ACTIVITY REPORT
2015
New ambitions
to build the future
Avr
il G
roup
Act
ivit
y re
port
20
15
AVRIL — RAPPORT ANNUEL 2015
2
CONTENTS
2 A Group structured along
sectoral lines4
Portrait of the Avril Group6
Joint interview with Xavier Beulin and Jean-Philippe Puig
8 Corporate governance
12 Financial performance
13 Key figures
14 2015 at a glance
1 2 3ACTIVITIES
58 Financial information
INTRODUCTION STRATEGY
18 Avril’s challenges
for tomorrow’s world20
A new strategic ambition22
A customer-focused Group that is strong and competitive
in its markets24
A resolutely international group based on the conquest
of new markets26
Innovation to drive the creation of sustainable value
28 People to serve the ambitions
of Avril 2020
32 Sofiprotéol,
finance and development company 36
Oilseeds Processing40
Oils & Condiments44
Oleochemicals46
Animal Nutrition49
Biosecurity & Nutritional Specialties
52 Animal Processing
56 Avril Development
“Rapeseed fields in the Brocéliande forest”, Nicolas Brugvin (Copeol), 2015 photo competition.
PROFIL
11Creating sustainable value in the oils and proteins sectors, thus contributing to better food for humans and preservation of the planet.
OUR MISSION
AVRIL — ACTIVITY REPORT 2015
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AVRIL — ACTIVITY REPORT 2015
A Group structured along sectoral lines,
from grain to finished products
Seeds, plant health products, biotechnology; other inputs
and services
Proteochem®
100,000 agricultural producers
Collection of oilseed and protein grains
Crushing
Proteins
Oils
PROFIL
3
Involvement of Avril (industrial and/or finance activities)
Involvement of Sofiprotéol, finance and development company
Animal nutrition, Biosecurity
Eggs, pork
Genetics and Animal health, other inputs
and services
Livestock farmers
Milk, meat
Poultry
Renewable energies
Renewable chemistry
Food
Avril, the industrial and financial actor
of the oils and proteins sectors
Avril is leader in:• the crushing of oilseed grain in France,
and one of the leaders in Europe,• the production of table oils in France,
Morocco and Romania,• the production of biodiesel from oilseeds in Europe,
• animal nutrition in France,• the egg market in France,• oleochemistry in Europe,
• vegetable glycerine production in the world.
Set up in 1983 at the initiative of French farmers to offer sustainable markets for the oils and proteins sectors,
Avril is present in areas as diverse as human foods, animal nutrition, and renewable energies and chemicals.
AVRIL — ACTIVITY REPORT 2015
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€ 6.1 bn turnover
7,200employees
21countries
Strong territorial roots in France
15 sites in oilseed sectors 44 sites in animal sectors
REUNION ISLAND
Industrial sites Commercial offices
Global breakdown of employees in 2015
One third of turnover achieved internationally in 2015
64%14%
7%
6% 6%3%
France Morocco Romania Belgium Europe Other
5
PORTRAIT OF THE AVRIL GROUP
AVRIL — ACTIVITY REPORT 2015
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2015 WAS THE YEAR OF AVRIL’S LAUNCH. WHAT IS YOUR ASSESSMENT,
A YEAR LATER?
Xavier Beulin: I have been surprised by the speed at which we adopted our new name. We felt that people within the Group had a desire for change, and were looking for a common iden-tity. As for the Group’s governance and management, we found our feet very rapidly. The external personalities who joined the Board have offered comple-mentary views that have been unbiased and of high quality, notably regarding our new strategic plan, Avril 2020. Jean-Philippe Puig: Our partners in agriculture were closely involved in the discussions, offering excellent advice and contributing valuable points to our long-term strategy. It was necessary to decide together on our core skills and principal orientations. This plan was remarkably well received by our partner farmers and constitutes a truly joint project. It is a major change for Avril and a new challenge: to operate in a more collegial manner.
WHAT WERE THE PRINCIPAL FEATURES OF THIS YEAR?
X. B.: First of all, an unprecedented economic context: the price collapses that affected petroleum and agricul-tural raw materials, and a crisis in the livestock industry which proved to be a major structural issue for France, which suffered from a lack of compet-itiveness with its European neighbors. J.-P. P.: I would add the pressure we
Pursuing investments to better prepare
the future2015 was the year when Avril was born and
constructed. Despite a particularly difficult context, the Group resisted well and determined its new
strategic ambitions. A shared perspective from Xavier Beulin, Chairman of Avril Gestion
and Jean-Philippe Puig, CEO of Avril.
Xavier Beulin
7
JOINT INTERVIEW WITH XAVIER BEULIN AND JEAN-PHILIPPE PUIG
felt from major retailers on prices. We are living in a paradox: it is difficult to combine production that meets high standards in terms of quality and trace-ability with systematic alignment to the lowest bidder. The combination of all these factors affected several of our activities. But despite this particularly unfavorable context, there were some reasons for satisfaction: our perfor-mance was less good than in 2014, but thanks to all our efforts over recent years to reduce costs and integrate our activities, we were able to withstand the shock. We have rarely invested so much: in our industrial facilities, in our sectors and via Sofiprotéol. We are preparing for the future.
HOW HAS AVRIL RESPONDED TO THE CRISIS IN FRENCH FARMING?
J.-P. P.: A few examples: in the egg branch, we are rebuilding the sector by finding new markets. For the first time, we exported 60 million eggs to the US and Mexico. Thanks to the partnership we have just signed with the German firm Tönnies, we are developing 100% French pork products for supermarkets which previously only sold imported meat, and we are creating jobs in this area. A third example is the creation with Fleury Michon of a sector of excellence in pork, where our partner has under-taken to ensure equitable remuneration throughout the chain, which will have positive effects on livestock farmers. In this way, we are managing to create real value within our sectors, in line with our stated mission.
It is because we have a strong and profitable
model that we can develop internationally.
We need to find new markets outside France.
2015 ALSO SAW THE BIRTH OF YOUR NEW STRATEGIC PLAN. WHAT DO YOU HOPE IT
WILL ACHIEVE?
X. B.: This is the first time that we have stated in a strategic plan that our focus is on international growth, other than by opportunity. In the longer term, we are also aiming to find a balance between the exploitation of vegetable oils and proteins, which means that we shall have to adopt new orientations. The planet’s deficit in vegetable proteins, which will occur within the next fif-teen years, is an issue that has not been wholly grasped. Protein will become a crucial topic, and it is central to the Avril 2020 plan.J.-P. P.: The guidelines are simple. First of all, we must strengthen relations with our customers in all areas, so as to bet-ter exploit the advantages of our sec-toral organization and our know-how, and take better account of their needs. In the commodities markets, our prices must be the best. We need to continue developing our specialties thanks to innovation, with particular focus on proteins. Finally, we must accelerate our international efforts, and our pri-ority target is clearly Africa. Indeed, we have a duty to develop our model there, because we feel that it would help the continent’s population, which will reach around 1.2 billion within the next twenty years. We need to find the resources to achieve all this.
Jean-Philippe Puig
THE FOURTH STRATEGIC AREA OF AVRIL 2020 FOCUSES ON PEOPLE…
X. B.: The human dimension of our pro-ject is fundamental. I am aware of the efforts we are demanding and proud of the mobilization of our teams. Many ini-tiatives have been taken to cultivate the Group dimension acquired with Avril, and this is strengthening in line with our international growth. We need to give a sense to our work, explain our strategy and sustain a spirit of conquest, particu-larly during difficult times.
AVRIL — ACTIVITY REPORT 2015
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Original governance for a unique model
Original governanceWhen it was created in early 2015, Avril took on a new governance structure and the status of a limited partnership with share capital (Société en Commandite par Actions, SCA). This structure can separate the power of shareholders (limited partners [associés commanditaires], that include the FIDOP 1 and FOP 2 as well as the Fondation Avril, recognized as a public utility), from that of the manager
7 BUSINESS LINES
ANIMAL NUTRITION
BIOSECURITY & NUTRITIONAL
SPECIALTIES
ANIMAL PROCESSING
OLEOCHEMICALSAVRIL
DEVELOPMENT
TERRES UNIVIA FIDOP FOP
The Avril group’s governance corresponds to its ambitions while perpetuating one of its founding principles: the systematic
reinvestment of its profits to the benefits of its sectors.—
JEAN-PHILIPPE PUIGCEO of Avril
OILSEEDS PROCESSING
OILS & CONDIMENTS
9
GOVERNANCE
The Board
Xavier BEULINChairman
Bernard DE VERNEUILMember of the Board and Administrator of the FOP
Pierre PRINGUETVice-Chairman of the Board, Pernod Ricard
Arnaud ROUSSEAUVice-Chairman of the FOP
Jean-Pierre DENISChairman of Crédit Mutuel Arkéa and Crédit Mutuel de Bretagne
Sylvie RUCARConsultant
Gérard TUBÉRYChairman of the FOP
Anne LAUVERGEONCEO of Alp Services and Chair of SIGFOX
Alain MIROTPreviously Manager of SIA 4
(Avril Gestion, the general partner [associé commandité]). This helps to ensure that the founder shareholders in the Group remain central to its growth strategy. The partners work through a Supervisory Board with eight members who include two staff representatives from the Avril Group, elected by their peers. The Supervisory Board is chaired by Jacques Siret, who is also Chairman of Terres Univia 3. The general partner, Avril Gestion,
appoints the manager of the SCA and decides upon the major strategic and financial orientations of the Avril Group. Its Board comprises nine members: four from the FOP, three qualified personalities and two previous CEOs or corporate officers of the Group.
A more flexible organization In 2015, discussion groups looked at how to adapt the managerial organization to the new challenges
faced by the Group. Avril now has a more agile, resilient and efficient organization, structured around Sofiprotéol, its finance and development company, and seven business lines (see diagram opposite). 1 FIDOP: Interprofessional Development Fund for the Oilseeds and Proteins Sector2 FOP: French Federation of Oilseed and Protein Crop Producers3 Terres Univia: Interprofessional organization for oilseeds and protein crops.4 SIA: Support and Development Compagny for the Oilseed Sector
AVRIL — ACTIVITY REPORT 2015
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Deputy CEO, in charge of Sofiprotéol minority
stakeholdings, Sustainability, Innovation, M&A, and the Strategy
Deputy CEO, oversees the Oilseeds Processing, Oils & Condiments
and Oleochemicals Business Lines
Deputy CEO, oversees the Animal Nutrition, Biosecurity & Nutritional Specialties, Animal Processing and Avril Development Business Lines
An extended Executive Committee
In order to optimize the scope of its new strategic plan Avril 2020 and to support changes to the Group’s
managerial organization, the Executive Committee has been extended to include the principal activities
of the Group and the Innovation Division.
Michel BOUCLY
Jean-Philippe PUIG
Yves DELAINE Éric PHILIPPE
CEO of Avril
11
Industrial and International Development Vice-President
(VPID), in charge of Operational excellence, Safety, Quality,
Environment and Supply chain
General Manager of the Animal Nutrition Business Line
Human Resources Vice-President (VPHR), in charge of Health,
Security and Well-being at work, oversees Communications
General Manager of the Oleochemicals Business Line
Chief financial officer (CFO), oversees Legal affairs
and Information systems
General Manager of the Animal Processing Business Line
GOVERNANCE
Innovation Vice-President (VPI)
Jean-François ROUS
Gabriel KRAPF Philippe LAMBLIN Aymeric MONGEAUD
Bernard MAHÉ Moussa NACIRI Yann RENOUVEL
General Secretary in charge of public and institutional affairs
Stéphane YRLÈS
General Manager of the Oilseeds Processing Business Line
Jean-Baptiste BACHELERIE
AVRIL — ACTIVITY REPORT 2015
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Deciphering the year
As the first year of operation of the Avril Group, 2015 was a year for construction and investment in
the modernization of our tools and processes. 2016 will be the year when our transformation will accelerate,
around the orientations of the Avril 2020 strategic plan.
