C.H. Robinson executive says company open to more acquisitions
by Tim Linden | October 25, 2009
The announcement by C.H. Robinson Worldwide Inc. last month that it had acquired Florida-based Rosemont Farms and its sister company, Quality Logistics, might not be the last such announcement.
Jim Lemke, senior vice president of produce for Minneapolis-based C.H. Robinson, told The Produce News in a recent interview that Rosemont Farms fits very well within the company philosophy and that C.H. Robinson is always open to similar acquisitions. "If the opportunity is there and we feel we can enhance the services we offer, we are always open to new acquisitions."
In general, C.H. Robinson, which bills itself as "one of the largest produce sourcing and non-asset based third-party logistics companies in the world," has typically grown organically, but Mr. Lemke said the firm has kept "cash in hand" to give itself the opportunity to grow via acquisitions.
Although Rosemont Farms is a grower-shipper with assets, Mr. Lemke said that its assets are light and that the company does fit the C.H. Robinson model. "We think they are a very good fit. They have very, very talented people and offer a very high level of customer service," he said.
Rosemont has excellent relationships with its growers and "we think they can help us by teaching us how to collaborate better with growers and suppliers," he added.
In addition, Mr. Lemke said that Rosemont has a "great customer base and 100-plus people highly specialized in customer service."
He added that the purchase will help C.H. Robinson incrementally grow its own customer list.
The parent firm also believes that it can help Rosemont grow by giving that firm access to the global retailing community that C.H. Robinson services. He said that the grower-shipper should also be able to enhance its use of technology and increase its capacity. Rosemont might also begin selling some of its product in the well-known consumer brands that C.H. Robinson markets, including "Tropicana" and "Welch's."
"Those brands would be available [to Rosemont] for its customers who are looking for national brand identity," said Mr. Lemke.
Rosemont will also be able to utilize C.H. Robinson's worldwide logistics capabilities, which should create a more efficient operation.
During this interview, which took place Oct. 4 during the Produce Marketing Association's Fresh Summit in Anaheim, CA, Mr. Lemke also discussed several other industry issues, including the proposed national promotion program, the Produce Traceability Initiative and the collaborative effort the organization has developed with grower-shipper trade associations to offer transportation services to their members.
With regard to the national promotion program, Mr. Lemke said that C.H. Robinson is very interested in helping the debate move forward and allowing the industry the opportunity to fully vet the issue. He said that because of the current economic situation, the timing may not be exactly right to launch such a program, but clearly the company believes it has merit.
Paul Klutes, director of brand sales for C.H. Robinson, is the current chairman of the board for the Produce for Better Health Foundation, which is sponsoring the effort to explore this idea.
Mr. Lemke said that it is a legitimate question to ask if $30 million, which is the proposed initial funding level, is enough money. He indicated that depending upon the goals of the program, that funding level could achieve results.
On the PTI question, he said that improved traceability is a must for the industry and that it is going to happen sooner or later. "We have to help improve the traceability of our product. It will allow for quicker recalls, which is very important."
He said that C.H. Robinson is currently looking at what it will cost to implement a PTI program, but whatever it costs, that is just the price of doing business. "It is just like any other cost you incur to improve your business such as the cost to upgrade a facility or to update your software system," he said. "It is just something you have to do."
Several years ago, Mr. Lemke's division instituted a program with California- based Western Growers Association to offer logistics services for its members. The concept was to pool the shipping needs of those members to secure better rates and service.
Since then, WGA and C.H. Robinson have expanded the program to other shipper groups in Florida, Texas and Idaho.