Interview Dick Hordijk
'It is precisely now that we work together with farmers and in feed'
Agricultural cooperative Agrifirm has had a good year and can pay out €27 million to its members. This despite a year full of challenges, including the now well-known corona crisis. How did the company manage that? And what are the challenges and goals for the coming period? Boerenbusiness talked about it with Dick Hordijk, the CEO of Royal Agrifirm Group.
The net result of Agrifirm last year amounted to €39,8 million, compared to €17,2 million a year earlier. The year 2020 was therefore mainly dominated by profit recovery. That worked. For example, not only is the net result higher, but the solvency is above 56% and the company records an operating cash flow of €56,7 million. This results in a profit distribution of €10.000 million for the approximately 27 Dutch cooperative members.
The past year was of course marked by the corona crisis. Still, you got through this well. Can you explain that?
"It is a combination of various factors. The corona crisis was negative for us, for example, because a lot of chips potatoes went to the animal feed industry. At the same time, Welkoop benefited enormously from the home-sitters. After all, plenty of swimming pools and garden sets were purchased. Those 2 factors have each other reasonably well. The reorientation and reorganization that we devised 2 years ago and implemented last year also had a positive effect."
"We also diversified risk with our international strategy. We had a very good year in Asia. China was the first to be hit by the corona crisis, but was also the first to be back in business. In short: there is always a country where the situation is disappointing, but you can now compensate for that with a country where things run smoothly. Last year was the perfect example of this."
You achieved a higher net result, but sold less feed. What has been the golden tactic?
"This is largely due to our purchasing positions. The year 2019 was very difficult for us. The timing of the purchasing positions then had a negative effect. In fact, we purchased our raw materials too expensively in that year. Last year the situation was the other way around. Then our purchasing position turned out very well. It's a matter of market movements. We explained that to our supporters in this way."
"Another factor that played a role is the fact that we have made a serious reorganization in production and warehouse. We sell less volumes and so we had to close factories. The factory in Utrecht is an example of this. It is difficult decisions, but they were necessary. However, it now appears that we made those choices at the right time."
The nitrogen crisis in the Netherlands is of course also one of the main themes in the past and coming period. How does Agrifirm deal with this?
"We are a large company. We can therefore adapt by closing or optimizing factories. If the government does indeed take a serious step towards reducing animal numbers, then we have to reorganize. We, as a large group, can do that. A small company It may have only one factory and therefore cannot close it. That sounds like - and of course it is - bad news, but it can also have an advantage. It changes the playing field. I hope that we therefore more cooperation."
"How do I see that? An example is cooperative purchasing with several parties. The European Union makes many demands on the raw materials. If everyone has to figure that out for themselves, it costs a lot of time and money. If we separate production and purchasing in separate cooperatives and we work together with other parties for this, then we can tackle this more efficiently, but the time has to be right for that."
The past year was focused – strategically – on recovery. What is the strategic goal for this year?
"We started our new four-year strategy this year. Our credo is: 'We stand for a responsible food chain'. This includes managing our impact on animals and the environment, but also the economic revenue model of the farmer. We sometimes hear our members say: "I can't think green if I'm red", and we want to change that. How can we help our members to realize a better revenue model? An example is the realization of more, different concepts for retail. We can offer this for an additional cost of X amount per kilo and then we'll see who is interested."
"If we look purely at the company's strategy, we naturally want to establish a strong, healthy cooperative. We want to strengthen the strength of the Dutch feed company with income from abroad. It is an interaction. We bring our Dutch knowledge to the abroad and the income generated there, we return to the Dutch feed company, so that we can invest in research & development, for example. We want to offer solutions for the many challenges that lie ahead."
And if we only look at the feed sales. What is your expectation?
"Politics will of course determine, together with society, how many animals there will be in the future. And that will be critical for our sales. Because there is little clarity, it is also difficult to make predictions. It is one of the reasons that we we as Agrifirm are getting involved in the political debate Not only we, but the entire sector is looking forward to a clear policy line and a long-term vision The world population will grow to 2030 billion people by 9,5 and we already have a shortage of agricultural land. is: do we want the Netherlands to play an important role in the agricultural landscape?
"The intrinsic value of the food chain also has an effect on how we look to the future. Watchmakers in Switzerland or wine producers in France are not treated the way we treat farmers now. We should be proud of the cheese, sausage and other things that we We can't let our excellent export position suffer from the emotional force field we find ourselves in."
"Of course I also understand that politicians take responsibility and I respect that. But the quality of the information they take in or are given can be much better. and have to wear."
Do you also see that uncertainty among Agrifirm members?
"Yes, certainly. As I said, we are not the only ones who want to see a clear policy vision. A long-term plan. That is something that farmers are eagerly looking forward to. I think the resilience of the average farmer is fantastic. most other people had long given up on the struggle. However, the underlying sentiment is pessimistic. Many farmers feel they are not being heard. At the same time, we, as a sector, can sometimes contribute a bit more. We could invite more people to the farm to show how well the sector is doing. The underlying pessimism among farmers should not become dominant."
Finally. What would you like to give the farmer?
"We are all willing to participate in the transition of the agricultural sector. We are not putting our heels in the sand. However, it is necessary that politicians in The Hague create a realistic environment and give them the time to make that transition. should try to reason from the farmer's perspective in order to compose a constructive policy. As a sector we will then show that we can really do it."
Kimberly Baker
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