AYMERIC MONGEAUD,Chief Financial Officer of the Avril Group
Deputy CEO of Sofiprotéol
products. Crushing margins also shrank under the effect of smaller rapeseed and sunflower harvests in 2015 and a competitive environment exacerbated by abundant soybean supplies. Despite these adverse conditions, the Group held its own and achieved an EBITDA that reached €206 million. The finance company achieved excel-lent performances in its two areas of investment and financial management in an uncertain market environment, by driving a dynamic of rotating its portfo-lio while reinforcing its commitments throughout the sector.
HOW DO YOU EXPLAIN THESE RESULTS?
They are linked to the significant efforts and gains in productivity achieved in the context of the Group’s operational excellence program, initiated in 2013. They also confirm the pertinence of our strategic choices, based on a busi-ness model that has gradually evolved towards more specialties as a catalyst for innovation and value creation. This reorientation was reflected in three areas: the increasing importance of spe-cialty products with global markets in the fields of oleochemicals, biosecurity and animal nutritional specialties; the consol-idation and refocusing of our positions, with the sale of high-risk activities where we are not involved in the sector (such as biodiesel in Italy), and the conclusion of strategic alliances to conquer or recon-quer market shares in environments that are experiencing difficulties, such as the partnership signed with LDC in animal nutrition.
WHAT ARE YOU EXPECTING IN 2016?
Our debt level has remained low when compared with the size of the Group. This financial solidity will allow us to maintain an ambitious level of invest-ment, which is essential if we are to con-solidate our sectoral model and ensure the competitiveness of our industrial assets. In this respect, 2015 saw the launch of a major project to modernize our infrastructures, processes and infor-mation systems, designed to underpin the construction of the Avril Group initi-ated in 2014. In 2016, we shall be accel-erating our transformation while holding the same course. We shall be pursuing our efforts to achieve operational excel-lence and implement the orientations of our strategic plan, Avril 2020, based on the development of new markets for our sectors and the conquest of new geo-graphical regions. The current context requires caution, but more than ever we are confident in the future.
WHAT IS YOUR ANALYSIS OF THE AVRIL’S OVERALL PERFORMANCE?
The Group had to deal with a combina-tion of factors that affected almost all its areas of activity. The weakness of raw material prices, compounded by marked volatility, squeezed its margins and penalized biodiesel in particular. Nego-tiations with major retailers in a context of increasingly concentrated purchasing units meant it was not possible to pass on any price rises. Livestock sectors experienced a very difficult situation that combined an unprecedented crisis with an unfavorable global geopolitical con-text, which resulted in a marked reduc-tion in the competitiveness of French
Key figures
13
€13.5 mGroup net consolidated
pro forma income
€1,826mequity
€6.1 bnturnover
€206mEBITDA
€186 minvested in 2015,
including:
€ 50 mof industrial investments
in animal sectors
€ 37 mof investments by Sofiprotéol, the finance
and development company
€ 22 mof investments devoted
to the Group’s information systems
€ 77 mof industrial investments
in oilseeds sectors
7,200employees
21countries
82industrial sites throughout
the world, of which: 29 in oilseeds sectors 53 in animal sectors
AVRIL — ACTIVITY REPORT 2015
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Avril and LDC finalize their planned alliance
2015 was the year of implementation of an alliance signed in the autumn
of 2014, designed to foster the development of an efficient French
poultry sector with international ambitions. This took practical form
in February 2015 with the sale to LDC of Avril’s poultry slaughtering
and processed products activities. Illustrating the active role played by Avril in consolidating sectors
at the service of the French Farm, this alliance should also strengthen Sanders’ position as the leader in
animal nutrition in France, and that of LDC as a major actor in
the European poultry sector.
Sofiprotéol supports Terrena in its takeover
of Doux
The cooperative group Terrena, supported by Sofiprotéol as a minority
shareholder, entered exclusive negotiations with a view to purchasing
the Doux Group, the third largest company in the French poultry sector (with brands such as Père Dodu and
Doux). This acquisition, finalized in March 2016, will result in one
of the five largest poultry companies in Europe. Through this commitment, Sofiprotéol has confirmed its growing
involvement in structuring different agricultural sectors.
FEBRUARY
MAY
2015 at a glance
This selection of highlights illustrates the permanent foundations of Avril’s model: to build strong alliances to consolidate French sectors, search for new markets,
focus on quality to differentiate products and create value and jobs throughout the value chain.
Denis LAMBERT, Chairman of Groupe LDC, and Jean-Philippe PUIG, CEO of Avril
15
A sector of excellence for French porks
Set up jointly by Avril (Abera and Sanders) upstream and Fleury Michon
with respect to processing and marketing, this new sector proposes
a range of charcuterie products made from pigs receiving non-GMO feeds
and no antibiotics*. At its launch, 21 of Sanders’ partner livestock farmers
were involved in the operation. They have to comply with a very
detailed specification, defined in the context of Sanders’ “Committed
to livestock” sectors of excellence. These requirements concern
the environment, animal welfare and the nutritional quality of products.
*Pigs fed with non-GMO French cereals that receive no antibiotics after 42 days of age.
Two acquisitions to accelerate international
development
Lesieur became majority shareholder in SPHB, the leader in the Reunion Island table oils
market and a major player in the sauces, condiments and ketchup markets. This operation will allow Avril’s subsidiary to develop the presence of its products in East
African and Indian Ocean markets. In addition, the Group announced its acquisition of the British firm The Kerfoot Group, specialized
in the packaging and distribution of oils for the food and cosmetics
industries, as well as in out-of-home dining. This takeover opens new
markets for the vegetable oils produced by Saipol.
JULY - AUGUST
New Lesieur plant in Bassens
On 15 January 2016, Avril opened in the presence of the French
Prime Minister Manuel Valls a new Lesieur plant for the bottling
and packaging of vegetable oils in Bassens, near Bordeaux,
thus marking the birth of the largest subsidiary site in the
Group. This event provided an opportunity for Avril to declare
its commitment to French government policies on access to employment in agri-food sectors.
JANUARY 2016
Avril associates with Tönnies to create a 100%
French pork sector
Two major actors in the European pig sector, the Avril Group and
the German firm Tönnies initiated exclusive negotiations to create
a company to manufacture products made using 100%
French pork, to be sold as fresh foods by supermarkets. Called
“l’Alliance des Viandes de France” (AVF), this joint enterprise, which has been operational since April 2016, is based in Vire (Calvados, Normandy) and should enable
the creation of 60 jobs.
SEPTEMBER
OCTOBER
2015 AT A GLANCE
AVRIL — ACTIVITY REPORT 2015
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S T R
A T
E G Y
ON THE WAY TO AVRIL 2020
PROFIL
17
S T R
A T
E G Y
4 Strategic Areas:
AREA #1
A customer-focused Group that is strong and competitive in its markets
AREA #2
A resolutely international group based on the conquest of new markets
AREA #3
Innovation to drive the creation of sustainable value
AREA #4
People to serve the ambitions of Avril 2020
Avril 2020 is the new strategic plan developed in 2015 by all entities in the Group with the active participation of farmers from the FOP.
It can be broken down into 4 areas.
AVRIL — ACTIVITY REPORT 2015
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Avril’s challenges for tomorrow’s world
To contribute to better foods for humans and preservation of the planet. Avril’s vision
of the future is contained in its mission statement. The Group has identified three key challenges for the future to which it will provide solutions
through its original sectoral model.
Between now and 2030*, the supply of vegetable oils will
exceed demand and thus satisfy the world’s needs with respect to food and renewable energies and
chemicals. On the other hand, under the combined effects of
global demographic growth and increasing demand for products of animal origin, meeting needs in terms of vegetable proteins will be more difficult. One of Avril’s principal challenges is to respond to this situation.
Working to exploit protein from oilseed grain and continuing
to invest in ensuring the efficiency and productivity
of our sectors are two of the Group’s levers for action.
MEETING THE NEED FOR VEGETABLE
PROTEINS
Food production and transport are important sources of
greenhouse gas emissions. Through its close involvement in
agriculture, and as a pioneer in biofuels, Avril aims to play a leading role in solving the food-climate equation and favoring energy transition.
Under its sectoral model, these two challenges are closely
intertwined: oil surpluses* can contribute to the development
of renewable energies and chemicals, while at the same time
responding through their by-products to the key challenge of vegetable proteins in the foods
of tomorrow. Avril works in synergy with all its partners
in these sectors in order to improve cultivation, livestock management and industrial practices, and thus assure
a long-term role for a virtuous model that will continue to
provide solutions for the future.
ACTING FOR THE CLIMATE AND
ENVIRONMENT Offering access to good quality foods for the greatest number is a fundamental challenge for
agriculture. Consumers are increasingly attentive to the
traceability of products, their origins and the conditions under
which livestock were reared. Based on the principle that
to provide a good diet for humans it is necessary to feed animals properly and take care of their
health, Avril draws strength from its know-how in different livestock
sectors to respond to these concerns. This is the focus of the
Group’s efforts to structure French sectors of excellence that will offer
consumers guarantees with respect to the quality and origin
of products.
SERVING CONSUMER
EXPECTATIONS
* BIPE-Avril foresight study 2014
ON THE WAY TO AVRIL 2020
Demand and supply of vegetable oils and oilseed meals
Vegetable oils (millions of tonnes)
300
250
200
150
100
50
2000 2010 2030
-1 Mt -1%
+3 Mt +2%
+8 Mt +3%
500
400
300
200
100
2000 2010 2030
-5 Mt -3%
+6 Mt +2%
-58 Mt -15%
Oilseed meals (millions of tonnes)
Feeding 8.4 billion people in 2030
2030
43% increase in global demand for vegetable proteins between
now and 2030, driven by Sub-Saharan Africa and India
+43%
2010
Source : BIPE, based on FAO data Source : BIPE, based on FAO data
Demand Supply
2010
2030
Africa: +54% population growth between now and 2030, to reach
23% of the world’s population19
AVRIL — ACTIVITY REPORT 2015
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A new strategic ambition
In 2015, changes to Avril’s vision of the future resulted in an adaptation of its strategic plan.
Called “Avril 2020”, the new plan focuses on two important challenges to be met so that the Group
can better prepare and gear up for the future of the sector: proteins and Africa.
MAJOR ADVANCES SINCE 2013
The new strategic plan is the result of forecasts at a 5-year horizon made by all the Group’s areas of activity and by Sofiprotéol, its finance and development company. Representatives from the farming world participated actively in compiling this plan, thus reaffirming the crucial role of producers in the sector, whose initiative created the Group in 1983. While forming part of a long term vision of the challenges faced by our planet, Avril 2020 is also in continuity of the previous plan, CAP 2018, which has enabled major advances since its launch in 2013: improved operational efficiency, illustrated by progress in safety at work (the accident rate has fallen by 57% in three years) and productivity; a success-ful shift toward specialty products targeting global markets in both Oleo-chemicals and animal sectors, with the birth of the Biosecurity & Nutritional Specialties business line; and finally the consolidation of French livestock sectors where Avril, through its subsidiary Sofiprotéol, has played a structural role through its strategic alliances.
