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DB_Silver_Fox’s Substack
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A business based in Spain - a global leader in its lane!

A business based in Spain - a global leader in its lane!

$VIS.MC - Viscofan S.A. - Sí, por favor

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DB_Silver_Fox
Jul 09, 2025
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DB_Silver_Fox’s Substack
DB_Silver_Fox’s Substack
A business based in Spain - a global leader in its lane!
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First of all I want to say that the business’ main product/products cover my first requirement which is: it should be un-exciting! Boring! - check

🏭 Viscofan’s Modus Operandi (Business Model)

1. Core Focus: Meat Casings

  • Global leader in artificial casings — cellulose, collagen, fibrous, plastic — offering full product range worldwide

  • Manufactures casings through extrusion and converting processes (cutting, pleating, printing), tailored for industrial sausage and meat processing .

  • Holds dominant global market share: ~50% in cellulose, ~33% collagen, top 3 in fibrous, and top 5 in plastic en.wikipedia.org+1informeanual2023.viscofan.com+1.

2. Strategic Pillars (Beyond25 Plan)

  • Service, cost, technology, sustainability form the operational foundation informeanual2023.viscofan.com.

  • Four management regions—EMEA, NAM, APAC, SAM—plus a “New Business” unit to enhance flexibility and regional adaptation informeanual2023.viscofan.com+2informeanual2023.viscofan.com+2globaldata.com+2.

source: https://public.viscofan.com/investor-relations/financialinformation/en/Presentaci%C3%B3n%204T24_EN.pdf

3. "Traditional" vs "New Business" Segments

  • Traditional: Core meat-casing business, focusing on innovation and efficiency.

  • New Business: Expands into plastic packaging, edible casings, functional/nutra-pharma products, medical uses, vegan ingredients, pet snacks, cosmetics reuters.com+5informeanual2023.viscofan.com+5en.wikipedia.org+5.

4. Vertical Integration & Technology Ownership

  • Owns its machinery designs and works with regional equipment manufacturers in Navarra .

  • Built cogeneration plants supplying electricity to operations and selling surplus

5. Global Footprint & Defense Strategy

  • Presence in 13 countries with manufacturing centers and over 100 markets

  • Strategy focuses on regional production to minimize trade risks and respond to local food standards (e.g. Halal, beef-free) .

  • Built resilience: defensive model less vulnerable to economic cycles; sustained profitability in pandemic

6. Financial Discipline & Innovation Partnerships

  • Maintains conservative financial policy, reliable dividend growth

  • Engages in corporate venturing, partnering (e.g., with Mondragon) on sustainable food-tech innovation iese.edu.

🔍 Summary: How Viscofan Operates

Viscofan runs a dual-track model:

  1. Traditional stronghold: Cement dominance in global meat-casing market via proprietary manufacturing processes, regional flexibility, and customer-oriented production.

  2. New-growth branch: Diversifies into adjacent and emerging markets—packaging, health & wellness, medical, vegan, pet, cosmetics—leveraging technical know-how.

This is supported by vertical integration, regional manufacturing platforms, financial prudence, and innovation partnerships, all under its “Beyond25” strategic vision focusing on service, cost control, tech mastery, and sustainability.

🧭 SWOT Analysis – Viscofan S.A. ($VIS.MC)

🟩 Strengths

  1. Global Market Leadership

    • World’s largest producer of artificial casings (collagen, cellulose, fibrous, and plastic).

    • Serves over 100 countries with production facilities on multiple continents.

  2. Provisioning & Non-Discretionary Demand

    • Provides vital inputs for food security and protein transformation, especially in emerging markets.

  3. Technological Edge

    • Advanced R&D and patents in casing production; known for product innovation and efficiency.

  4. Vertically Integrated

    • Controls entire production chain: raw material processing, manufacturing, packaging, logistics.

  5. Capital Discipline

    • Conservative financial management, robust cash flow, relatively low leverage.

  6. Family-Influenced, Ethical Governance

    • Though publicly traded, it retains a culture of stewardship and Spanish industrial seriousness.

Corporación Financiera Alba

  • Holds ~14.3% of total shares and voting rights—making it the largest single shareholder. Most of the shares in Corporación Financiera Alba are held by the March Family.

source: https://elpais.com/economia/negocios/2025-02-04/del-acero-a-los-colegios-de-elite-la-estrategia-inversora-de-la-familia-march.html?utm_source=chatgpt.com

🟨 Weaknesses

  1. High Industry Specialization

    • Narrow focus on a single industrial niche (casings); limited diversification. With the new strategy, the new business lines are going to become a major lever for diversification and growth.

  2. Raw Material Volatility

    • Exposed to fluctuations in collagen and cellulose pricing (driven by livestock and energy markets).

  3. ESG Scrutiny

    • Animal-based collagen products face potential long-term ESG or ethical challenges in some markets.

  4. Mature Market Constraints

    • Low growth in developed markets; relies on expansion in developing economies for top-line growth.

🟦 Opportunities

  1. Emerging Market Penetration

    • Expanding meat consumption in Asia, Africa, and Latin America opens vast new casing markets.

  2. Plant-Based Innovation

    • Could lead development of vegan or plant-based casings for growing alt-protein segment.

  3. Vertical Expansion into Food Safety

    • Potential to expand into adjacent products (food preservation, packaging innovation).

  4. Strategic M&A in Biotech/Foodtech

    • Could acquire complementary biotech or sustainable material firms to future-proof its model.

🟥 Threats

  1. Regulatory and ESG Pressure

    • Animal-derived inputs may face legal, environmental, or reputational risks long-term. High margin business but somewhat exposed to disruption (technological or legal).

