Animal numbers in our country are under pressure, according to ForFarmers. In addition to a decline in the pig population, the animal feed group also expects fewer dairy cows and laying hens in the coming years. ForFarmers wants to arm itself against this by growing elsewhere. Including in Poland. What exactly do the acquisition plans look like?
In new strategy For 2020 - 2025, ForFarmers has mapped out how the most important animal categories will move in the different countries. The prospects for the Dutch home market are purely negative. Shrinkage is expected in cattle, pigs and poultry. ForFarmers expects a decline of up to 2,5% in dairy cattle and laying poultry. The number of pigs is shrinking considerably faster.
'Poland place to be'
In the remaining countries where it operates, the scenarios are milder. The dairy herd is expected to increase in the United Kingdom, Belgium and Poland. The British pig herd is also expected to grow, CEO Yoram Knoop indicates. "With Brexit looming, the British want to become more self-sufficient in meat production." That offers opportunities. The CEO becomes really enthusiastic when he talks about the market opportunities in Poland, where the animal feed group settled a few years ago. "Poland is the place to be." His words are understandable. Livestock decline is not an issue there and the agricultural sector is professionalizing rapidly.
It can be concluded from the new strategy that ForFarmers wants to arm itself against the shrinking livestock population in Northwestern Europe. The ambition is to remain the market leader in Europe. This emphatically opens the door to takeovers outside Europe, which has so far been unexplored territory.
Yoram Button
At least 300.000 tons
Since 2014, ForFarmers has acquired 2 companies every year, Knoop notes during an explanation of the new strategy. ForFarmers will continue to look to absorb feed companies in the coming years. Knoop outlines a number of conditions that a takeover candidate must meet. One of these is that the volume to be taken over must be at least 300.000 tons, where synergy benefits can also be achieved. This means that many small regional players are dropping out. "It is obvious that we will focus on Germany and Poland in acquisitions, as we do not yet have a leading position in these countries." Poland is an interesting country, especially for poultry, the CEO believes.
Acquisitions in European countries where ForFarmers is not yet active are not excluded, but are also not obvious. Ultimately, ForFarmers strives to achieve a leading position in the countries, which seems difficult in advance in countries such as Spain. Especially because ForFarmers expressly states that it does not want to take over any integrations.
At least 4% growth in animal numbers
ForFarmers also wants to respond to growth markets. By indicating that not only Europe is being considered, the suggestion is made that the search is mainly done outside of Europe. A number of preconditions also apply to the growth markets. One is that a country grows more than 4% annually in animal numbers. Acceptable market risks are another, which means that on paper corrupt countries are eliminated.
ForFarmers also wants to be able to obtain a leading position in the growth markets in the long term, an ambitious goal. By 2025, ForFarmers wants to have spread its wings in 2 new countries and scale up to 7.