Interview Ronald Van de Ven
Feed group South sees opportunities with new strategy
Voergroep Zuid is celebrating its 125th anniversary this week. A great milestone for the oldest feed cooperative in the Netherlands. The company is doing well. Rightly so. Being active in the feed sector for such a long time is not nothing. At the same time, the challenges for the future are great for the feed cooperative, which derives a large part of its turnover from Brabant and Limburg. It is precisely there that the animal numbers are highly debated. With a new strategy, Voergroep Zuid believes it can respond to this.
"The trick is to be agile in this challenging feed market. If the opportunities arise, collaboration or takeovers are certainly an option, but we do not want to become a new top-3 player," says Ronald van de Ven (61) who now has more than a year as CEO.
The 125th anniversary is a great milestone. What does this mean for you?
"We are in the middle of the festive week. You notice that the anniversary has a lot to do with our customers and organization. Our long history is proof that many things are going well. The predecessors of the current cooperative once started to bundle purchasing activities properly and efficiently. That idea is still alive, but in the spirit of today. This means that our customers are closely involved, but also not infinitely loyal. The first priority is always that our performance must be right. I am talking about a competitive price/quality ratio in combination with good results in the barn. This keeps us sharp. We are as a cooperative of the farmers and for the farmers. We want to continue that, which is why we also strongly focus on potential successors with our new youth program. Saturday evening we celebrate together with these young people are having a party during 'Het Bokkenbal', where we expect 1.500 young farmers and ranchers. That is a great start to get to know them better and working together for years to come."
You have been CEO for over a year now, how do you like this?
"Very good. The ambitions of the Voergroep fit perfectly with my experience and my current stage of life. I still have a lot of energy and ambition to make this cooperative even more successful with the team in the changes in the market. One day I will be at Hendrix/ Nutreco started and now back in the south of the Netherlands, where I also live. Voergroep Zuid is an ambitious club. It is great to be able to lead it. It is a no-nonsense company where farmers' interests are really central. appeals to me."
You used to be on the board of directors at Agrifirm and ForFarmers, the big boys, so to speak. What makes Voergroep Zuid different?
"First and foremost, every business model has its advantages, disadvantages and opportunities. The companies I worked for are larger and have international ambitions. That is challenging, but it also creates a more complex organizational structure. This makes change processes more complicated. At Voergroep Zuid I can steer very directly and the organization is able to tackle matters much faster due to its size. That works well, especially in today's rapidly changing market."
Tell us more about your new strategy, for example how do you think you will deal with the shrinking livestock in our country?
“Livestock shrinkage is a given. In our strategy we have assumed that the market will shrink by approximately 15% in the coming years. Of course, in practice this can also be 10% or 20%, but you have to start from something. To absorb this contraction, we need to grow in market shares. If we continue the growth of recent years, then we can also keep our factories full in the shrinking market. That is important for our cost price. This way we can continue to produce efficiently. In addition, acquisitions in the Netherlands or the north of Belgium can help to absorb the contraction of the market in the Netherlands. When opportunities arise, we certainly do not neglect them. I also see opportunities for forms of cooperation with other feed companies, without this being a direct merger. And not only in the field of feed production, but also, for example, in ICT or innovation.
Ronald van de Ven
"Voergroep Zuid wants to grow, but really doesn't have to become a new top-3 player. Being large also has disadvantages, tall trees catch a lot of wind. If you look at the current market, you can see that the medium-sized feed cooperatives are doing well at the moment. Apparently this size appeals to farmers. In our case, the management has direct contact with the major customers and we would like to guarantee that, also in the future."
"Another pillar in our new strategy is the development of circular feed activities. We will announce the first concrete steps on this later this year. We believe that this makes it an interesting partner for livestock farmers who participate in certain marketing concepts. This ties in well with the current We also want to further strengthen our non-feed activities in the coming years, such as our retail activities (8 Welkoop stores and a Praxis). Those stores are doing well. With the merger of Zuiderhuis and Rivez we have strengthened our activity in financial services, so that we can use the money we earn from this for acquisitions in the compound feed sector, for example.
Speaking of making money, the first years after the merger in 2015 (when Boerenbond Deurne, Isidorus Nederpeel and the Boerenbond Helden merged into Voergroep Zuid) were unsuccessful. There were also difficulties in management. How are you running now?
"As with many mergers, shortly after a merger you have to deal with cultural differences and many internal processes. It takes time for things to melt together and to create a new unity. My predecessor Wim Maaskant guided this process well and provided a solid foundation has been laid. With my arrival, we have entered the next phase and we are going to shape our new strategy. We are financially sound with an operating result of € 1,8 million in 2021."
Will dividends still flow back to members?
"No, we don't. We give the advantage to our customers up front by means of a competitive feed price. This also limits our profits. We are working on a loyalty scheme, which rewards loyal members extra. How we go about this exactly will be announced later this year."
Finally, feed prices are skyrocketing this year. What are your expectations?
"The raw materials market is complex and prices are high. However, the peak seems to have been reached. In the past two weeks, we were one of the first to lower feed prices by €1,40 to €1,60 per 100 kilos. I expect this decrease will continue in the coming weeks. It is still difficult to estimate for the fourth quarter. That market has not yet been established. Much will depend on the war in Ukraine and the grain harvests worldwide. Hopefully there will be a further decline in raw material prices "This is urgently needed because not all sectors increase the prices for the farmer's products. Our concern is mainly in pig and goat farming, where the selling prices for farmers lag far behind to make up for all the increased costs."
Wouter Job
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