  2. Health Trends & Veganism

    • Shifts toward vegetarian or meat-free diets in Western markets could modestly impact demand.

  3. Geopolitical Supply Risks

    • Global logistics and input supply chain disruptions (e.g., collagen from Brazil or China).

  4. Technological Displacement

    • Alternative protein delivery or casing-free innovations (e.g., lab-grown meat formats).

🏛️ Custodial Verdict

Viscofan exemplifies invisible provisioning, enduring function, and frugal excellence. It is:

  • A pillar of civilization's basic infrastructure (food transformation),

  • Governed with ethical restraint

  • Positioned to quietly endure through multiple macro cycles.

It may not be glamorous, but it feeds the world—and the portfolio—with humility and strength.

Some more information on the most influential shareholders of the company - the March Family:

🏛️ Origins & Legacy

  • Juan March Ordinas (1880–1962) founded Banca March in 1926 in Mallorca. Rising from tobacco and arms smuggling, he amassed immense wealth and influence, becoming known as the “Rockefeller of Spain” corporacionalba.es+15en.wikipedia.org+15elcierredigital.com+15.

  • His son, Juan March Servera, along with his heirs, transitioned their industrial holdings in cement into Corporación Financiera Alba in 1986 cincodias.elpais.com+3en.wikipedia.org+3elpais.com+3.

🧬 Family Structure & Control

  • The founding siblings—Juan, Carlos, Gloria, and Leonor March Delgado—collectively held 100% of Banca March, which in turn held ~66.7% of Alba corporacionalba.es+15es.wikipedia.org+15en.wikipedia.org+15.

  • As of early 2025, major shareholders at Alba included:

    • Juan March Delgado: ~18.7%

    • Carlos March Delgado: ~19.3%

    • Banca March: ~15.0%

    • Other siblings (Juan March de la Lastra, Juan March Juan, Catalina, Gloria): combined >15% cincodias.elpais.com+1cincodias.elpais.com+1en.wikipedia.org+1en.wikipedia.org+1

🌱 Governance Style & Philosophy

  • The family maintains tight, long-term control, running Banca March with a reputation for extreme prudence and solvency—declared “safest bank in Europe” in 2010 EU stress tests es.wikipedia.org+10en.wikipedia.org+10theguardian.com+10.

  • They place a strong emphasis on cultural and intellectual philanthropy, initiated by Juan March’s founding of the Juan March Foundation (1955), supporting humanities, music, visual arts, and social sciences

  • Today, second-generation brothers Carlos and Juan March Delgado share leadership—with Carlos serving as chairman of Alba and vice-chair of the Foundation, while Juan oversees cultural and academic patronage

🧭 Recent Activity

  • In 2025, the family launched a takeover bid to delist Alba at €84.2/share—a 79.5% premium—seeking operational flexibility and cost savings forbes.com+7cincodias.elpais.com+7thecorner.eu+7.

  • They are balancing tradition with selective growth, recently investing €600 M in Nord Anglia (private education), highlighting their disciplined, diversified strategy elpais.com.

Competition:

🧩 1. Devro plc (UK – collagen casings)

Now owned by Saria Group (Germany)

  • Focus: Edible collagen casings

  • Strengths: Innovation in collagen tech, strong presence in Europe and emerging markets

  • Weaknesses: Limited diversification; smaller global reach than Viscofan

  • Recent Development: Acquired by Saria (2023), part of the Rethmann Group—adds industrial stability but may face integration challenges.

Devro is Viscofan’s primary collagen peer, but lags in cellulose and plastic casings. A focused rival, but not as broad.

🧩 2. Nitta Casings Inc. (Japan / USA – cellulose & collagen)

  • Parent: Nitta Gelatin (listed in Japan)

  • Strengths: Long heritage, strong R&D, particularly in North America

  • Weaknesses: Small global market share, weak in emerging markets

  • Specialty: Focus on cellulose casings used in high-speed sausage production.

A respected technical player with limited global reach. Not a threat to Viscofan's leadership, but holds niches in the U.S. and Asia.

🧩 3. ViskoTeepak (Finland – cellulose, fibrous, plastic)

  • Ownership: Part of Finnish meat cooperative (Ravintoraisio Group roots)

  • Strengths: Diverse material range, strong sustainability focus

  • Weaknesses: Much smaller scale; mid-tier global distribution

  • Reputation: Strong in custom and specialty casings

A versatile competitor with a loyal customer base in premium segments. Collaborative rather than combative posture vs. Viscofan.

🧩 4. Shenguan Holdings (China – collagen casings)

  • Focus: Dominant in Chinese collagen casings market

  • Strengths: Massive production capacity, low-cost model

  • Weaknesses: Quality perception, limited Western market penetration, ESG issues

  • Listed on: Hong Kong Stock Exchange

The low-cost Asian challenger, but quality, ESG, and brand concerns limit its ability to scale in Europe or North America.

🧩 5. Fibran S.A. (Spain – natural and collagen)

  • Small family-run Spanish firm

  • Focus: Traditional natural casings, with collagen extensions

  • Strengths: Artisan reputation

  • Weaknesses: Lacks scale or export reach

Not a direct threat, but serves premium meat producers and maintains a complementary niche alongside Viscofan.

🧠 Viscofan’s moat lies in:

  • Product range (cellulose, collagen, fibrous, plastic)

  • Global distribution

  • Technological integration

  • Vertical control of raw materials

FINANCIALS:

  1. Growing revenues

  2. Growing EBIT - consolidating in the 170-200 million euro range

  3. High quality of earnings (CFO close to EBIT - even higher)

  4. Normalized EBIT margins in the 17%-18% range

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