From ‘Build to Grow’ to ‘Face the Future’. Feed producer ForFarmers proves that a lot can change in two years’ time. In 2020, then CEO Yoram Knoop showed the ambition to also grow outside Europe, possibly even towards Asia. On Thursday, the company took a step back, just like Knoop earlier this year. ForFarmers mainly wants to grow in the markets where it is already active. It also wants to reduce its own emissions through more sustainable animal feed production, as well as the amount of waste.

    ForFarmers has no choice: the listed company has been dealing with financial setbacks for some time. Earlier this month, the animal feed producer announced that gross profit (Ebitda) in the third quarter was 17 percent lower than a year earlier. One of the main causes is the rising price of energy and raw materials. ForFarmers imports wheat, sunflower seeds and corn from Ukraine, among other things. Before the war broke out in that country, raw material prices were already rising sharply, but since then, according to the company, they have shot through the roof. The same applies to fuel prices, which have already risen, but have risen much faster since Russia turned off the gas tap.

    Closed food chains

    Pressure is also increasing from politicians: companies must do more to make their own production processes more sustainable. The European GreenDeal stipulates, among other things, that food chains must be ‘closed’ as much as possible by 2030, i.e. without waste and with as much reuse of materials and raw materials as possible. ForFarmers therefore wants to use more residual flows as food. “For example, we already use the leaves of corn cobs. They don’t digest humans, but animals do. We want to apply those kinds of solutions more often,” says a spokesperson. The company is also looking at alternative raw materials and organic animal feed. It should also make ForFarmers less dependent on more expensive foreign raw materials.

    One of the three largest animal feed producers

    With a turnover of 2.7 billion euros in 2021, ForFarmers is one of the three largest animal feed producers in the Netherlands, alongside De Heus and Agrifirm. It was one of the sponsors of a large farmers’ protest in June this year against the government’s plans to reduce nitrogen emissions. For the new strategy, the company says that it has taken into account a reduction in the herd, without attaching concrete numbers to this in terms of loss of income. “It is not yet clear what the final percentages with which the livestock will develop.”

    Part of the new strategy is also that the company places more responsibility with local management teams. The company hopes to get closer to the farmers in this way. As far as foreign markets are concerned, ForFarmers will mainly focus on Belgium, Germany, Poland and the United Kingdom. Where possible, the company wants to strengthen its market position there through acquisitions or mergers. It also hopes to offer more complete food packages to customers through cooperation, so that they do not switch to competitors.

    A previously expressed wish to also become active in other countries has been partly abandoned. Compared to the 2020 strategy presentation, we have abandoned the intention that we should have entered two new markets by 2025. Also, a figure is no longer attached to the desired size of growth.

    Also read this piece: ForFarmers can only grow outside Europe (2021)

    Not known in exchange rate

    ForFarmers also announced on Thursday that it was releasing profit targets for the coming years. The volatility of the markets means that the animal feed producer has become more cautious. Recently it appeared that the company did not meet certain targets, which led to a disappointed reaction from investors. Since March 2021, the share has lost almost 60 percent of its value and is now hovering around a price of 2.60 euros. The company will therefore no longer make predictions about gross profit. “We will not achieve the gross profit presented in 2020, so it is irresponsible to leave it,” says an information officer.

    The new strategy was presented on Thursday, even before the appointment of new CEO Theo Spierings. According to a spokesman for ForFarmers, he is not known in the change of course drawn up by the other board members. His appointment is subject to shareholder approval in January. Spierings is the third chairman of the board in barely a year and a half. The previous CEO, Chris Deen, retired earlier this year after three months due to illness. Spierings – who comes from the New Zealand dairy company Fonterra – will stay on for a year, he has agreed with the supervisory board.