A. Moksel AG History

Rudolf-Diesel-Strasse 10
86807 Buchloe

Telephone: 49/82 41/5 03-0
Fax: 49/82 41/5 03-210

Public Company
Incorporated: 1948
Employees: 2,313
Sales: EUR 1.8 billion (2002)
Stock Exchanges: Munich Frankfurt Berlin Hamburg
Ticker Symbol: MOK
NAIC: 424470 Meat and Meat Product Merchant Wholesalers; 311611 Animal (Except Poultry) Slaughtering; 311612 Meat Processed From Carcasses

Company Perspectives:

Established as a traditional company in the meat industry, the Moksel Group has developed into one of the leading food production consortiums in Germany, and is active in Europe and on a global scale. Today, we are distinguished by a considerably expanded product range that is based, as before, on implementing the demanding quality standards of our production and distribution companies. As a progressive, innovative and highly-competitive food processing company with competent solutions for all food requirements, we are definitely on the right track.

Key Dates:

Alexander Moksel builds a slaughterhouse in Buchloe.
Moksel begins importing meat from Austria.
Moksel increases exports, particularly to Italy.
Through acquisitions, Moksel expands activities into refrigeration and storage.
Moksel is floated on the stock exchange.
Hidden debt discovered at a recently acquired subsidiary starts off a series of difficult years.
Moksel introduces the "Food Family" line of convenience products.
Mad cow disease desolates the meat industry.
Bestmeat of The Netherlands acquires majority control of Moksel.

Company History:

A. Moksel AG runs a meat production and trading concern in the heart of southern Bavaria, one of Germany's major cattle-producing areas. The company operates a large slaughterhouse and trading concern in its home town in Buchloe and oversees a network of slaughterhouses, processors, and trading companies throughout Germany that together form the Moksel Group. Founded just after World War II, the company began importing, exporting, and slaughtering meat in the earliest decades of its existence. Its business activities later grew to encompass cutting and storage of meat. In the mid-1990s, Moksel increased its activity in the area of meat processing and developed a line of convenience foods marketed under the Food Family brand name. The company is majority owned by Bestmeat Company of The Netherlands.

Founding and Steady Growth After World War II

In 1948 Alexander Moksel built a slaughterhouse in Buchloe, a town of several thousand located about 40 miles west of Munich. The slaughterhouse was favorably situated close to producers in an area known for the quality of its livestock. The "Alexander Moksel Grossschlächterei, Fleisch- Wurst- und Konservenfabrik" slaughtered and produced meat and sausage, as well as trading locally in meat and livestock. Because livestock did not have to travel far to the slaughterhouse, Moksel expected that he would be able to produce a higher-quality product than the meat that came from slaughterhouses in urban centers.

A decade after its founding Moksel had annual revenues of DM 9 million. Around 1957 the company expanded its trading business and began importing meat from Austria into Bavaria. As imports grew, Moksel achieved revenues of DM 30 million in 1964. That year, Moksel started exporting meat more extensively, particularly to Italy. In the early 1970s the company developed export markets in Eastern Europe as well. In 1970 annual revenues reached DM 130 million.

Five years later Moksel had nearly doubled in size again. It branched out into new areas of the meat industry, buying a stake in a refrigerating and cutting plant. More acquisitions followed in the later 1970s: Moksel took over an importing and exporting concern in Hamburg known as Peter Paulsen as well as a trading company in Berlin. The company was becoming more vertically integrated and could now offer storage and logistics services in addition to slaughtering and trading. With the new subsidiaries, net revenue rose from DM 235 million in 1974 to DM 1 billion in 1980. That year Moksel formally divided its business activities into separate production and trading branches. While beef remained Moksel's most profitable product, the company acquired subsidiaries that dealt in breeding cattle, fine meat cuts, and wild game.

Moksel's expanded activities had outgrown its original headquarters by the mid-1980s. In 1984 the company began construction of a new slaughterhouse in Buchloe and opened the facility a year later. In addition to state-of-the-art slaughtering capabilities, the facility was designed to accommodate extensive refrigerated and frozen storage capacity. Cattle from all over southern Bavaria met their demise at the Buchloe slaughterhouse. In 1986 Moksel also acquired a slaughterhouse in Furth im Wald, a city northeast of Munich in an area known for its quality cattle. The longstanding Furth slaughterhouse was in need of an investor to modernize it to meet new requirements. Moksel spent DM 3 million to bring the facility up to speed.