GEARING UP THROUGH PROTEINS AND GROWTH IN AFRICA
Avril 2020 forms part of a prospective dynamic that should enable the Group to conquer new markets at a global scale. The Group aims to play a leading role in meeting the planet’s needs for protein by exploiting the protein fraction of grains, as it has already done in the field of vegetable oils. Its second challenge is
geographical: to respond to major growth in food demand from Africa by accelerating its development through the structuring of efficient and sustain-able sectors, focused on local food production.
REAFFIRMING THE AVRIL MODEL
This new plan also takes account of the increasingly volatile markets where Avril operates and the competitiveness chal-lenges faced by French sectors, notably concerning livestock. It is therefore nec-essary to accelerate what has already been initiated, by increasing efforts towards productivity, seeking interna-tional growth, and continuing to develop activities and products with a high added value that are driven by innovation. Avril is a Group like no other. During this period of challenges and change, its unique model equips it with major strengths. Its commitment to sustaina-bility is central to its mission and the reinvestment of all its profits in the devel-opment of different sectors is a powerful distinguishing feature of its work. The Group’s governance offers it the ability to drive a long-term strategy built on prospective analysis. And finally, its organization allows it to play a deter-minant role in the structuring of sectors, both upstream and downstream, to boost their activities and promote agriculture that can respond to both markets and consumer expectations.
In a highly adverse environment, we have been
able to project our plans at a 5-year horizon, in order to serve our mission. We are confident and determined.
We know the areas that need to be addressed if we are
to succeed.
MICHEL BOUCLY Deputy CEO, in charge of Sofiprotéol minority
stakeholdings, Sustainability, Innovation, M&A, and Strategy
ON THE WAY TO AVRIL 2020
The view from upstream agricultureThrough a dedicated focus group, our producers were closely involved in the debate on Avril 2020. Our discussions concerned both strategic orientations and defining financial objectives for each area. One particular concern was to find a constant balance between the need for profit and the proximity between different activities and farmers. We also participated in choosing Sofiprotéol’s investment priorities so as to ensure that the challenges of agricultural competitiveness will be taken into account. I can indeed say
that this strategic plan is full of views and ideas from the farming world; this includes its international dimension that will reinforce the Group’s future and allow it to pursue its investment policies. Avril has a role as a structuring actor and a creator of competitiveness for agriculture in France and elsewhere. It is one of the solutions to the crisis we are currently experiencing. By showing that our products contribute to meeting global challenges, Avril gives a sense of purpose and pride to farmers.
Sustainable development is one of the pillars of Avril. It is central to its mission, which is reflected by the Group’s unfailing commitment to supporting actors at all levels in the agriculture and agri-food industries. Avril has proved its ability to form close links with these actors – agricultural producers, livestock breeders, research scientists and investors. With them, it contributes actively to the implementation of progress initiatives to create value and offer practical
responses to the societal, economic and environmental challenges related to developing these sectors in different regions. Through Avril 2020, the Group seeks to reaffirm and broaden the scope of its commitments.
GÉRARD TUBÉRY Chairman of the FOP
Sustainable development, a lever for Avril’s long-term future
KRISTELL GUIZOUARN Director of Sustainable
Development
21
AVRIL — ACTIVITY REPORT 2015
22
STRATEGIC AREA #1
A NECESSARY REDUCTION IN COSTS
The challenges of competitiveness are central to the strategy of Avril, whose mission is to create value in its different sectors. In a difficult economic environ-ment, where falling oil prices have had a major impact on biodiesel, one of the principal activities of the Group, and the French livestock industry is experienc-ing unprecedented distress. Avril is pursuing its efforts to contain its costs. The aim is to preserve the profitability and future of its activities, notably in commodities markets. In 2015, the operational and strategic excellence approach (EOS), which had already achieved savings of nearly €50 million since it was introduced in 2013, entered a new phase (see opposite).
CONTINUING TO INVEST IN ORDER TO GAIN IN PERFORMANCE
Between 2013 and 2015, Avril achieved record investments of €550 million, three-quarters of which were used to develop its industrial assets. On its side, Sofiprotéol invested €124 million over the three years in providing long-term support for the consolidation of compa-nies in French agricultural and agrifood sectors. Despite the difficult environ-ment, the pursuit of investment is the watchword throughout the Group. In 2015, nearly €140 million were once again committed, and major projects reached their conclusion, such as the biomass boiler to support the new ester-ification unit in Sète (Hérault), the Sim Sanders cattle feed plant in Algeria, the
most recent industrial facilities for Lesieur Cristal in Morocco for its Taous soap brand, and the new Lesieur facility in Bassens near Bordeaux, which has been wholly operational since July 2015.
INTEGRATING THE CUSTOMER DIMENSION AT ALL STAGES IN THE VALUE CHAIN
Gaining in-depth knowledge of cus-tomers in each area and consolidating this at Group level is a priority for Avril, with a dual objective: to draw optimum benefits from its sectoral organization and to transmit customer expecta-tions upstream, so that the Group can produce better and in a more targeted manner. Avril’s ambition is also to enrich its port-folio of industrial customers and make this an opportunity for growth. With the purchase of the British Kerfoot Group, Avril has created a new market for the sale of refined oils in the cosmetics and food sectors, in synergy with Lesieur Solutions Industries. Finally, value creation also requires a perceptible differentiation by consum-ers. That is the mission of the French sectors of excellence set up by Avril with partners such as Fleury Michon or McDonald’s.
Reinforcing a customer culture, developing commercial networks, increasing the competitiveness of industrial facilities by capitalizing on the Group’s know-how in terms of operational excellence, and working to develop sectors thanks to investments by Sofiprotéol, the Group’s finance and development arm, are all levers that should permit Avril to confirm its leadership in France and provide foundations for its conquest of international markets.
A customer-focused Group that is strong
and competitive in its markets
ON THE WAY TO AVRIL 2020
Operational excellence is a constant objective
23
For Avril, safety remains an absolute priority. Between 2013 and 2015, the number of accidents fell by 57%.
This achievement was driven by a progress initiative called EOS Safety, which targets zero accidents throughout
the Group’s activities. Three other EOS levers were operated with success. While continuing to pool its purchasing
operations (savings of more than €20 million achieved in 2015), Avril introduced a Supplier Relationship Management
(SRM) process to reinforce links with its strategic suppliers. In terms of industrial performance, more than 200 projects were launched and generated €8.5 million of added value.
These included the Eggxcellence program, which by improving the egg packaging lines contributed a gain in productivity
of more than €1 million. Performance management methods are now deployed in all factories, and a road-map allows each unit to assess itself. Finally, with respect to energy
performance, 100% of the Group’s factories should obtain ISO 50001 certification during 2016.
Our challenge is to consolidate our EOS programs, through the integration in 2016 of logistics and quality,
so that the Group will comply with the best global standards.
— GABRIEL KRAPF
Industrial and International Development Vice-President
Energy performance as an illustration of operational excellence.Here, in Sète, sunflower hulls from the Bassens plant supply the energy necessary to operate the Saipol factory.
AVRIL — ACTIVITY REPORT 2015
24
STRATEGIC AREA #2
A SECTORAL STRATEGY FOR INTERNATIONALIZATION
With Avril 2020, the Group is laying the foundations for a new dynamic of global strength. Its ambition is to transpose the sectoral model at an international level, as is already the case in Romania with Expur, and Morocco with Lesieur Cristal. In the Moroccan market, Avril is contributing to structuring the oilseed sector through its commitment to the Green Morocco plan, which reached its maturity in 2015 with the production of 9,000 tonnes of olives (+50%) and 25,000 tonnes of sunflower (+80%). Avril’s objective is to broaden the impact of these efforts to Sub-Saharan Africa (see opposite). In other Maghreb coun-tries, consolidation is already under way. In Algeria, Sim Sanders opened a new cattle feed plant and the Group is plan-ning the construction of a mayonnaise factory with Lesieur. In Tunisia, the Group – which already operates an oil packaging plant – is aiming to grow further upstream.
MORE MARKETS FOR PRODUCTS AND SERVICES
Avril’s internationalization also means advances in its know-how in specialty areas. In symmetry with Oleochemicals, which is developing products with high added value, Avril is also exploiting its expertise in livestock husbandry and animal nutrition at an international level. This is the vocation of the Biosecurity & Nutritional Specialties business line, which is accelerating its deployment
outside Europe through bases in Brazil, Turkey and Vietnam, and alliances in China, Senegal and Cameroon. Following the same logic, Saipol has created a new activity with The Kerfoot Group, relative to vegetable oils for international indus-trial customers (see p. 37). Already a major exporter, Avril is also enhancing the reputation of its finished products. By taking over SPHB, leader in edible oils in Reunion Island, Lesieur aims to develop its presence in the East African and Indian Ocean markets.
A NEW IMPETUS AND APPROPRIATE ORGANIZATION
To accelerate its growth, Avril has equipped itself with an organizational structure adapted to its new geograph-ical ambitions. Based on its French and European roots, the aim is to develop bases in three major regions: Africa, North America and Asia. In each region, Avril has a clear objective to conquer new markets, a good example being a North American market for olive oil from its Moroccan olive groves.
Accelerating the Group’s international development is fundamental to finding new opportunities for growth. Avril aims to invest in African oilseed sectors as a response to the explosion in local food demand, and to develop its skills in specialty products with global markets (Oleochemicals, Biosecurity & Nutritional Specialties).
A resolutely international group
based on the conquest of new markets
ON THE WAY TO AVRIL 2020
The drive for Africa
25
The demographic explosion in Africa will generate considerable demand for food. In 2020, Nigeria will be recording more births
than China. As its response, Avril is investing in Sub-Saharan Africa in order to develop its food-related activities, as it has
already achieved successfully in Morocco with respect to olive oil and sunflower, and is starting to do in Senegal in the peanut
sector, working with its professional partners. The aim is to give new impetus to local oilseed sectors by providing farmers with the technologies and good practices that will enable them to
increase their yields. After an initial exploratory phase in 2015, 2016 will be the year of strategic decisions: which geographies, which products and with which partners. The Group estimates that by 2020, Africa will account for around 30% of its global
workforce (10,000 people), as opposed to 15% at present. External growth operations or alliances should allow it to
achieve this important step forward.
For Avril, Morocco constitutes a portal of entry to Sub-Saharan Africa. The success of the project undertaken in partnership with
the Moroccan Kingdom to revive the cultivation of sunflower is a great example of the relevance of the Avril model in the region. It increased
areas of land used for this crop and assured guaranteed prices for producers. In the same logic, Avril is aiming to help revitalize
the oilseed sectors in Africa.
— YVES DELAINE
Deputy CEO, in charge of the Oilseeds Processing, Oils & Condiments and
Oleochemicals business lines
Through Lesieur Cristal, Avril is one of the first aggregators in the Moroccan olive sector.Here, the El Kelaâ des Sraghna olive groves.
AVRIL — ACTIVITY REPORT 2015
26
STRATEGIC AREA #3
A TURNING POINT FOR PROTEINS
2015 was the first year that produced concrete results from Avril’s efforts in the new area of proteins, with the devel-opment of a series of technologies for fractionation from grains and oilseed meals. The aim is to produce concen-trates (60% protein) and isolates (90% protein) based on rapeseed and sun-f lower, and to develop specia l t y products for different markets. The concentrates have an optimum compo-sition in amino acids, thus providing solutions for animal nutrition. As a raw material for aquaculture, they can also replace soybean as a feed for young animals. In human foods, the Avalon program, a winner in the French World-wide Innovation Challenge, aims to propose isolates and derivatives for the development of foods based on vege-table proteins other than soybean. The third application is Proteochem®, a promising area for Avril (see opposite).
