Cosun wants to grow further abroad with Aviko

The profit for 2024 is €118 million (after member contribution). That is lower than the €163 of 2023. Turnover of 3,4 billion was recorded, 7% less than a year earlier. According to Meeuwis, this is largely due to the fact that three companies were sold in 2023 that did not fall within the strategic activities. The changing situation in the sugar market also has an impact. The return on invested capital was 2024% in 21, well above the target of 12,5%.

2024 was also the year in which the cooperative celebrated its 125th anniversary and received the King Willem I award from Máxima. Good progress was made on Cosun's strategic priorities. The year is mainly marked by the bitter aftertaste of a historically low beet yield and lower beet price.

With average quality, growers get €43,52 per tonne. A huge drop compared to €67,09 in 2023 and €65,18 in 2022. So there is not much more to earn?
"If you translate that to the average yield per hectare of €3.272, you see that this is simply too low. The past few years have been good, but the dependency on the sugar market dynamics is high. As Cosun, we are therefore fully committed to our plan and a future-proof chain and revenue model. I would like to emphasise the importance of this once again. The average arable farmer in the Netherlands has approximately 75 hectares and earns an average of €65.000. In order to continue farming well, a farmer must make it more sustainable. That costs an average of between €500 and €800 per hectare. This means that if the situation remains unchanged, he will earn nothing. That is not possible. We need each other in the chain for that."

"We are here to ensure that earning power increases and that arable farmers can make investments to continue farming well. We cannot do this alone. The government must ensure that sufficient resources remain available so that farmers can continue to farm profitably. That is our appeal to policymakers: take a good look at the level playing field. Ensure stability, perspective and implementation power. Both in costs and regulations compared to surrounding countries, and in making the necessary resources and technologies available. We believe that this can be improved and that we can and should help each other even better. For the benefit of the sector."

The allocation has been reduced to 100%. Are you sorting for a further reduction in the demand for sugar?
"Last year, supply increased due to production and import from Ukraine, among other things. Consumer demand was under pressure, which resulted in an imbalance in supply and demand. This also resulted in a falling sugar price in the second half of the year. We anticipated this by reducing the allocation by 10%."

Are there more growers who want to stop growing beets and offer their member delivery certificates?
"We are committed to future-proof cultivation and have a major interest in making it interesting for our members to continue growing beets. This requires a good revenue model. It is a beautiful crop and it also fits well in Dutch fields. The demand for LLBs is still good and the price is stable. That expresses confidence."

Did all components contribute to profit in 2024?
"The results in 2024 were solid. Cosun Beet Company made a good contribution in 2024, if you look at what happened during the year. Sales of plant-based ingredients, including Sensus, showed good sales growth. This also applies to the internationalisation of co-products. The margin development of both product groups was under pressure last year. We see a normalisation of the margins."

"Aviko has done well with a strong result. If you correct Aviko's figures for the sales of the factories in Cuijk and Norden (in 2023), you will see that 2024 was a particularly good year. We invested in several factories last year. A factory will be completed in China this year. We are looking very carefully at where the growth is and we are building on that. I think we are really a leading player when it comes to potato products. So we are looking at how we can further develop that, by making smart capital investments and growing geographically. We are also looking at how we can add even more value with added value products in that portfolio."

In the sales of fries, a stagnation of growth can be seen. Do you notice anything of that?
"You see that in general. For example, if you look at the recent figures from McDonald's, you see a levelling off of growth. In foodservice, growth has fallen back somewhat in the past year. We believe in the medium and long-term growth in these products and want to continue to invest and grow in this segment within Cosun."

Are there any new products being developed within Aviko that you will be offering?
"We have a very nice portfolio of various types of fries, including our crunchy fries. We want to further develop and upgrade the fries portfolio, with products that respond to the needs of our customers. We do this in combination with growth and development of more plant-based snack products and the development of ingredients from potatoes. For example Potato Cheezz, where we look at how you can make a cheese alternative from potatoes."

Although lower than last year, good results were ultimately achieved. Isn't that something to be happy about?
"The results are solid and when I look at what we are doing, we are really making progress to get more out of the earning capacity of the company. What I am not satisfied with is the dependence we have on the volatility in the sugar market and the impact that has on the earning capacity of our members. That impact is still too great. It was a difficult growing year for the arable farmer, with historically low sugar yields, in combination with the market imbalance and adjustment of the sugar price. This is leading to pressure on the return on beet cultivation. We cannot be satisfied with that, because we were set up as a company for the earning capacity of the members. That is one of the reasons why we want more diversification in our portfolio. We are going to accelerate the plans we have to keep the earning capacity for the grower on track."

How are you going to keep that revenue model going?
"We have a clear plan, in which we make clear choices about how we can improve Cosun's earning capacity. First of all, we look at how we can make a higher return on the invested capital that is already in the company. We are fully committed to improvement programs. We are accelerating that. With cost optimization alone, you will not make it in the Netherlands, with our type of companies. You have to grow as a company. We are focusing on four segments and diversification of the portfolio: sugar beets, potato activities, co-products and food ingredients. We have a sustainable growth strategy for that. Last year, for example, we invested in capacity expansions for Aviko in Poland, China and Western Europe, in order to facilitate further growth. We are doing that in a balanced way in all our companies."

"If you don't do this in a sustainable way, you will ultimately not be competitive and not viable. Sustainability is an important priority for Cosun, throughout the entire chain. We are sticking to our course. With everything that is happening around us, the bar must be raised continuously."

What should I consider when diversifying my portfolio?
"We are committed to sustainable growth in potato products, co-products and food ingredients. If you look at our potato activities, they have developed well in recent years. We are building on that. The same applies to our co-products. Another area is food ingredients. This includes Sensus, with our vegetable proteins and a number of smaller products and innovations. These are new areas. The organic development of these areas requires investment and time. We want to take a step in this area in the coming years, both organically and through necessary acquisitions. We have set ourselves the goal that in the long term around 30% of our turnover will come from high-quality ingredients with added value. On the one hand, we create more stability in our earning capacity in the long term, because you have more cash generators. On the other hand, you build a portfolio that is more future-proof, with vegetable solutions. We have scaled back our activities in the field of biobased materials, based on the opportunities we see in the market."

Last year you said about 2023: 'I would call it a dynamic year'. How would you characterize 2024?
"I have called it challenging now. I have been CEO for 3,5 years now and the turbulence in recent years has been unprecedented. If you look at what is happening macro-economically, the impact of inflation, cost increases, the relatively weak economic growth, what is happening geopolitically and what that does to the supply chains. For example, the impact of sugar imports from Ukraine has contributed to a major imbalance and a strong price correction. And that in a politically uncertain Netherlands. However, we have a solid plan and a clear course and we are fully committed to that. With perspective for the sector."