Continued Expansion As a Public Company: 1987-92

After 40 years of growth and acquisitions, Moksel was ripe for a public offering. By 1987, the firm's subsidiaries included seven trading concerns in Buchloe, Munich, Hamburg, Dortmund, and Madrid, Spain; slaughterhouses in Buchloe, Furth im Wald, Regensburg, Berlin, and Bordertown, Australia; refrigeration operations in Nuremberg, Buchloe, and Fallingbostel; and processing plants in Berlin and Germaringen, all in addition to the original Moksel concern with trading, storage, and slaughtering operations in Buchloe. The entire group employed about 880 people, 220 of them at the central facilities in Buchloe. Net revenues for the group in 1986 were about DM 1.4 billion, with slightly more than 60 percent of revenues coming from livestock trading operations and the remainder from meat slaughtering, storage, and processing.

In preparation for the initial public offering (IPO), Moksel combined its two parent companies--the slaughtering branch and the trading branch--into one entity, Alexander Moksel Schlachtbetreibe, Import-Export GmbH u. Co. KG. In June 1987 that entity was restructured into A. Moksel AG. In October the company offered DM 24.9 million, just under half of its base capital, for sale on the Frankfurt and Munich stock exchanges.

Moksel nearly tripled its size in the few years after the IPO. After a period of stagnant exports due to international overproduction, trade picked up again in 1988 and exports accounted for the majority of the firm's proceeds. In 1987 the company renovated slaughterhouses in Regensburg and Berlin and founded a breeding cattle company in Munich to take advantage of demand from countries that were beginning to develop their milk and meat industries. A trading company was founded in Regensburg in 1989 and construction began on a new slaughterhouse in Gelsenkirchen. In 1990 the company acquired a majority share in Fleischzentrale Südwest GmbH, a slaughterhouse in Crailsheim near Stuttgart, and founded the EGN Erzeugergemeinschaft für Qualitätsfleisch slaughterhouse in Vilshofen east of Munich.

In the late 1980s, Moksel began to increase its activity in the area of meat processing. By 1987 revenues from the processing sector had reached DM 579 million. The following year Moksel introduced a line of exclusive certified meat under the name "Almox premium." The brand name indicated that the livestock came only from certain longtime partners who met strict criteria. The livestock was then slaughtered and stored in a way that would preserve its high quality and freshness. Group sales in 1991 were about DM 4 billion. In the fall of 1992 company founder Alexander Moksel sold his 34 percent stake in the company to the März family, owners of a fellow German meat company.

A String of Crises: 1992-98

Moksel's advance came to a sudden halt in 1992. That year the company acquired G.u.P. Salomon AG, a meat trader and processor near Frankfurt, for DM 40 million. The company was strong in the production of prepared food and had a contract with Burger King. But the deal turned sour after Moksel looked through the firm's accounts and found hidden debt and irregularities costing more than DM 100 million. Moksel reported a DM 125 million net loss in 1992 and was forced to cancel its regular dividend payment.

Meanwhile, Moksel was in the midst of investment and expansion. Aside from a new cutting facility in Buchloe, three new slaughterhouses in the former East Germany were almost ready in the towns of Neustrelitz, Kasel-Golzig near Luckau, and Rodleben near Dessau. Moksel also gained a majority share in Eyckeler & Malt AG, a company near Düsseldorf involved in livestock trade, slaughtering, and processing. In the early 1990s, however, Moksel was investigated for possible illegal dealings with East German companies. The company was suspected of having undeservedly profited from special credits designed to rejuvenate the East German economy. Loans to East Germany had been negotiated by a Bavarian leader with ties to Moksel, and commissions meant for the East may have found their way back to Moksel. When Finance Department leaders of the Christian Social Union made rule changes that absolved Moksel of responsibility, opposition parties on the left accused the government of favoring Moksel because the company was a major contributor to the right-wing party. The investigation was reopened, and the final report in 1994 found that Moksel appeared to have acted illegally in its dealings with East Germany, receiving a share in commissions that were meant for East Berlin. Parties on the left suggested that Moksel's imports from the East resulted in lower livestock prices for Bavarian farmers.