INCREASED RID1 IN SPECIALTY SECTORS
Research is the backbone of develop-ment in specia l t y area s such a s oleochemicals, where investments are ongoing in industrial biotechnologies. In Venette (Oise), the first products to result from these processes are now leaving the laboratories. In terms of animal nutrition and improvements to livestock practices, innovation will make the difference on the international stage. Research is central to the Biosecurity & Nutritional Specialties business line, with
a team that should double in size between now and 2020 and will be focusing on highly ambitious and inno-vative projects. Synergies are being developed with plant chemistry to develop biosecurity products and micro-organisms for preventive use.
A RENEWED COMMITMENT TO INNOVATION
To achieve scientific progress, Avril is involved in breakthrough innovations through its partner platforms. The BioTfuel project aims to produce a new generation of biofuels that use different types of biomass. 2015 marked the start of construction of two demonstrators dedicated to the processing of biomass, and these two pre-industrial units are scheduled to start operations at the end of 2016. The Energy Transition Institute (Institut de la Transition Energétique, ITE) P.I.V.E.R.T. 2 is pursuing its work to build the biorefinery of the future, through the initiation of several pilot plants at the Biogis Center. In addition, Sofiprotéol continues to provide active support for research that will serve this sector. The CapAgro Innovation venture capital fund has already made eleven important investments. And in early 2016, in the context of managing the FASO 3 interprofessional fund, Sofipro-téol signed an agreement with Dow AgroSciences to develop protein-rich rapeseed. 1 Research, Innovation, Development2 Picardie Innovations Végétales, Enseignements et
Recherches Technologiques (Picardy Plant-based Innovations, Teaching and Technological Research)
3 Strategic Oilseeds and Pulses Action Fund
Innovation is an essential lever to develop new skills and markets. Avril notably aims to better exploit the protein fraction of grains and increase its market share of specialty products with a high added value. The Group is also committed to supporting research by investing in upstream agriculture through Sofiprotéol.
Innovation to drive the creation of
sustainable value
5 principal RID 1 centers in France,
Morocco and Malaysia
15 patents filed each year
Birth of a new area: Proteochem®, protein chemistry
Avril’s RID efforts have evidenced the valuable qualities of rapeseed proteins as additives in the resins used for
wood-based composite panels. To manufacture this additive, the Group has set up a joint enterprise with the Israeli start-up Biopolymer Technologies (BPT). This highly innovative additive
has several benefits for industrial customers in the sector: they can use less resin to achieve equivalent performance,
replace current resins with those that are less toxic, and finally optimize their spread, thus enabling a 20% gain in productivity.
Avril is also pursuing its research on the ligneous fraction of oilseed meals in order to develop wood glues and material strengtheners. Thanks to this new know-how, the Group will
soon be developing biosourced solutions for the timber industry, a global niche market that can contribute
considerable added value.
2015 was a key year for proteins: we saw the concrete results of our initial projects on the protein fraction of oilseed grains.
The new life given to oilseed meal opens the way towards numerous applications.
— JEAN-FRANÇOIS ROUS
Vice-President for Research & Innovation
Research is the backbone for the development of specialty products.Here, a colleague in the Oleon laboratory at Ertvelde, in Belgium.
ON THE WAY TO AVRIL 2020
27
28
AVRIL — RAPPORT ANNUEL 2015
STRATEGIC AREA #4
People to serve the ambitions of Avril 2020
THE DEFINITION OF A MANAGERIAL IDENTITY
In response to the challenges of Group change, the Human Resources Division initiated an ambitious management program called “Manager@Avril”. Its ambition: to federate the 950 managers in the Group – all ambassadors for the success of Avril 2020 – around its values and priorities. Seminars permitted everyone to express their expectations and needs, and to contribute to mode-ling the missions and objectives specific to Avril’s managers. Four central mis-sions have structured this approach: to improve health and safety at work, develop a culture of excellence, mobilize and drive the careers of colleagues and encourage initiative and creativity. This definition of managerial identity marks the first milestone for the Avril Acad-emy, a “university” that will gradually encompass all existing training arrange-ments, thus constituting an efficient vector to disseminate the Group’s cul-ture and skills.
DIALOGUE TO IMPROVE COLLECTIVE DEVELOPMENT
Two major commitments were made at Group level. They are contributing to improving the cohesion and adhesion of all to its strategy. As from 2016, two staff representatives are now partici-pating in the decisions made by the Supervisory Board. The Group wanted them to be elected by their peers, and 60% of Avril ’s employees in France participated in the vote. A European
Works Council has also been set up, and comprises representatives from six European countries as well as observers from Morocco.
UNIFYING PROJECTS
Health and safety remain the central priority. Through improvements to exist-ing measures (safety visits, health and safety in-house challenge) and the inte-gration of safety goals in the missions of managers, accident rates (TF2) have continued to fall: a 57% reduction in three years, in line with the objective of a 20% reduction each year. Another major project concerned the mobility of talents, a major opportunity to accelerate career paths. This pro-gressed throughout the Group and this year concerned several dozen employ-ees. This dynamic also illustrated the growing importance of the Avril careers website 1 , which offered more than 500 jobs in 2015.Efforts towards diversity were pursued. In early 2016, during the opening cere-mony for the Lesieur plant in Bassens, Avril signed a partnership agreement with the Government in the context of the “Entreprises et Quartiers” Charter. Between now and 2018, the Group is committed to employing 400 young people in alternating training (as opposed to 153 in 2014) and at least 6% of disabled people throughout all its sites, both in France and other countries.
1 http://carrieres.groupeavril.com/en
Avril 2020 is a collective project involving the 7,200 employees who work alongside the Group’s partners (agricultural producers, livestock farmers, research scientists and investors) and contribute to developing sectors of excellence at the service of the French Farm. Pursuing the dynamic initiated through consolidation of the Group, the Human Resources Division strive to enhance the commitment of all employees to serving Avril’s model and deploys original and innovative projects to drive major change.
ON THE WAY TO AVRIL 2020
29
Meeting the “Faces of Avril”
The Group’s identity is now asserting itself. The foundations have been laid and the dynamic initiated. We are now accelerating a convergence of practices and transversality at all levels, in order
to reinforce our collective commitment and make each person an actor in the success of Avril 2020. HR managers are the drivers
for this change.
— PHILIPPE LAMBLIN
Human Resources Vice-President (VPHR), in charge of Health, Security and Well-being at work.
In 2015, a recruitment campaign was launched to illustrate the new identity and broad diversity of the Avril Group.
The Human Resources Division asked 19 employees, representative of different professions and functions within
the Group, to embody these new faces. They included Andrea, an operative with Matines, Sofie, a laboratory technician at Oleon, and Maxime, a technical sales representative
with Sanders. Video clips of their testimony can be accessed via the Avril Group website (http://bit.ly/1LWQjxz).
This unifying project is an excellent reflection of the Group’s vision: its employees are the foundations for its success.
An employee shareholder fund is planned to open in 2016.
Our colleagues, the foundations for Avril’s successHere, Maxime, a technical sales manager in the ruminants sector with Sanders Ouest.
AVRIL — ACTIVITY REPORT 2015
30
A C T I V I T I
E SOVERVIEW
OF ACTIVITIES
DES ACTIVITÉS
PROFIL
31
A C T I V I T I
E S
Sofiprotéol, finance and development company
01 Oilseeds Processing
02 Oils & Condiments
03 Oleochemicals
04 Animal Nutrition
05 Biosecurity & Nutritional Specialties
06 Animal Processing
07 Avril Development
Avril’s activities are organized around its two complementary skills: investment and development with Sofiprotéol,
and industrial activities organized according to 7 business lines. A simplified organization to gain in reactivity.
AVRIL — ACTIVITY REPORT 2015
32
Sofiprotéol, a winning model
for France’s farmSofiprotéol supports value creation to benefit French farming and all its actors. In 2015, thanks to its new
organizational framework, it increased its investment capacity and broadened the scope of its expertise, in order to serve the development of agricultural
and agrifood sectors from upstream to downstream.
Loyal to its values and original activities,
Sofiprotéol drives a unique economic model based on
sustainable and responsible investments that are in the
general interest. By creating trusted partner relationships,
we can create value that will serve both our partners
and all sectors of agriculture.
MICHEL BOUCLY Deputy Manager
of Sofiprotéol
Working from strong foundations and with its own
dynamic, Sofiprotéol has pursued its mission at the
service of French agriculture, its ambition being to find new markets for French
products, develop healthy sectors and foster innovation.
The Avril 2020 strategic plan will give new impetus
to our commitments, the first step being taken in the area
of ingredients.
CLAIRE MAINGON Director of Investment,
Deputy Director of Commitments
33
AN AMPLIFIED DYNAMIC
For the past 30 years, Sofiprotéol, as a finance and development company, has been providing support for companies in the agricultural and agrifood sectors by taking minority shareholdings and offering loans. The aim is to support their growth for the long term and ensure a future for these French sec-tors. This mission in the general interest was reaffirmed in 2015 by Avril’s new governance structure: the activity was given a new organizational framework and more resources, its capital base rising to €330 million. This new config-uration offers Sofiprotéol a wider margin of maneuver and greater visibil-ity in the markets, thus reinforcing its position as a driver of development in French sectors, alongside its interpro-fessional partners.
A GROWING ROLE IN THE CONSOLIDATION
OF FRENCH SECTORS
In line with its forecasts, Sofiprotéol invested €36 million in 2015. Reconcil-ing its long-term vision with the creation of value, the company focused its sup-port on agricultural and agrifood sectors, which are central to its business model. Thus in line with rapeseed and sunflower activities, it drove the revival of a sustainable and competitive French, non-GMO soybean sector. Seed pro-ducers, grain elevator operators and industrial firms thus combined forces around a collective approach to guar-antee long-term markets for farmers
and enable the funding of industrial facilities where more than 120,000 tonnes of soybean should be processed between now and the end of 2016.Sofiprotéol also pursued its alliance strategy in favor of consolidating French livestock sectors (see inserts pp. 34-35): by supporting the takeover of the poul-try f irm Doux by Terrena, and by developing new synergies with Hendrix Genetics, leader in multi-species live-s tock breeding , in l ine wi th the promising work on the turkey initiated with Sanders, MiXscience and Ceva Animal Health, specialist in avian vac-cines. Also closely involved in efforts relative to innovation, Sofiprotéol supported a range of R&D projects, working with the FASO1. In 2015, a third of the funds held by the FASO were thus devoted to upstream agriculture, and particularly seed research, allowing the implementation of highly innovative studies such as the genotyping of sunflower, a “world first” achieved in Toulouse in collaboration with INRA, or the development of a protein-rich non-GMO rapeseed in the context of an exclusive agreement signed between Sofiprotéol and Dow AgroSciences. Sofiprotéol also pursued its partnership with CapAgro Innovation, the first venture capital fund in France dedicated to agri-culture, thus enabling support since its creation of eleven innovative start-ups.
