Interview Hans Meeuwis
'Beet cultivation must pay off for our Cosun members'
Food group Cosun, which includes sugar producer Cosun Beet Company, French fries group Aviko and inulin producer Sensus, will be implementing a new strategy in the coming years. In this, choices were made which activities belong to the core business and which do not. New high-quality activities in plant-based ingredients such as proteins, dietary fibers and sweeteners are being developed at an accelerated pace and introduced to the market. It should lead to a structurally higher financial performance for the cooperative company and therefore also a better return for the affiliated members. "We should all be proud of what we do," said the new CEO Hans Meeuwis.
He is not of farming descent, laughs Hans Meeuwis in the digital interview on Teams. He comes from a real working-class family, where his father, as a cable laying company for the PTT, has literally dug in almost all types of soil in the Netherlands. Meeuwis herself has had a career of more than twenty years, especially in the world of food ingredients. First in various management positions at biotech concern DSM and later at dairy concern FrieslandCampina. Since the summer of 2021, Meeuwis has been able to call himself CEO of cooperative food group Royal Cosun.
A structurally better financial return
This is a novelty for Cosun in this century, because the three predecessors of Meeuwis had all had careers within Cosun before they were allowed to hold the highest position within the group. According to Meeuwis, the ten-month training period went well, which is also confirmed by Dirk de Lugt – the chairman of the Supervisory Board. And during this period, Meeuwis has also been at the helm of the new strategy that Cosun has developed, entitled Unlock 25. With the aim, to summarize it briefly: to provide structurally a better financial return to the member growers and to invest in a sustainable growth of the group by making maximum use of the possibilities that plants offer.
Cosun achieved a record turnover of €2021 billion in 2,3, but closed with a net loss of €8 million. The latter is mainly due to incidental expenses, underlying the group saw the EBITDA rise by 32% to €75 million. However, these results are insufficient to optimally satisfy the cooperative's member growers. The payment to them in the form of the beet price is €40 per net tonne of sugar beet, although it is half a euro higher than in 2020, but it is too low for a financially good return for the members. As with Cosun, agricultural entrepreneurs are also confronted with rising costs for cultivation, which they would ultimately like to see compensated in the beet price. That is why the financial goals of the new strategy are clear: this beet price must be at least €2025 per tonne from 45, or 12,5% higher than today. The EBIT should reach €300 million, roughly a third higher than last year. "A great ambition, but we are going for it", says Meeuwis.
Not everything is up and running
Such strict financial and also accountable targets for the shareholders were not Cosun's first nature, but according to Meeuwis they are necessary. "Clear goals give a focus and drive within the group and it makes you sharper. It also makes the perspective clear, which is important for our members and employees. Moreover, the realization of them is very important, because as a cooperative we are there for our to provide members with a good return from beet cultivation." As a result, Cosun will first optimize all business processes and look at where literally profit can be made. In the new strategy, after an extensive market analysis, the portfolio of companies and activities was also examined, explains Meeuwis. In addition, investments are made in new strategic pillars. "But it is certainly not the case that everything will be overhauled. I do not believe in that. We are building on a solid foundation, we are a strong company."
Cosun has summarized the company's new course in four directions. Cosun Beet Company (turnover €811 million) and the maximum valorisation of the sugar beet is and will of course remain a core business of Cosun. Expansion in sugar extraction, for example through an alliance or a takeover within the EU, is no longer an option, hints Meeuwis. Sugar as a product is too bulky for that, and as a market too volatile. "We want to extract as much value as possible from the beet," says Meeuwis. We have been working on this for some time now, for example by extracting vegetable protein from beet leaves or developing biobased ingredients for cosmetics and homecare products. We want to accelerate that process in the coming years."
Conquer market share in EU and China
French fries producer Aviko, the most important branch within Cosun with a turnover of €907 million, also remains an important branch within Cosun. With Aviko, the food group aims for profitable growth in Europe and its second home market, China, says Meeuwis. Aviko focuses on French fries specialties with a higher added value. The brand new factory in Poperinge, Belgium, will be completed in the spring, an investment of €220 million. "The factory can then start operating in the course of this year, which looks good," says Meeuwis. The factory can then process 350.000 tons of potatoes on an annual basis.
The CEO of Cosun does not expect any problems in the availability of raw materials, now that contract prices will also have to rise due to inflation and higher costs for growers. "This project has been prepared for some time and we are mainly looking for potato cultivation in Northern France. We are positive about the growth opportunities for Aviko there."
Ambitions in green and health
Green and health-promoting ingredients, such as dietary fibre, vegetable protein and biobased ingredients, will be a new component within Cosun. Cosun has great ambitions in this regard, because in 2030 this branch of sport must account for 30% of the company's turnover. In other words, based on last year's turnover, just under €690 million. Dietary fibers are not new to Cosun, because the group has been active in it for three decades with the Sensus company, which extracts inulin from chicory roots. "The inulin market is booming and the demand is greater than the supply," says Meeuwis. At Sensus, we are therefore going to invest in expanding capacity. We are also looking at expanding with new applications of inulin and raw materials."
In vegetable protein, in addition to extracting protein from beet leaves, Cosun is also looking at other high-quality protein sources such as potato protein and a protein isolate that can be extracted from the fava bean. The products that are developed from this can be used, for example, in dairy substitutes. A third application is that of biobased ingredients in, for example, cosmetics or homecare products. "With these developments, we are responding to important social trends that also have an impact on the market, such as the growing demand for healthy food, the protein transition and vegetable replacements for ingredients based on fossil raw materials. In this way we as Cosun can open up completely new markets. tap", explains Meeuwis. "This fits our competencies and is a playing field in which we can be successful."
Cosun also wants to continue to grow in the valorisation of co-products from the food industry into animal feeds via the Duynie division or via bio-fermentation. The co-products, such as spent grains, can also be a source of innovations in the food chain. Here too, Cosun has made choices as to which activities do and which do not match the group's vision for the future, says Meeuwis.
Breaking through into new markets
Cosun's new strategy should lead to the company growing in turnover, increasing profitability and achieving a better beet price. Partnerships and acquisitions to accelerate the goals are also part of the plan, according to Meeuwis. The expansion in vegetable ingredients means that Cosun is growing in a market that is less subject to price fluctuations and can therefore contribute structurally to the payment to the cooperative's member growers. Meeuwis is confident that Cosun will be able to break through in the new markets it wants to conquer in the coming years. "I really believe in this vision for the medium and long term. Of course we are also fully committed to improvement in the short term."
In a period in which the cooperative is no longer a matter of course for some agricultural entrepreneurs, Meeuwis emphasizes strongly that he believes in the organizational model. "The cooperative is the model of the future, really. Working together in the chain for the long term and in a future-proof way. Look, here at Cosun we actively work together with our more than 4.000 employees to do things right for our members, with "We also contribute to society with our innovative plant products for our customers. How nice is that? Working together on perspective for a great sector. It would be great if we could all achieve this together."
Eric the Thrush
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