Interview Farmel
Farmel happier and more profitable without Veco
Farmel had a disappointing year in 2024, at least for the holding company. The company's figures speak for themselves, but also indicate that the negative figures were heavily influenced by developments at its subsidiary, Veco Zuivel. Since this subsidiary is no longer part of the holding company, Farmel has posted much better results again. This year's results even exceeded expectations. Managing Director Aris van Ommeren and Financial Director Johan Westhoff explain these results.
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That Farmel would have such difficulty getting Veco Zuivel up and running wasn't anticipated when it acquired it in the fall of 2021. Farmel and Veco seemed like an ideal combination, but the dairy company in Zeewolde needed improvements and refinements on all fronts. It then became clear that operating a dairy trading company is very different from running a production facility.
Veco better at Inex
Director and co-owner Aris van Ommeren (left in the photo): "We just couldn't get the company running properly." After three years, Veco was sold again to the Belgian company Inex. Van Ommeren: "As a producer, Inex has the knowledge we didn't have, and they also have the resources." Veco Zuivel supplies Jumbo, among others.
Subsidiary Veco Zuivel contributed negatively to Farmel's results last year until its sale, which is reflected in the figures. Farmel Holding posted a negative operating result of minus €2,9 million, compared to an operating profit of €1,1 million the year before. Consolidated revenue reached €670 million last year, compared to €553 million a year earlier. However, the strong increase in revenue was primarily due to sharply higher dairy prices.
Last year's results were disappointing, Van Ommeren and CFO Johan Westhoff (right in the photo) reiterate, but the latter notes that Farmel itself has always maintained positive results. Last year's operating profit was €1,3 million positive. Last year's total result was further impacted by one-off charges related to the sale of Veco. In addition to a one-off depreciation, Veco had a negative operating profit of €4,2 million until its acquisition by Inex.
More turnover, more results
Since the sale, Farmel has fully refocused on its profitable core activities, such as providing services to dairy processors, valorizing the milk of its affiliated dairy farmers, and trading. The company expects a significantly improved operating result this year, with a turnover of approximately €730 million. While this high turnover is largely due to high dairy prices, a better result is still expected.
Aris van Ommeren
Farmel has always performed well for its 'own' dairy farmers, Van Ommeren believes. "In recent years, we've always paid an above-average milk price. Last year, we were in the top three in the Netherlands, I can say that, even though we don't publish a milk price." Farmel has its own milk pool of approximately 400 million kilos, a significant portion of which is in Belgium. It's not just one type of milk. Van Ommeren: "We have PlanetProof, A2, Beter Leven… If a customer asks for it, we can deliver. That's our strength."
Our milk goes everywhere, but we're particularly strong in serving small and medium-sized dairy companies. From a trading perspective, we're particularly strong in the liquid segment. There are plenty of dairy trading companies, but not as many with a specialized focus as we do. We're not so much in the office, but we're always out in the field and know what's going on in the liquid market, so we can deliver. We also have some of our liquid flows processed by contracted parties. We primarily produce butter and milk powder there.