppliers who work with Olympia. By nature, we are not buyers of companies. But it is necessary in the current market if you want to internationalise. It is our business strategy to be active in the entire chain, from consumer to cow. And that makes internationalising even more complex."
So Royal A-ware differentiates itself by putting the customer first and integrating and managing the entire chain vertically from top to bottom?
Antonio: "That's right. Within the agricultural world, our style and approach are quite unique. There are still companies that manage the entire chain, but they usually start from the basic product, e.g. milk, and develop their service model on that. Managing the chain vertically from top to bottom, from end customer to raw material, is much less common. That is precisely our core and strength. We have long believed in customer service from Z to A. For us, it always starts with the customer's question, the possible concept to be developed in that respect, e.g. an own milk flow, and we then translate that back to the farm to optimise the value of the milk."