ForFarmers is counting on growth again with strategy

Taking your losses is what ForFarmers did in the first six months of this year. The food company is working on the new one strategy to implement. As a result, all associated costs, including a book loss on the upcoming sale of the compound feed activities in Belgium, are already included as an incidental expense on the balance sheet for the first half of this year. Add to this a sharp decline in operating profit (to €4,4 million) due to a price war in a shrinking feed market and ultimately a loss of €12,8 million results from the accounts. This resulted, among other things, in a sharply falling price on the Amsterdam stock exchange in the first part of Thursday morning. 

Strengthen local teams
Pieter Wolleswinkel, CEO of ForFarmers, is confident that the new strategy will bear fruit for the feed group in the second half of the year. ForFarmers expects a recovery in results in the coming period. Conquering and recapturing markets is the goal. "In line with our new strategy, we have strengthened our local teams. They have now been given broad responsibility in the purchasing and sales of feed and we hope that they will be able to anticipate market developments more quickly," Wolleswinkel explains. "As a result, for example, we have already been able to eliminate thirty management positions. We want to be on the market for a short time and do better than our competitors." ForFarmers made a total of 87 employees redundant in the first half of this year.

Livestock farmers are increasingly looking more closely at feed prices, Wolleswinkel notes. ForFarmers sees that entrepreneurs are switching their feed strategy more quickly than before, depending on the yield prices for milk, pigs or chickens. "If the yield prices are lower, a livestock farmer also adjusts his feed composition to reduce costs. We want to work with him or her even more in this. The farmer's needs are leading. But overall we just have to offer good feed at a competitive price. price." Wolleswinkel does not want to and cannot indicate how competitive that price will be until the end of the year and how the feed price will move in the coming period. "Feed prices have been at relatively high levels in recent years. Proteins are still expensive, while grains are flying in all directions on the market. Predicting what the feed price will do until the end of the year is impossible. We look at it from month to month. month."

British choice for plan B towards dairy farming
ForFarmers has suffered the biggest blows in feed sales over the past six months. Sales of pig feed declined in the Netherlands, Belgium, Germany, Poland and the United Kingdom due to a shrinking market. Roeland Tjebbes (right in the photo), the CFO of ForFarmers, gives as an example that the British pig herd has shrunk by 10% in the past six months. Yet feed sales in the UK fell the least compared to other countries in the first six months of this year: by 1,5% to almost 1,16 million tonnes. Although ForFarmers lost sales in pigs and poultry, sales to customers in dairy farming are growing strongly, according to Tjebbes. 

After the failed merger with 2Agriculture in the UK, ForFarmers has therefore switched to plan B, according to Wolleswinkel, and that is growth in British dairy farming. "We can certainly strengthen our position there and serve more customers with our knowledge and skills. That gives confidence." Wolleswinkel has less confidence in independent growth in the British pig and poultry feed market. There, integrations, in which slaughterhouses take control, are gaining the upper hand on the market. "The free market in which we operate is becoming increasingly smaller. That is why we are looking at collaborations with companies to realize permanent feed sales. It is still too early to discuss this further." 

Competition is stealing share of the pig market
The feed volume in the Netherlands and Belgium has fallen by 6,3% in the past six months to just under 2,2 million tons. ForFarmers has lost sales, especially in the pig sector, due to stoppages, but also because competitors have stolen customers from the company. According to Tjebbes, the volume in dairy farming has remained relatively stable, while less feed has also been sold to poultry farms. This is mainly due to the welfare concepts such as 'Better Living' that have been further implemented in this sector. "That affects our volumes, but it does result in a better broiler sector," CEO Wolleswinkel responds. "We therefore welcome this development."

In Germany, ForFarmers is well positioned in the feed market for laying hens, which has largely compensated for the decline in feed sales in the pig farming industry. However, the feed company is watching the developments in Poland with great pleasure. Not only was ForFarmers able to achieve good growth in the sale of poultry feed there, but the company also recently acquired the feed company in that country Piast about. "That is a very important step for us in Poland, which we are very happy with," said Wolleswinkel. "We will soon be able to design factories specifically for one sector, which will increase efficiency. We will also have a much better geographical spread in the country." The Polish antitrust watchdog must still approve this deal. If that happens, ForFarmers expects to complete the transaction in the last quarter of this year.