AN ACCELERATION OF COMMITMENTS
In the context of the Avril 2020 strate-gic plan, Sofiprotéol will be increasing
its commitments. As the Avril Group subsidiary responsible for minority shareholdings, it has decided to attain a minimum investment volume of €250 million during the period covered by its new plan (2016-2020)2, as opposed to €215 million during the previous five years. The scope of its interventions has indeed broadened to new sec-tors of activity in addition to different French agricultural sectors. Sofiprotéol has defined the three areas of intervention it will target preferen-tially in the coming years:- upstream agriculture, and notably support for the development of deci-sion-support tools so that farmers can produce more efficiently and be more competitive; - ingredients, an area that reflects the orientation towards vegetable proteins adopted by the Avril Group and where Sofiprotéol was positioned as early as 2015 by taking two stakeholdings: one in Solina, the European leader in ingre-dient-based tailor-made solutions for the agrifood industry, and the other in Inveja, in collaboration with the coop-erative group Terrena (see p. 35).- the dairy sector, which is the lead-ing consumer of rapeseed meals and where an increase in demand is inev-itable. A strategic choice that once again follows a logic of long-term investment, in order to consolidate the French dairy sector that is currently undergoing major change.
1 Strategic Oilseeds and Pulses Action Fund 2 Not included projects funded by the FASO.
OVERVIEW OF ACTIVITIES
A team that listens to its partners
AVRIL — ACTIVITY REPORT 2015
34
SofiprotéolKey facts and figures
CapAgro Innovation, promising successes
Sofiprotéol is one of the founder partners in CapAgro Innovation,
the first venture capital fund in France dedicated to supporting innovative
start-ups in the sectors of agriculture, food, and renewable chemicals and energies. Launched in April 2014,
the fund saw its capital base increased from €37 million to nearly €60 million, thanks to the entry of new subscribers
such as the Terrena cooperative or the Bel Group, and it has received more than 300 applications from candidate companies. Since its creation, it has made eleven investments, a figure much higher than the initial target of funding three or four companies
each year. Examples of the companies chosen include Force-A, the inventor
of tools for early diagnosis in precision agriculture, Vitamfero, which
specializes in innovative treatments for infectious and parasitic diseases in the
veterinary health sector, and Naïo Technologies, a manufacturer of robots
for farmers that can improve their profitability and working conditions.
Doux, building a national poultry “champion”
Sofiprotéol supports companies identified as being structuring in strategic agricultural sectors
by developing alliances so that they can become efficient performers
in highly competitive environments. In its capacity as a minority
shareholder, it thus provided support for the cooperative group
Terrena (the owner of Gastronome) in its takeover of the poultry firm
Doux, the agreement being finalized in March 2016. The resulting Group has thus consolidated its position
as number two in the French poultry market. Sofiprotéol’s
ambition is to back the recovery efforts initiated by Doux since 2012
and to contribute to developing a national leader that is competitive
at export and creates value for French livestock breeders.
More than
100 companies supported
80,000 jobs concerned
€ 330m capital base
€ 250 m of investments
between 2015 and 2020
50 stakeholdings
35
Inveja: a first investment in food ingredients made
using vegetable proteins
Sofiprotéol took a minority stake in the capital of Inveja, a company
specialized in the design, production and marketing of food ingredients made using vegetable
proteins (lupin) and cereals and intended for use by the makers of bread, viennoiserie and pâtisserie.
In this partnership, Sofiprotéol is associated with the cooperative
group Terrena, which has long been involved in the ingredients sector
and shares its vision concerning the development of vegetable proteins. The aim is to foster the emergence
of a significant actor in the European ingredients market
between now and 2025.
Hendrix Genetics, fostering synergies between actors in
livestock production
A family-owned company, Hendrix Genetics has become a global
leader in animal breeding. Sofiprotéol took a capital stake
in the company in 2008, and has since supported the major stages of its growth, such as the takeover in 2011 of the Grelier Group, leader in the turkey sector. In 2015, after selling some of its stake in order to encourage the entry of new
shareholders, Sofiprotéol supplemented its remaining
investment with a loan that would open the way to new growth
opportunities. This choice reflected its desire to offer long-term
support in this flourishing sector.
€223 m
Breakdown of commitments in 2015:
01 40 % Agricultural and food processing
and by-products
02 25 % Upstream animal production
03 18 % Upstream plant production
04 10 % Sustainable innovations,
investment funds, other
05 7 % Food products
and consumer goods
OVERVIEW OF ACTIVITIES
Thanks to its numerous connections in French agriculture and its
agrifood industry, Sofiprotéol’s support was a determining factor in accelerating our growth. Today,
France is the country where our Group is most active, with turnover worth €200 million, 40% of which
is at export. Since 2008, our turnover has quadrupled and the number
of people we employ has increased six-fold, to reach 1100.
01
03
0205
04
LAURENT TAALBI CEO of Hendrix Genetics France
AVRIL — ACTIVITY REPORT 2015
36
Oilseeds Processing
Finding new levers for growth
Confronted by a particularly unfavorable macroeconomic climate, the Oilseeds Processing
Business Line optimized its industrial performance, equipped itself with new commercial tools and developed its international activities.
We need to be strong in our two main areas: grain processing and the sale of oils and oilseed meals.
In the former case, by controlling the risks linked to market fluctuations and
in the latter by drawing strength from the French sector to internationalize our products with high
added value.—
JEAN-BAPTISTE BACHELERIE General Manager of the Oilseeds Processing
Business Line
€ 3 bnturnover
11sites, of which
7 in France
t
OVERVIEW OF ACTIVITIES
ACTIVITIES EXPOSED TO MARKET FLUCTUATIONS
Oilseeds Processing assures the first step in the exploitation of oilseed grains. It groups both industrial crushing, ester-ification and refining, and the sale of oils, oilseed meals and biodiesel to customers within and outside the Group. In 2015, our results were impacted by a particu-larly unfavorable macroeconomic climate. Despite Saipol having crushed a volume of grain never previously attained (3.9 million tonnes), the considerable volatility of agricultural raw materials markets (grains, oil) caused a collapse of margins during the second half of the year. At the same time, the abundance of soybean in the global market triggered a reduction in the competitiveness of rapeseed and sunflower meals. To these should also be added the unfavorable situation in the French livestock industry, which led to a drop in demand.In the esterification market, the sus-tained decline of petroleum – and thus diesel – prices generated negative mar-gins throughout the year, despite a volume strategy encouraged by the regulations, as French diesel now con-tains up to 8% biodiesel and nearly 4% in off-road diesel. With the end of tax mechanisms to support biodiesel, the context will be even more complex in 2016.To support activities in this field and continue to guarantee markets for the sector, it is vital to find new levers for growth while constantly improving pro-duction costs and controlling risks.
NEW SOURCES OF ADDED VALUE
This has been a real strategic turning point for actors in Oilseeds Processing. The aim is to create new sources of added value to compensate for struc-turally exposed activities, by diversifying both supply and geographical targets. In 2015, Avril laid the first foundations of this strategy for the long term. In the refined oils market, the Group set up a new activity oriented towards industrial customers, with supply adapted in terms of both products and services. Acquisition of The Kerfoot Group forms an integral part of this strategy (see insert). This British company, specialized in the distribution and packaging of veg-etable and specialty oils, offers a base for the development of this new activity, which will be structured in 2016 in synergy with Lesieur Solutions Industries (LSI). This takeover has also reinforced the line’s international activities, which con-stitute the second area for diversification. A Saipol Asia office is opening in Singa-pore in 2016, to develop a local commercial strategy for our oils,
37
JENNIFER KERFOOT
Chief Executive of The Kerfoot Group
We have been working with Saipol for almost 30 years. We have developed excellent partnership relations. These closer ties with Avril will allow us to benefit from considerable industrial and commercial support, and to be more competitive in the British market. Furthermore, we share with Avril the same vision of our sector, and very similar values, based on integrity and respect.
Acquisition of The Kerfoot Group: new markets for oils
The Kerfoot Group, whose acquisition by Avril was announced in August 2015, joined the Oilseeds Processing Business Line. This British family firm, one of Saipol’s historical partners, packages and distributes vegetable oils that will be used by numerous customers, notably in the food and cosmetics industries.
Its two industrial sites allow it to supply more than a thousand customers throughout the world. This takeover will permit Avril to extend the scope of its activities in the UK and opens the way to new international markets for the vegetable oils produced by the Group.
AVRIL — ACTIVITY REPORT 2015
38
Safety, a source of real prideProgress in the Oilseeds Processing line with respect to safety has been a good illustration of its advances in terms of operational control. In 2015, the accident rate was reduced by half. Some sites, such as Montoir-de-Bretagne, have seen no accidents for three years. Those in Bassens and Dieppe have largely exceeded a year without accidents. Our teams have responded to the dynamic of taking responsibility for their actions, around the central theme of operational excellence.
targeting food markets in India, China, Korea, Vietnam and Japan, and placing emphasis on their French origin.In the oilseed meals market, in parallel with an international volume strategy, the commercialization of high-protein meals, associated with advice and for-mulation support, is developing and targeting markets such as Turkey, Israel, Saudi Arabia and several countries in North and Sub-Saharan Africa. A lever for this activity is a value creation process called the “Alternative Protein Solution” which is being implemented with support from MiXscience.
ACCELERATION OF COMPETITIVENESS PLANS
In its industrial activities, the core skill of this business line, performance was more crucial than ever. The EOS operational and strategic excellence program imple-mented within the Group as from 2013 produced some remarkable results and improvements were pursued in three areas: industrial facilities, purchasing and logistics.Major investments were made in 2015 in order to optimize the Saipol site in Sète (Hérault), improving both biodiesel man-ufactur ing cost s and the energ y performance of the plant (see insert). On its side, Expur in Romania increased its refining and packaging capacities. Achievements in 2015 also concerned savings of €3 million made by Saipol’s purchasing activities, and the same goal is targeted for 2016. Finally, in terms of logistic competitiveness, a new supply chain department now takes account of
01. “Operatives in motion”, by Nicolas Gauthier (Saipol), 2015 photo competition (2nd prize).02. “Selfie”, by Nicolas Gauthier ( Saipol), 2015 photo competition.
01
02
39
all market constraints upstream and customer demands downstream. The aim is to optimize all fluxes, from grain to finished products. Introduced by Saipol in 2015, it is now being deployed at Expur. In 2016, the line plans to achieve savings of €11 million.
IMPLEMENTATION OF A TRADING STRATEGY
To better understand market fluctuations, optimize risks and ultimately be more competitive, a trading community has been created around Saipol, Expur and The Kerfoot Group. Each week, the trading strategy is defined for grains, esters, oils and oilseed meals, based on an inventory of the supply and demand of all raw materials that impact their activities and all factors that might influence prices. With respect to grains, the line is imple-menting a mixed origin strategy,
OVERVIEW OF ACTIVITIES
Preserving and developing biodiesel markets
depending on the type of finished product (biodiesel, refined oils, etc.).2015 also marked the initiation of desti-nation trading, with some important achievements: the sale of biodiesel in Sweden, soybean meal in Algeria and sunflower oil in South Africa. The target markets have been clearly identified: Mediterranean region for oilseed meals, Asia and South Africa for oils, Europe for biodiesel.
In October 2015, Saipol started up a new esterification unit on its site in Sète (Hérault). €13 million were invested in this high-tech facility, which is wholly integrated in the multimodal infrastructures of the Port of Sète. A further investment of €15.5 million allowed the construction of a biomass boiler that enables a 90% reduction in annual greenhouse gas emissions by the plant, and ensures that it is 75%
self-sufficient in energy. In a context of overcapacity in the European market and regulatory uncertainty, these investments, initiated in 2014, reaffirm Avril’s confidence in the future of French biodiesel as a renewable energy that can contribute to energy transition. They also reflect Avril’s commitment – despite the difficult economic climate in 2015 – to preserving and developing this market for French oilseed producers.
