ForFarmers: door open for step outside Europe

According to the ForFarmers management, green and growth do not have to be contradictory. And the search for new markets is not a closed book. "In principle, no country is too far. However, we carefully look around and do not take hasty steps. In contrast to the previously formulated ambitions, entering new growth markets is no longer a goal in itself," respond COO Pieter Wolleswinkel (left) and CFO Roeland Tjebbes on the revised strategy of the listed animal feed group. 

Two years ago, ForFarmers launched a strategy until 2025, but it was canceled due to disappointing performance on hold put. The challenges have been considerable in recent years, says Tjebbes. "We operate in incident-driven markets, from corona to the war in Ukraine with all its consequences. And let's not forget the nitrogen and climate crisis." A greening approach is called for, but there are also opportunities there, says Wolleswinkel. "By using residual flows in animal feed, we can offer a company such as Albert Heijn input in their sustainability agenda. That is why we are emphatically focusing on chain cooperation."

Are we drawing the correct conclusion that the focus is shifting from growth to greening?
Wolleswinkel: "This suggests that green and growth do not go together, but that does not have to be the case. Moreover, we are a company that always has the ambition to grow. We also see real opportunities in greening our activities. The coming For years it will be an art to combine economy and ecology." Tjebbes adds: "With the exception of Poland, animal numbers on the home markets are under pressure. That is a given, but that does not necessarily mean shrinkage. Our British branch will merge with 2Agriculture, a feed company that focuses exclusively on the poultry sector. On balance, we are achieving growth in the United Kingdom. In addition, our British merger partner is well integrated into the chain, in which we can take sustainability steps together."  

I do not immediately read autonomous growth ambitions from the plans. You also let go of the profit forecast. 
Wolleswinkel: "We believe it is possible to maintain sales volumes. Think, for example, of successful poultry feed concepts with ForFarmers De Hoop. However, the markets are challenging. This means that we have to be an interesting party. We help the Dutch farmer ahead with a competitive feed price, combined with good technical results, I am really convinced of that."

Tjebbes: "Margins are under pressure in the current markets, partly due to the volatile raw material prices. The markets will probably remain erratic next year as well. It makes little sense to issue an unreliable profit forecast. Hence our decision to stop doing so. The dividend forecast still stands."

Two years ago you wanted to enter two growth markets outside Europe. Later these plans were shelved. Will the door remain open for a step outside Europe?
Tjebbes: Our merger and acquisition strategy should be seen in a broader perspective and consists of several pillars. First, we continue to look for mergers and acquisitions in the domestic markets. Think of the merger in the UK with 2Agriculture, or as in Poland with Tasomix. We also have two joint ventures in Germany. We do strive for a majority interest. The advantage of joint ventures is that you become deeply rooted in the local markets, something to which we are devoting even more attention in the updated strategy. In addition, we continue to look for a sixth country, possibly outside Europe. In principle, no country is too far. We strive for a leading position in a country, but in a large country that can also be regional. So we would also like to take another step in Poland, where we are not yet a top-3 player."

Wolleswinkel: "Contrary to the plans two years ago, entering new markets is no longer a goal in itself. We only take this step when the opportunity arises. What is important here is a 'cultural fit', as we say. a company must also fit with us in terms of mindset."

Your last major acquisition dates back to 2020 when poultry feed producer De Hoop was incorporated. Is a takeover easier said than done?
Tjebbes: "In general, the movements in terms of mergers and acquisitions in the feed sector have calmed down in recent years. Perhaps this has to do with unrest in the markets, which has put some pressure on the profitability of feed companies. As a result, valuations have often also lower. This may make parties reluctant, for an acquisition you simply need two parties. As far as we are concerned, it is especially important that we can make the right match for the right acquisition price. Carefulness is more important than speed."

Internally you will set up a new organization in which Reudink (organic) and ForFarmers DML (co-products) come together. Why this step?
Wolles shop: "The aim of this is to highlight the strengths of both organizations. Reudink in organic and ForFarmers DML with the sale of co-products. We thus anticipate the wishes of our stakeholders who want to shape their sustainability agenda. Retailers such as Albert Heijn, for example, are working on reducing the CO2 footprint and the deforestation issue. The use of residual flows can help with this. We will announce the plans in the near future. However, the name Reudink will continue to exist."

Finally, in January your new CEO will take office in the person of Theo Spierings. To what extent can he still tinker with the plans?
Wolleswinkel: "In the run-up to his appointment, there were various discussions between the Supervisory Board, Spierings and the Management Board. The plans were presented and he became enthusiastic about this. The intention is to implement the strategy together soon."

Tjebbes: I look forward to working with Theo, who I know from my time at A-ware. There we worked together with Fonterra where he was CEO at the time. We even once went out together to recruit farmers for A-ware, of which he is an advisor. Everyone within ForFarmers is very pleased with his arrival."

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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