In the mid-1990s a drop in demand for meat was putting even more pressure on Moksel. In particular, the highly modern new slaughterhouses in the East were losing money due to overcapacity. The beleaguered Moksel hit a crisis point in 1994, which Chief Executive Herbert Wüst referred to as "the most difficult year in the company's history." The company reported a group loss of DM 179.1 million. Wüst came to Moksel to lead the company through a drastic restructuring. In his opinion, the Süddeutsche Zeitung reported, the company's dire situation was in part due to "a strategy of size without use of market synergies." Under Wüst's leadership, Moksel laid off several hundred employees in 1994, cutting its payroll to about 2,200. Over the next year Wüst carried out cost-cutting measures, cut back slaughtering activities, and called for a greater focus on processing, international trade, and product branding.

After the restructuring, Moksel's capital reserves were used up almost completely. If not for the support of its banks, the company would have gone bankrupt. Over the course of the mid-1990s, Moksel's creditors refrained from collecting DM 293 million in debt. About DM 50 million was forgiven and the rest converted into rights to Moksel's future profits.

By 1997 the restructuring was showing some tentative results. Moksel reported a small profit of about DM 6 million, its first since 1991, but dividends were still out of the question. Chief Financial Officer Uwe Tillman took leadership of the company after Wüst's early resignation in February. The tough times were not over yet. Creutzfeldt-Jakob or "mad cow" disease had just appeared in Britain, causing a drawn-out drop in demand for beef products. The company's financial situation remained poor. The März food company, which held a third of the company's shares, had gone bankrupt. Moksel was in dire need of an investor that could pump some capital into the company, but the search for a partner took years.

Emphasis on Processing: 1998-2003

Tillman carried on with Moksel's focus on the processing sector of the meat business. Because of demographic changes in Germany, more and more people were buying convenience foods. Moksel introduced the "Food Family" brand name in 1998 and planned to move forward aggressively in marketing prepared food. "Meat must not be anonymous anymore," Tillman announced that year. Moksel also won organic certification for its slaughterhouse in Landshut, opening up another potential special market. The company reported another small profit in 1998: EUR 3.2 million (DM 6.3 million) on sales of EUR 1.7 billion (DM 3.3 billion). Moksel had added to its workforce a bit, bringing its employees up to 2,570. But a debt totaling nearly DM 500 million was coming due in the near future.

Moksel further diversified its activities in 1999 in an effort to expand the more profitable areas of its business. In response to growing economic globalization, the company's activities grew in the European Union, Eastern Europe, and the Near and Middle East, although the economic crisis in Russia hurt Moksel's export business there. Now that consumers were wary of beef, lamb and poultry accounted for nearly a quarter of Moksel's sales and the company planned for further expansion in those areas. Moksel also continued to develop an even greater range of prepared and packaged convenience products.

Meanwhile, the search for an investor with capital reserves dragged on. Werner Folger, a board member at Moksel and the liquidator for the bankrupt März AG, had searched unsuccessfully since the late 1990s for a buyer for März's 34 percent stake in Moksel. In 2000 he acquired shares from smaller shareholders and bundled them with his existing holdings to create a nearly 49 percent stake, hoping that the prospect of majority control would make the package more attractive to an investor. The sale also was complicated because the meat industry in Germany was quite fractured, so that no acquisition could give the buyer a large market share. While a single company in Denmark or The Netherlands, for example, had about an 80 percent market share, there were about 240 different slaughterhouses in Germany.

In 2000 a renewed crisis hit the meat industry. Mad cow disease was discovered in some cattle in northern Germany. At the same time consumers discovered that some sausage packages had been incorrectly labeled as being free of beef. Meat sales plummeted 20 to 30 percent; grocery stores quit buying and farmers quit selling cattle in the face of low prices. France was an important customer for the high-quality Bavarian beef, but exports there fell drastically after three French citizens died of mad cow disease. Sales of organically produced meat, on the other hand, went way up. Moksel's banks refrained from collecting another DM 50 million in debt to save the company from total collapse.

In 2001 the industry began to recover from the mad cow disease crisis and there was hope that Moksel's decade-long string of troubles might be over. The company reported net income of EUR 10.3 million that year--its best showing in ten years--on sales of EUR 1.89 billion. Exports were growing, the company's operations were more efficient after all the restructuring, and Moksel's modern facilities, a burden during times of overcapacity, now gave it a competitive advantage. The company increased its organic meat offerings and anticipated substantial growth in sales of convenience foods. In 2001 Moksel increased its share in Eyckeler & Malt, an important producer of prepackaged meats, to nearly 75 percent.