4.3 million tonnes of rapeseed
and sunflower grain crushed
2.3 million tonnes of oilseed
meals produced
2 million tonnes of biodiesel
manufactured
AVRIL — ACTIVITY REPORT 2015
40
Oils & Condiments
Leading brands in their markets
Faced with a very difficult market environment, the Oils & Condiments Business Line drew strength from
its sectoral organization and constant innovation dynamic to consolidate its positions in local markets and lay solid
foundations for its international development.
2015 was a pivotal year: we fixed ourselves some
new growth targets and more than ever equipped ourselves
with the resources to improve our positions. We are working in all
markets to take up new challenges and develop
our activities.—
YVES DELAINE Deputy CEO, Avril Group
€1 bn turnover
12sites, of which
7 in France
1.2 mtonnes of
table oils sold
37,000tonnes of soap sold
42,000tonnes of sauces sold
41
OVERVIEW OF ACTIVITIES
41
The market leader in edible oils, third in condiments and present in 65 coun-tries, Lesieur capitalizes on its major brands – Lesieur, Puget, ISIO 4 – and its strong positioning regarding quality, nutrition and sustainable development.
These crucial advantages allowed Lesieur to maintain its positions in 2015, despite a difficult environment and the effects of a marked rise in olive oil prices, a drop in oil consumption and new buy-ing alliances among French supermar-kets: indeed, Lesieur was able to win market share in all its distribution cir-cuits (international, major retailers, out-of-home dining and B-to-B with Lesieur Solutions Industries) with respect to both oils and condiments. These good performances validated Lesieur’s busi-ness model, which combines products with high added value (specialty oils, oils of 100% French origin such as Fleur de Colza and, since this year, sauces made using French oils) and an efficient mix of innovation and communication. One of the most notable successes was the 1.5 L format of Puget oils, which broke the record of 1.7 million liters sold.
CREATING VALUE FOR THE LONG TERM
In France, major efforts were made to attract younger consumers. This involved innovations in packaging (such as Stop Goutte, a no-drip bottle that enables more precise dosing) and recipes (with new ideas in all product ranges for 2016, such as ISIO 4 Touche de Noix, Duo Tournesol & Olive, Duo Huile & Aromates, MayoDuo,
Vinaigrette légère ISIO 4 Fines Herbes Ciselées, etc.). This was supported by more emphasis on digital communication, with a web series “Sans en faire tout un plat”1 (No need for a fuss) where Fred Chesneau meets people who do not usu-ally think about cooking every day, and the interactive experiment “Aux sources de Fleur de Colza”2 (Back to the source of Fleur de Colza) which describes the dif-ferent steps in the production of rapeseed oil, from the bottle to the grain. The brand has also modernized its visual identity through a brighter and more modern logo expressing the qualities that have always been associated with Lesieur: expertise, cheerfulness, a love of good food and the pleasure of cooking.Outside France, Lesieur has focused in particular on the export of condiments as a growth opportunity. The company experienced considerable success in Asia through its presence in six countries, and is growing strongly in Africa, the core target of the brand, where 20 countries already account for 38% of its export volumes. Lesieur will be able to draw strength from its acquisition of SPHB, the leader in the Reunion Island edible oils market, to reinforce its presence in East Africa and the Indian Ocean. Investment is also planned in a condiments factory in Algeria, in order to meet the needs of a strong growth market. In parallel, Lesieur has consolidated its production facilities, in line with the oper-ational excellence program implemented by the Avril Group. 1 http://www.lesieur.fr/Cuisine-populaire/Sans-en-faire-tout-un-plat
2 http://www.lesieur.fr/Produits/Fleur-de-Colza
The new Lesieur bottling and packaging plant at Bassens (Gironde) was inaugurated by Prime Minister Manuel Valls on 15 January 2016. The company thus joined Saipol, which has been on this site since 2003. This grouping consolidates a high-tech agri-industrial cluster that is unique in France, as it covers all Avril’s activities in the area of oilseed products. It is the perfect illustration of its model that integrates both upstream agriculture and downstream industry, and its commitment to creating value in different regions. This ultra-modern site produces around a hundred different products and has benefited from investments worth €31 million. It employs 200 people, 94 of whom in the new Lesieur factory.
Bassens, the first “from grain to bottle” sectoral site for Avril
In Bassens, Lesieur packages more than
100 products on 5 production lines.
2015 AS SEEN BY ROMAIN NOUFFERT, GENERAL MANAGER OF LESIEUR—
Lesieur: consolidating the leadership through new growth areas
AVRIL — ACTIVITY REPORT 2015
42
A key actor in the Romanian oilseeds market, Expur assures the collection of rapeseed and sunflower grain on behalf of Saipol and for its own site in Slobozia. It sells processed prod-ucts (oilseed meals, edible oils and biodiesel) in Romania, which serves as a development platform for the Black Sea region and Mediterranean basin.
Despite a complex market environment marked by high grain prices, an abun-dant soybean harvest and a major drop in diesel prices, Expur consolidated its positions in the Black Sea region and Mediterranean basin, with results in line with its forecasts. Growth was strongly dependent on the Untdelemn de la Bunica brand (the market leader) and biodiesel; despite more aggressive competition in the region, biodiesel retained its market leadership in vol-ume terms in the Black Sea region. Furthermore, efforts to gain in produc-tivity markedly improved Expur’s opera-tional performance, combined with the important commitment of its employ-ees – supported by the creation of the Avril Group – and the benefits resulting from investments made in recent years, all of which contributed to attaining its objectives.
TOWARDS PORTFOLIO DIVERSIFICATION
To enhance its growth in all markets, Expur has initiated an upgrading of its ranges and broadened its activities. In Oils & Condiments, the company is pre-
paring to develop new segments, such as olive oil, with greater added value. Expur has also turned towards B-to-B and developed a specific commercial offering for the agrifood and out-of-home dining industries. Finally, it aims to confirm its advances in biodiesel and intends to pursue its development throughout the region, from the Black Sea to the Mediterranean basin.
A successful relaunch for Untdelemn de la BunicaWith more than 13 million liters sold in 2015, the historical brand Untdelemn de la Bunica achieved a spectacular recovery to become leader in its market, far ahead of its competitors. It owed this success to a complete renovation of its product ranges and the launch of some major innovations that constituted a break with the habits of Romanians, who are major consumers of sunflower oil. The range thus diversified through new products: a rapeseed oil enriched in Omega 3, the addition of vitamin D to sunflower oil and the introduction of a new frying oil. In parallel, the packaging of its bottles was revised and the entire brand image modernized, to refocus on the benefits of healthy cooking. This reworking, coupled throughout 2015 with sustained communication efforts in the press, on TV and via social networks, proved to be a winning formula: the number of liters packaged jumped by 9%.
2015 AS SEEN BY PASCAL PINSON, GENERAL MANAGER OF EXPUR—
Expur: drawing strength from our regional roots
43
OVERVIEW OF ACTIVITIES
Leader in the Moroccan market, Lesieur Cristal holds a portfolio of heritage brands, focused on table oils, olive oil and soaps. Its business model, based on a strategy of inno-vation and continuing diversification, has enabled it to remain relatively unscathed in a deteriorating eco-nomic climate.
In the context of a highly volatile raw materials market and a sustained decline in consumption, sales by Lesieur Cristal recorded growth of nearly 5%, which was a good performance.
AN INVESTMENT DYNAMIC THROUGHOUT THE VALUE CHAIN
Lesieur Cristal has harvested the fruits of its product innovation policy, a key lever to moving upmarket and differen-tiating its products. Sustained efforts despite a difficult environment never-theless earned an Innovation Trophy in 2015 for its historical El Kef household soap brand. Four new products were launched in 2015, and have already proved successful: the Lesieur range was broadened by Lesieur 3G, an oil combin-ing sunflower, rapeseed and soybean; the premium Lesieur condiments range was supplemented by a mustard. In the soap branch, Lesieur Cristal broadened its produce range with a Taous shower gel and a liquid El Kef soap – the brand acknowledged by the trophy for the most innovative brand in Morocco in 2015.Another growth area was export, where sales reached record levels. Lesieur Cris-
Lesieur Cristal was ranked as best employers in Morocco in the large corporation category. This ranking, determined by an anonymous survey of employees at all levels in the companies concerned, is based on numerous criteria: working environment, HR practices, image and community spirit within the company. In the case of Lesieur Cristal, it rewarded an innovative HR policy and the company’s commitment to consistently valuing its employees. Indeed, the latter notably applauded the training policy, based on the Excellium Academy, which offers targeted, multidisciplinary programs, and the working environment, which rewards individual and collective commitment to motivating projects, community events and shared values. “We are proud of this ranking for our company. It shows that we are taking the right path, that there is a dynamic under way”, stated Samir Oudghiri Idrissi, General Manager of Lesieur Cristal.
Lesieur Cristal, the best employer in Morocco
tal accelerated its development in Africa, which imported table oils and soaps, and in the US, thanks notably to the reduced production of Spanish olive oil, which rendered Moroccan products highly competitive. The diversification of products and activ-ities achieved successfully by upstream agriculture also proved fruitful. Initiated in the context of the Green Morocco plan, the olive sector continued to mature, with 9,000 tonnes crushed in 2015, and sunflower also saw major growth, doubling its harvest to reach 25,000 tonnes. The sale of oilseed meals, an activity launched in synergy with Saipol in 2014, recorded growth of around 67% in just one year.
FURTHER EFFORTS TOWARDS IMPROVEMENT
Launched by Avril, the operational excellence program (EOS) once again achieved some very significant opera-tional gains. In addition, Lesieur Cristal signed the Responsible Care Global Charter, which commits a company to obtaining certification in three areas: product management, sustainable development and safety. A further step towards sustainable growth.
2015 AS SEEN BY SAMIR OUDGHIRI IDRISSI, GENERAL MANAGER OF LESIEUR CRISTAL—
Lesieur Cristal: solid foundations for the future
AVRIL — ACTIVITY REPORT 2015
44
OleochemicalsThe strength
of a diversified model
As the only actor in its field, Oleon has successfully reinforced the pillars of its growth model:
industrial performance, a diversified portfolio, an in-depth knowledge of its markets
and the development of specialty products.
In a complex economic environment,
the diversification of our activities, development
of our markets and expansion of our
geographical coverage have allowed us to
become less vulnerable and to seize opportunities
to pursue our growth.—
MOUSSA NACIRI General Manager
of the Oleochemicals Business Line
521,000 tonnes of products biosourced
for renewable chemistry
€ 618 m turnover
6 sites in Europe and Asia
OVERVIEW OF ACTIVITIES
GOOD RESULTS UNDER CONTRASTING CONDITIONS
As the only actor in Oleochemicals, and European leader in its field, Oleon develops, manufactures and sells bio-sourced molecules based on vegetable oils and fats. In 2015, this business line achieved good results, with an EBITDA of €53 million (higher than targeted) in a year marked by a slowing in the global economy and a major drop in petro-leum prices. Although the latter had a positive effect on the energy bills of the Group’s six plants, it above all exerted a negative effect on biosourced prod-ucts, sometimes challenged by petro-leum-based products which benefited from the fall in prices. It also impacted oil drilling activities, an important mar-ket for oleochemical products. In this adverse environment, Oleon was able to resist by focusing on its innovations, its proximity to markets and its geo-graphical coverage.
