ForFarmers is looking outside Europe

ForFarmers is also considering making acquisitions outside of Europe, as can be concluded from the new strategy that the listed animal feed group published today (September 15). Closer to home, digitization on the farm is an important theme.

In the new strategy called 'Build to grow', ForFarmers outlines the plans for the next 5 years. Despite the fact that ForFarmers is already the largest animal feed group in Europe, the focus remains on further growth and expansion. The company aims to remain the largest in Europe with the aim to be active in 2025 countries by 7. This should be a mix of the existing home markets and growth markets.

Outside of Europe
It is striking that ForFarmers is considering the move outside Europe. In the past, acquisitions were mainly made to strengthen their position in the 4 core countries (the Netherlands, Germany, Belgium and the United Kingdom). Poland was added a few years ago. In the coming years, two more countries will therefore be tapped. What those are is still undecided. The strategy refers to 'carefully chosen new growth markets'.

That's where the guessing begins. Because in which countries livestock farming is still growing strongly? In Lochem, they are thinking of Asian growth markets such as China or Vietnam, where competition in the form of Agrifirm and De Heus is already active. Or should we rather think of a country like Romania, where livestock farming is still growing. An interesting case, not least for investors who can count on extra dividend. The board also sets itself a profit target (Ebitda) for 2025 between €125 and €135 million. Last year this key figure was €88,5 million, 

Distinguish on cost
The takeover drive is the most appealing part of the new strategy, although it does not come as a surprise at the same time. ForFarmers also focuses on a customer-oriented approach and the development of innovative feed concepts, but the animal feed group is not unique in this regard. How do they want to bring the feed to the farmer? ForFarmers believes that it can distinguish itself on cost price in existing markets, which is an appealing point of view for livestock farmers.  

It is also underlined that further digitization is the aim, both in the internal processes and at the customer's farm. Exactly how that will happen is not disclosed. However, it is stated that digitization is still in its infancy. Furthermore, the target is to have at least €2025 cut in operational costs by 10, a process that started a few years ago by closing locations in the United Kingdom.  

Wouter Job

Wouter Baan is Head of Meat & Dairy at BoerenbusinessAt DCA Market Intelligence, he focuses on dairy, pork, and meat markets. He also monitors (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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