In 2002 Moksel finally found an investor. The Dutch firm Sobel acquired Werner Folger's 50 percent stake for EUR 100 million, took on Moksel's debt and announced plans to invest EUR 40 million over the next two years. Moksel's shares rose 70 percent on the news. Sobel formed the Bestmeat Company as a holding company for Moksel. Bestmeat eventually increased its stake in Moksel to 85 percent and acquired Dumeco, the Dutch meat industry's market leader, as a sister company to Moksel. Moksel's sales and net income in 2002 fell slightly to EUR 1.8 billion and EUR 7.2 million, respectively, but sales in the convenience products division rose 23 percent. Overall, sales of frozen and convenience products had grown five times since 1997. The slaughtering business, however, continued to stagnate. Moksel leadership said the company was still in no position to pay dividends. In 2003 Bestmeat announced that it was planning to take Moksel off the market. Tillman reportedly was being considered for a leadership position at Bestmeat, leading to speculation that Moksel and Dumeco might merge.

Principal Subsidiaries: Alexander Moksel Import-Export GmbH; ALMOX Süddeutsche Häutehandelsgesellschaft mbH; Eyckeler & Malt AG; Eyckeler & Malt Geflügel-GmbH; G.u.P. Salomon GmbH; IFT International Food Trading GmbH; Paulsen-Gruppe; PROMOX Handelsgesellschaft mbH; Thomsen Im- und Export GmbH; EGN Erzeugergemeinschaft für Qualitätsfleisch Ndb. Schlachtbetrieb GmbH; Fleischkontor Moksel GmbH; Fleischzentrale Südwest GmbH; Fleischzentrum Anhalt GmbH; Fleischzentrum Lausitz GmbH; Fleischzentrum Neustrelitz GmbH; Klaus-Dieter Fuchs GmbH; SBL Schlachtbetrieb für Qualitätsfleisch GmbH Landshut; Voss & Co. GmbH; Landhof "Drömling" Köckte GmbH; Otto Nocker GmbH; Salomon Hitburger GmbH; Salomon Meat GmbH; Tatiara Meat Company Pty. Ltd. (Australia).

Principal Competitors: Südfleisch; Cremonini S.p.A.; Nutreco Holding N.V.; Campofrio Alimentación; ConAgra, Inc.; Smithfield Foods, Inc.; Frimancha.

Further Reading:

  • Bauchmüller, Michael, "Niederländer kaufen Moksel," Süddeutsche Zeitung, December 12, 2002, p. 21.
  • Brost, Marc, et al., "Mahlzeit! Es ist angerichtet," Die Zeit, January 4, 2001.
  • "Company Said the Extremely Negative Development of the 1994 Market," AFX News, February 2, 1995.
  • "Fleischkonzern Moksel schwer angeschlagen," Süddeutsche Zeitung, February 3, 1995, p. 21.
  • Köhn, Rüdiger, "Banken retten Fleischhersteller Moksel," Financial Times Deutschland, April 19, 2001.
  • ------, "Moksel Seeks Investor," Financial Times Deutschland, December 29, 2000, p. 16.
  • Krill, Hannes, "Freispruch für den verstorbenen Franz Josef Strauss," Süddeutsche Zeitung, July 13, 1994, p. 46.
  • Maier-Mannhart, Helmut, "Moksel hofft auf eine bessere Zukunft," Süddeutsche Zeitung, May 30, 2001, p. 30.
  • "Moksel Chairman Wuest Steps Down Effective Feb 18," AFX News, February 13, 1997.
  • "Moksel drängt in die Veredelung," Süddeutsche Zeitung, June 3, 1992.
  • "Moksel forciert Börsen-Abschied," Süddeutsche Zeitung, July 18, 2003, p. 23.
  • "Moksel ist auf Partnersuche," Süddeutsche Zeitung, June 3, 1998, p. 33.
  • "Moksel übersteht BSE mit blauem Auge," Süddeutsche Zeitung, June 19, 1996, p. 19.
  • "Moksel weiter auf schwachen Beinen," Süddeutsche Zeitung, June 7, 2000, p. 31.
  • Roth, Terence, "Bonn Backs Waigel, Calls Reports Untrue," Wall Street Journal, March 23, 1993, p. 2.
  • "Salomon lässt Moksel blutrote Zahlen schreiben," Süddeutsche Zeitung, July 13, 1993, p. 17.
  • "Schlachten allein genügt nicht mehr," Bayerische Staatszeitung, June 13, 2003, p. 21.
  • Tagliabue, John, "Mad Cow Disease (and Anxiety)," New York Times, February 1, 2001, p. C1.

Source: International Directory of Company Histories, Vol.59. St. James Press, 2004.