PERFORMANCE, SPECIALIZATION, CUSTOMER ORIENTATION
Overall, bases and derivatives – the line’s two principal business units –achieved good results, with a particu-larly good performance from base products. This could be explained by an environment that tended to be favora-ble towards raw materials, but above all by sustained improvements in produc-tivity, favored by an operational excel-lence program that has enabled savings worth more than €5 million over three years. However, the strategic objective is still to be less vulnerable to market fluctuations and to bring more value to the sector by developing specialty products. To support these changes, Oleon continues to invest: in R&D, with the test launched in Venette (near Compiègne) of the first bio-surfactants from the biotechnology laboratory –whose team has been reinforced – and in production, with more than €25 mil-lion invested in Oleon’s industrial sites. Generally speaking, the company con-tinues to enhance its practical skills in order to respond to the specific demands of customers. For some mar-kets, such as cosmetics and nutrition, in-house experts in formulation have been trained.
MAINTAINING AN INTERNATIONAL BALANCE
Activities by the Oleochemicals busi-ness line are inherently international, with major growth potential in North America and Asia, particularly for specialty products where nearly 40% of sales are already achieved outside Europe.
45
Breakdown of turnover 2015: Europe Asia North America
Although dynamic in North America, the year was more difficult in Asia. Start-up of the second production unit at Port Klang in Malaysia, specialized in food emulsifiers, is gradually progressing, having required more time to optimize its industrial processes. Oleon was working in the context of a slowing of the economies of emerging countries, which affected Asia during the second half of the year. However, it continues to invest in this region which is highly strategic for olechemicals, and is nota-bly reinforcing its R&D resources and its partnerships with both private and pub-lic research institutions.
GÖRAN LINDQVIST Spend Area Manager, Natural Fats and Oils,
Fatty Acids and Purchasing Manager
SBU EMEIAAkzoNobel
Half a century of a win-win collaboration. As one of the world’s leading suppliers of specialty surfactants, AkzoNobel sees Oleon as a very special partner. In almost 50 years, our companies have brought each other a great deal and strive to meet all the needs of our customers. Oleon is a valuable asset in our commitment to producing best-in-class and tailor-made surfactants that are consistently outstanding, thus providing us with alternative raw materials that will raise our standards even higher.
76%
13%
11%
“It’s all brewing at Oleon”, Nathalie Martinez (Oleon), 2015 photo competition (first prize).
AVRIL — ACTIVITY REPORT 2015
46
Animal NutritionMore than ever committed
to livestock farming
Performance, innovation, advice, differentiation by quality… Sanders, a pillar in the Animal Nutrition
Business Line, reinforces its foundations to support livestock farmers and meet consumer expectations.
In an extremely difficult context for livestock breeding, we remain
committed to our partner farmers. We are continuing
to invest so as to ensure their competitiveness and defend the values
of French livestock production.
— BERNARD MAHÉ
General Manager of the Animal Nutrition Business Line
P 675 C P 280 C C 21 / M 100 / J 0 / N 0 C 100 / M 100 / J 0 / N 22 R 195 / V 0 / B 123 R 0 / V 54 / B 124
€1.2 bn turnover
28 sites, of which
24 in France
3.5
million tonnes of feed produced using Sanders techniques
OVERVIEW OF ACTIVITIES
47
SANDERS CONSOLIDATES ITS POSITION IN A DIMINISHING MARKET
Leader in France in the manufacture of livestock feeds, with strong regional roots and close ties with livestock farmers, Sanders plays a crucial role in the life of all production sectors. In a shrinking market (-0.4% in 2015), particularly in the livestock sectors most affected by the economic crisis – pigs and ruminants – Sanders achieved a 1.7% increase in the tonnage manufac-tured and grew its market share by 1.5%
over 2014, to reach 16.5%. Two levers have allowed Sanders to confirm its leadership: satisfactory growth in the poultry market and tailor-made prod-ucts that have generated 60% of its growth. In addition, the alliance finalized in 2015 between Avril and LDC con-firmed the development of Sanders in poultry, and has given it the capac-ity to invest with its partner livestock farmers, for example in the construc-tion of a hundred new poultry houses each year.
INVESTING AND INNOVATING TO GAIN IN PERFORMANCE
An ability to compete with European manufacturers in order to improve the competitiveness of French livestock sectors is the aim of the strategic indus-trial agreements signed by Sanders in recent years. Alliances with local part-ners whose core skills are not nutrition have enabled it to continue moderniz-ing its plants. In 2015, €15 million were thus invested, including €8 million in the Champagné plant (Sarthe) in partnership with the cooperative group Agrial. These investments also benefited industrial sites in Saint-Gérand (Finistère) and Saint-Thégonnec (Morbihan). These pro-active policies notably enabled Sanders to exceed the threshold of manufactur-ing a million tonne of feed in Brittany. Another ambition for Sanders is to offer top-quality services to livestock farmers so that they can gain in per-formance with respect to animal feeds, as well as the management and organ-ization of their farms. A pioneer in the agrifood sector, the Sanders Sales School thus trained its sixth promotion of students to become livestock advis-ers under alternating training.Performance can also be achieved through innovation. To offer solutions to farmers, Sanders helps them look to the future. Inaugurated in 2015, the new dairy cow facility in Sourches, the leading private European center for research in animal nutrition and livestock management, is unique in Europe (see picture p. 48).
STÉPHANE DAHIREL
Chairman of the Gaévol Poultry
Producers Group
Competitiveness is achieved together!Sanders and Avril have understood this factor through their commitment to supporting livestock sectors as a function of their needs, and by gathering actors from all links in the chain around efforts to reconquer markets. A winning strategy, because our poultry sector is once again seeing growth and we can plan and make investments for the future, in line with demands from society. Another indication is the signature of structuring agreements, such as that finalized in February 2016 between Avril, Boscher Volailles and LDC, in partnership with Sanders and McDonald’s, concerning the supply of French chicken fillets.
“Operative at Sanders”, Pierre-Jean Schwalm (Avril PA), 2015 photo competition.
AVRIL — ACTIVITY REPORT 2015
48
With cutting-edge digital technolo-gies and robotics, it can serve as both an experimental research tool for the dairy sector and a shop window on live-stock farming for consumers. Twelve hundred livestock farmers have already discovered this high-tech center, which also aims to become a focus for exchange between producers and dairy companies.
BUILDING FRENCH SECTORS OF EXCELLENCE
Another high point of the year was the presentation by Sanders at the SPACE 2015 trade fair of its new signature “Nourrir nous engage” (Food is our Commitment), an event that allowed the company to reaffirm its commit-ment to offering greater support to all its partners, starting with livestock farmers. The aim is to draw value from the link between animal feeds and human foods.
Avril - Fleury Michon: a partnership of great value
An excellent illustration of the “Engagés dans l’Elevage” program is the partnership with Fleury Michon, according to a model that Avril hopes to extend to other sectors. For 18 months, teams from Fleury Michon and the three branches of Avril’s livestock activities worked together to compile a common specification. In the exclusive sector that resulted from these efforts, the new range of charcuterie products with the “J’aime” (“I like”) brand carry external signs of
quality – French pigs fed a non-GMO diet with French cereals, raised without antibiotics after 42 days of age – and have been welcomed by consumers. Sanders’ 30 partner livestock farmers involved in this sector of excellence are committed to complying with criteria for sustainable development and animal welfare, and to adhering to a progress plan for five years. In return, they are paid for the quality of their products and earn visibility for the long term.
Sanders already complies with more than 300 specifications (Red Label poultry production, AOP standards in cheese, AOC standards, etc.). Its mission today is to develop sectors of excellence under the “Engagés dans l’élevage” brand (Committed to Livestock). The aim is to create virtuous sectors by associating all links in the chain so that consumers will be offered products that are guaranteed with respect to the environment, animal welfare and nutri-tional quality, as well as being a source of income for farmers. This ambitious program will only be achieved through strong alliances with consumer brands. Thus 2015 saw the birth of a partnership with Fleury Michon that has given rise to a new range of charcuterie products for sale in supermarkets (see insert). Based on the same model, Sanders is working
with LDC and McDonald’s to develop an exclusive sector for French poultry.
FURTHER ADVANCES IN INTERNATIONAL DEVELOPMENT
Although its international activities still remain marginal, Sanders exports its know-how to neighboring countries, based on local partnerships. The aim is to determine growth areas while remain-ing loyal to its fundamental approach: to support livestock farmers to improve their economic and technical perfor-mance. Thus in 2015, Sanders SH took over a ruminant and pig feed manufac-turing plant in Serbia, while SIM Sanders opened industrial facilities in Algeria equipped with the most recent technol-ogies for livestock feed manufacture. Sanders also aims to reinforce its activi-ties in Tunisia, Morocco and Turkey.
OVERVIEW OF ACTIVITIES
49
Biosecurity & Nutritional Specialties Innovation for international growth
2015 was the first year of practical achievements by this new Business Line, which groups all Avril’s expertise in livestock husbandry and animal health. It has ambitious
objectives in a strongly growing global market.
Biosecurity and nutritional specialties are fields for
the future. Avril is focusing all its innovation resources
on this business line in order to offer solutions and services that will
consistently be adapted to the needs of livestock
farmers throughout the world
— JEAN-PIERRE PAILLOT
General Manager of the Biosecurity and Nutritional Specialties Business Line
€138.5 m turnover
10 production sites in 6 countries
AVRIL — ACTIVITY REPORT 2015
50
(specialty additives, nutritional spe-cialties, pre-mixes, minerals, etc.). The Group has also fixed an objective to be amongst the leaders in biosecurity, which groups all preventive hygiene methods applied to both buildings and livestock. Both activities converge towards priority areas in response to global trends regarding the demedi-calization of livestock units: disease prevention, control of the environment and the enhanced immune status of animals. This expertise is not new because this business line concentrates all Avril’s know-how in terms of the performance of livestock units, drawing strength from the first private center in Europe for research in animal nutrition and livestock management at Sourches (Sarthe). Benefiting from considerable scientific resources, work by this center is wholly dedicated to innovation at the service of the Group and of all profes-sionals in livestock production, both in France and internationally.
A SURGE OF INNOVATION
The backbone of our line in terms of research, MiXscience’s innovation strategy is to ensure the rapid market entry of a range of technical products with high added value by developing t h e m i n - h o u s e a n d t h r o u g h acquisitions.In 2015, the start-up company Nolivade joined the line. It specializes in producing beneficial bacterial flora for use in live-stock units that can contribute to reducing antibiotic use by offering alternative
AN AREA OF EXCELLENCE IN A MARKET WITH CONSIDERABLE POTENTIAL
Created in 2014, the Biosecurity & Nutri-tional Specialties Business Line defined its objectives and strategic areas in 2015. Specialized in the products and services that are essential to improving livestock farming in terms of husbandry and the
management of animal health, our aim is to contribute to the leadership of our customers in France, such as Sanders, and to deploy our forces in a strongly growing global market.Our line focuses on two main activities: nutrition-health and biosecurity. Avril thus aims to become a global leader in innovation in livestock nutrition-health
CÉDRIC DE SPÉVILLE
Chief Executive Officer, Food & Allied Group
As an expert in animal nutrition for the past 35 years via its subsidiary LFL, Food & Allied is now a major partner in livestock sectors and animal production in Mauritius and its region, notably through its major industrial activities in Madagascar. Avril’s expertise in the areas of animal nutrition, biosecurity and nutritional specialties, as well as the personal qualities of our collaboration, have allowed us to develop nutritional solutions that are ever more efficient in terms of animal health and the performance of livestock units, thus benefiting the entire value chain in our different markets.
