Capacity 700.000 tons
Agristo invests 200 million euros in French fries production
The Belgian-Dutch French fries producer Agristo is on a collision course. In 3 years, it invested around €200 million in the production and processing of French fries. Not at the beginning of 2019, but within a few months the next production line should be up and running.
Agristo opened officially opened its fourth chip factory (in Wielsbeke, near Kortrijk) at the beginning of December. There are 2,4 million portions of chips per day produced. At the time, the expressed ambition was to start with a second production line at the beginning of 2019.
700
thousand
New production line
The Belgian family business does not let grass grow over the growth plans. In an interview with From Tijd CEOs Hannelore Raes and Filip Wallays let us know that a second production line should be up and running within a few months. This will increase the production capacity in Wielsbeke to around 250.000 tons. Together with the factories in Tilburg, Harelbeke and Nazareth, the total capacity will increase to more than 700.000 tons. In addition to chips, mashed potatoes, potato croquettes and other specialties are also made.
Agristo has €200 million at its disposal to make investments. That amount is spread over 3 years: €50 million is earmarked for the construction of the new production line. Currently it has 175 vacancies, despite the fact that the most efficient European chip factory operates with a minimum of staff. The company has 730 employees.
More potatoes
Due to the increase in production in Wielsbeke, Agristo needs considerably more potatoes. Agro Director Steven de Cuyper had previously know that it wants to conclude more contracts in western Belgium and northern France. The number of growers and the acreage are both increasing this year. The northern French arable areas such as Picardy and Nord-Pas-de-Calais still offer many opportunities for potato cultivation. In the contract price comparison van Boerenbusiness Agristo comes out as the best paying for 4 out of 6 contracts.
With a turnover of €350 million, Agristo is in the top 10 of largest French fries producers worldwide. The €200 million investment is a significant step for the family business, which has no outside investors. Wallays recognizes that producing French fries is capital intensive; According to him, turning turnover is the only solution. "We sell 1 kilo of chips for €0,60. At that price you have to generate turnover. The gross profit margin is between 10% and 12%."
Double turnover
Raes and Wallays are not lacking in ambition. "In the next 5 years we want to double our turnover to €650 million. Now we have a world market share of 4%, which should be 2023% in 7. This way we can push through to the top 5." By comparison, market leader Lamb Weston has a market share of 30%.
This growth ambition is realistic because French fries are on the rise worldwide. The CEOs call the food 'culturally neutral' and cheap. Sales are growing at an annual rate of 2%, mainly thanks to Asia and Africa. In percentage terms, China and India are growing fastest. Potatoes have more nutritional value than rice, cultivation is more labor-extensive and uses less water. “McDonald's is the perfect missionary,” said Agristo.
Belgium fries country
The importance of the Belgian chips sector is clearly noticeable when you compare the Flemish investment figures. For 2016, Agristo is in 10th place, with an investment amount of €43,33 million. This was invested in tangible fixed assets, such as land, buildings and machines.
Clarebout Potatoes (the largest Belgian French fries producer) comes in 6th in that list, with an amount of €91,57 million. Alpro (the producer of soy drinks) is also in 9th place, with €64 million in investments. This information has been compiled by trade information specialist Graydon Belgium.
The Belgian industry processed about 2016 million tons of potatoes in 4,4, a record. Romain Cools from Belgapom expected that in 2017 a new record of 4,5 to 4,6 million tons will be set. Provisional figures also indicate this.
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Niels van der Boom
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