ForFarmers in Eastern Europe
Button: 'We didn't want to miss the Polish boat'
With the acquisition of the Polish compound feed company Tasomix, ForFarmers is taking the step to a fifth European country. During the presentation of the annual figures for 2017 in Lochem (Gelderland), CEO Yoram Knoop stated that the Polish market was a conscious choice. "There are opportunities in Poland that we don't want to miss."
ForFarmers looks back with satisfaction on the results of the past year, in which the operating profit traded above €100 million for the first time. The sold feed volume increased to 9,6 million tons. Knoop assured that the limit of 10 million tons will be exceeded in the future. With the acquired volume from Tasomix (joint venture) this may happen soon. When the Polish authorities give the green light, ForFarmers will obtain about 400.000 tons of extra compound feed.
Poland is a logical choice
According to Knoop, there are 3 reasons why ForFarmers settles in Poland. For example, more than 9 million tons of compound feed can be distributed on the Polish market, of which 6,6 million tons on the free market. The poultry sector in Poland is by far the largest (60%) of all animal sectors, and ForFarmers sees opportunities in this animal segment. "Poland is the European export machine for poultry meat and ForFarmers wants to take advantage of that." According to Knoop, it is typical of the potential that more and more Western companies, such as Plukon, are moving to Poland.
The volume that Tasomix produces is roughly divided into 85% poultry and 15% cattle and pigs. "This creates a more logical division within ForFarmers between cattle, pigs and poultry." Knoop further emphasizes that the facilities in Poland are not inferior to the Netherlands. "We can also apply the knowledge that is available within Tasomix in the Netherlands." The objective of ForFarmers is to occupy a leading position, also in Poland. Therefore, Knoop does not rule out other acquisitions in Poland.
the Netherlands the most important
ForFarmers also wants to continue to grow in the Netherlands; both organically and through acquisitions. "When a feed company knocks on our door, we will definitely talk." Incidentally, the Netherlands is still by far the most important sales market with approximately half of the sold feed volume. Efficiency in the Netherlands is also still miles ahead of the other countries: Germany, Belgium and the United Kingdom (UK).
Jan Potijk, COO at ForFarmers, identifies a number of trends on the domestic market. For example, the number of self-mixers is increasing and the companies are getting bigger. "These companies want more volume, but want to pay less." For that reason, compound feed companies need scale. According to Knoop, it will therefore probably become increasingly difficult for the smaller compound feed companies in the future.
Brexit offers opportunities
A scratch on the result of ForFarmers is the decrease in volume (-2%) and decrease in profit (-9,9% to €13,4 million) in the UK. Button: "We still have some success to do here." Right away new COO and cost savings ForFarmers hopes to do the trick. Knoop does not dare to predict exactly what the impact of the approaching Brexit (March 2019) will be. "We are trying to be ready for the possible scenarios."
In the long run, ForFarmers mainly expects benefits of Brexit. "The British are only 60% self-sufficient in food (meat), which means that production can increase." According to Knoop, this logically also increases the demand for animal feed. “The advantage of additional production in the UK is likely to outweigh the disadvantage of export loss in the NetherlandsKnob said.
Wouter Job
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