Everything shows that ForFarmers - in addition to being the largest compound feed manufacturer in Europe - also wants to become the market leader in terms of sustainability. Organic and by-products must become the answer to compound feed sales, which again fell sharply in 2022. With Theo Spierings on board as the new captain, the listed animal feed giant wants to take a different direction, as COO Pieter Wolleswinkel (left) and CFO Roeland Tjebbes also confirmed in the explanation of the annual figures published today.
The wild adventures of former CEO Yoram Knoop have been exchanged for a more realistic policy, in which not growth but greenery plays a prominent role. This is the slogan in the strategy that was adjusted last year build to grow was exchanged for going circular. Forcing entry into new markets outside Europe is no longer a goal in itself. In any case, ForFarmers appears to be looking at acquisitions more carefully. Looking back on recent years, not all acquisitions were equally successful. The last major takeover was De Hoop Mengvoeders and the announcement of that deal was already two years ago.
Volumes under pressure
From a commercial perspective, ForFarmers' performance has deteriorated significantly in recent years. As the market leader, they are most susceptible to the decline in animal numbers. Lochem increasingly seems to be realizing that maintaining sales volumes is almost impossible. Feed sales have now fallen from more than 10 million tons to 9 million tons, a decline of more than 10%. And that is probably not the end of the matter, because the largest reduction in livestock numbers is probably yet to come in the Dutch home market.
Pieter Wolleswinkel (COO ForFarmers)
However, there is no question of understaffing in the factories, according to COO Pieter Wolleswinkel. "Due to a recent factory closure in the Netherlands, production capacity and sales will be in balance in the coming years," he said when asked at the press conference explaining the annual figures. Wolleswinkel also announces that ForFarmers is abandoning the Total Feed approach. In markets such as Germany and Belgium, this makes it possible to separate advice from feed purchase. This option is not available in the Netherlands or Poland.
The explanation also shows that ForFarmers also had a difficult year in organic, as mentioned by CFO Roeland Tjebbes. The organic subsidiary Reudink saw sales decline, although the tonnages are not specified. "Due to high inflation, the organic sector is experiencing a drop in demand on the store shelf, which also affects feed sales," says Tjebbes. For the future, however, ForFarmers remains positive about the sales of organic feed, partly due to the stimulating government measures. Wolleswinkel mentions that he wants to strengthen the position in organic in Europe, he seems to hint at acquisitions in this segment.
Becoming a leader in sustainability
ForFarmers is also fully committed to by-products, for which the organization is adapted internally. The management is proud to report that sales of by-products increased last year. This explains why total feed sales are declining less rapidly than sales of compound feed. According to Tjebbes, this is a favorable development in several respects. Both for the margin and for the sustainability performance with regard to the origin of raw materials.
Also with the appointment of former Fonterra CEO Theo Spierings, who is responsible for sustainability a personal mission made, ForFarmers seems to want to accelerate on this theme. Although Spierings had to skip the press conference due to personal circumstances, he emphasizes in the press release the need to become more sustainable. His ambition is that ForFarmers will play a leading role in this.