51
solutions. This is a central research goal for MiXscience. Within Avril, Nolivade will be able to advance to an industrial stage, broaden the scope of application of its products and accelerate its mar-keting, with support from one of the leading veterinary networks. 2015 was also the year of the first export successes for MiXscience, and it achieved a major technological breakthrough regarding the pharmaceutical formu-lation of its products.This ambitious innovation strategy needs to be backed by the development of its research teams, which should double between now and 2020 and will be based in a dedicated laboratory in Rennes as from 2018.
DEVELOPING NEW EXPERTISE
To increase its global stature, the busi-ness line is also positioning itself in new sectors such as aquaculture. Initiated in 2015, this expertise will allow MiX-science to offer a range of products and services that meet the needs of this strongly growing market (+10% a year) while at the same time developing its activities in Asia, Turkey, the Middle East and Africa. The product range was presented to the market in early March 2015 during VIV Asia in Bangkok, and the first trials are under way, notably in Vietnamese aquaculture farms. The same objective of developing new expertise also governed the creation of Artemis Laboratoire. After being partners for nearly 10 years, the CCPA Group and MiXscience signed a joint venture to share their chemical, micro-
OVERVIEW OF ACTIVITIES
Innovation on the march
For the Biosecurity and Nutritional Specialties line, product innovation is the lever for international development. In 2015, MiXscience confirmed its early successes with a third of its business at export: Redstim is a nutritional innovation that can be sprayed on feeds and optimizes the early growth of chicks; Lumigard offers an alternative solution for the digestive health of poultry, and Nutriprotect is active on mycotoxins. As for Theseo, it was granted a marketing authorization
for BioVX, a new-generation powdered disinfectant which is one of the first successes resulting from the synergies identified when Theseo took a capital stake in its British counterpart Biolink in 2014. In terms of research, MiXscience has developed a new coating technology that can optimize the assembly of active substances and their release properties. A third of future innovations should utilize this technology, which will be entering its industrial phase by the end of 2016.
biological and veterinary analytical facilities. The aim is to become the second largest private analytical laboratory for animal nutrition in France.
ACCELERATING INTERNATIONAL ACTIVITIES
To target markets that are seeing growth in livestock production, such as South-East Asia, South America and the European and African markets, companies in our business line pursued the development of joint platforms, such as in Poland or Brazil.
www.theseo-biosecurity.com
Usage réservé aux utilisateurs professionnels. Utilisez les biocides avec précaution. Avant toute utilisation, lisez les étiquettes et les informations concernant le produit
DÉCOUVREZ
Une
nouvelle
page
se tourne
*Selon les nouvelles normes européennes EN14675
• Désinfectant large spectre• Virucidie d’excellence• Utilisable sur les animaux et dans l’eau de boisson
DÉSINFECTANT EN POUDRE
AP-biovx-porcmag.indd 1 20/01/2016 15:22
Our ambit ions are considerable. MiXscience aims to grow from five active countries in 2015 (France, Poland, Turkey, Vietnam, Cameroon) to ten in 2020, with plans for an industrial facility in Vietnam. On its side Theseo, which after Brazil in 2013 opened a subsidiary in Poland in 2015, aims to be present in seven strategic countries as early as 2017, notably through the opening of Chinese and German subsidiaries in the near future.
AVRIL — ACTIVITY REPORT 2015
52
Animal ProcessingA strategy to
win back our markets
In a context of over-production, 2015 was marked by important initiatives to ensure a future for the French pork and egg branches, where Avril’s Animal Processing business line is a major actor.
We need a global economic vision of
our sectors. To find the right balance between
all actors and allow each to live from their activities,
we are introducing mechanisms for market
adjustment so that we will only produce
what can be sold.—
YANN RENOUVEL General Manager of
the Animal Processing Business Line
24,000 pigs slaughtered each week
€461 mturnover
3.2 billion eggs sold
12 sites specialized in shell
eggs packaging and marketing, and egg products
2 sites specialized in pork slaughtering,
cutting and processing activities (Abera and Porcgros)
OVERVIEW OF ACTIVITIES
53
A STRATEGIC VISION OF THE MARKET
Through an alliance finalized in 2015, Avril sold to LDC its poultry slaughter-ing and processed products activities so that it could focus on developing an efficient French poultry sector with international ambitions. The Group remains directly involved in managing the processing and marketing of live-stock products in two major markets
for animal proteins: pork, through its slaughtering and cutting activities, and eggs, where Avril reinforced its leader-ship in 2014 by taking total control of Matines. These are two branches which have specific features but common problems: a context of over-production that drives down prices and sectors experiencing major difficulties.In direct contact with the market, the Animal Processing Business Line is strategic to the sectoral approach
adopted by the Avril Group. Its mission is to remain alert regarding customer consumption trends so that it can orient its products at the quantitative, quali-tative and economic levels. In these two branches, setting up a sectoral Management Committee made it possible to retain this global vision and introduce regulatory mech-anisms to ensure value at all levels in the chain.
Pork branch
CONSTRUCTING A SUSTAINABLE PORK SECTOR WITH A LONG-TERM FUTURE
Penalized since 2014 by the Russian health embargo, and suffering due to competition from its Spanish and German neighbors, the French pork sector found itself in over-production, which had immediate effects on prices for a large part of 2015. Despite the context of weak auction prices*, Avril’s pork branch sustained its margins and achieved results in line with its objectives. Abera maintained its role in the specific half-carcass market for butchers and out-of-home dining, and grew at export in the butchery market, notably by selling some cuts to Asia (notably Korea and Japan). On its side, Porcgros profited from its local policies in the Paris region to sell cut and butchered meat in a niche market. In 2016, Avril plans to support the construction in Rungis of a new building dedicated to the sale of pork, which should be opened in 2018.
NEW MARKETS
As well as its own activities, Avril’s pork branch is wholly committed to consol-idating the sector in order to achieve sustainable value for French pork prod-ucts, not only by reconquering markets but through deliberate policies to achieve differentiation. A high point in 2015 was the alliance between Avril and Tönnies, a family-
Birth of the Alliance des Viandes de France (AVF)
The announcement was made in January 2016, but the birth in fact took place in 2015. The joint enterprise between Avril (via Abera) and the German group Tönnies became a reality through the creation of the “L’Alliance des Viandes de France” (AVF). This unites the expertise of both partners in an ultra-modern butchery and processing facility that has been operational since 3 April 2016. The aim is to develop the supply of processed pork products made using 100% French meat to sell in supermarkets. Abera supplies the pork –
guaranteed “5F” (born, reared, slaughtered, butchered and processed in France) – while Tönnies contributes its technical and commercial know-how in the segment of shelf-ready packaged products. The new facility, which results from an investment of €5 million, is based in Vire (Calvados, Normandy) and has resulted in the creation of 30 jobs (which will be 60 by the end of 2016). It also offers new prospects for the French pork sector and its livestock farmers who are experiencing so many problems at present.
* National reference price for pork
AVRIL — ACTIVITY REPORT 2015
54
owned German group that is expert in the area of processed products. This alliance is a good illustration of Avril’s efforts to develop products that are of 100% French origin to be sold by major retailers (see insert).This plan formed part of a strategy to reconquer the market for processed
products made using French pork, in the face of imports that continue to increase. Both Groups are therefore trying to respond to demands from French consumers who are looking for practical French products in their super-markets, benefiting from irreproachable traceability and quality. Abera, which supplies the pork to this new enterprise, has based its strategy on a long-term market and improved its butchery facil-ities with new know-how.
DIFFERENTIATION BY QUALITY
Leave standard products behind and create a sustainable difference that will gain in market value... that is the objec-tive of the “Engagés dans l’élevage” (“Committed to livestock”) initiative which aims to offer consumers products that will meet stringent requirements in terms of nutritional quality, animal welfare and respect for the environ-ment. The “J’aime” (“I like”) products resulting from the partnership with Fleury Michon (see insert on p.48) mobilized different types of expertise from Avril (MiXscience, Sanders, Abera), focused on serving the French pork sector. Avril’s know-how means it is capable of developing sustainable and high-quality sectors. During a difficult period for pork, the Group has continued to invest (€15 million in 2015) to support livestock farmers, helping them to adapt and modernize their farms. Avril is also considering the introduction of new contractual arrangements.
Olivier Pellosio, General Manager of Porcgros
55
OVERVIEW OF ACTIVITIES
TRANSFORMING THE EGG BRANCH
Since 2014, the egg branch has been organized in two activities: the packag-ing and marketing of shell eggs (Matines) and egg products (see insert on Ovoteam). In terms of standard products, Matines suffered in 2015 from over-production and a market affected by major fluctu-ations in price and order volumes. In a sector that is turning increasingly towards alternative methods (free range, Label Rouge, organic, etc.), Avril is particularly exposed to over-produc-tion in the standard egg segment (80% of supply). Although difficult from a financial point of view, 2015 was also a
year full of hope, with the introduction and initial results of a highly aggressive strategic plan called “Eggxcellence”.
THREE MAIN PRIORITIES
The first priority consists in targeting operational excellence to ensure com-petit iveness in the commodities markets. For example, a €1.7 million investment was able to equip the Mat-ines site in Brugnens (Gers) with a cutting-edge industrial tool capable of calibrating 120,000 eggs an hour, or a 30% increase in capacity. As a precursor in the Group, this branch has set up a program to improve the supply chain, based on a national view rather than an accumulation of local microsystems. The
second priority is to re-balance the equilibrium between production and consumer trends: 50/50 between stand-ard eggs and so-called alternative production modes. Finally, in order to find new markets for standard eggs, 2015 saw growth at export towards the USA, Sub-Saharan Africa and Dubai. And at present, the 5-10% of eggs discarded during process-ing are always used for egg products, notably as ingredients by industry.
Egg branch
For processors, a sectoral approach such as that deployed by Avril is characterized by its multidimensional relationships with customers with diverging interests: livestock farmers on the one hand, distributors and industry on the other. A balance between all these actors can be achieved by obtaining a global economic view of the sector and by implementing market adjustment mechanisms. Thus in order to regulate its commitments towards its producers and help them add value to their products, Avril has created a regulatory tool called OR for its egg branch. The OR team bases its work on the constant consolidation of forecasting data on production and sales, so as to better anticipate fluxes and orchestrate the reductions or increases necessary to act on both supply and demand. This tool is notably applied to exports of shell eggs to the US.
For egg products in the branch, and in line with its financial objectives, 2015 was a year of reorganization. All Avril’s expertise has now been assembled in a single company: Ovoteam, which retains Ovipac as its sole brand for out-of-home dining and bakery-viennoiserie-pâtisserie (BVP). At the start of 2016, Ovoteam adopted a new logo to mark this major change. The scope of its activities is European and its development focuses on innovation in its products and services. In 2015, it benefited from its entry into the UK market through its poached eggs referenced by Marks & Spencer, and the launch of a scrambled egg product for use by hotels. The program for 2016 includes industrial rationalization and an acceleration of innovations.
OR: a new market adjustment tool
A new start for egg products
AVRIL — ACTIVITY REPORT 2015
56
Avril Development
A start-up spirit
Adonial and Terrial, champions of industrial ecology, Sopral, an innovator in pet-foods, and Feed Alliance,
a market analysis tool… United in the Avril Development Business Line, they all benefit from
a tailor-made strategic approach.
This line groups all activities that are
intended to grow or move on to alliances in markets that are
distant from Avril’s core business areas.
Its mission is also to be open to experimenting new skills for the Group, such as Proteochem®.
— ÉRIC PHILIPPE
Deputy CEO of the Avril Group
70,000tonnes of industrial waste
recycled by Terrial for methanization and fertilizers
€ 58 m turnover
250,000tonnes of organic fertilizers produced by recycling waste
from Avril’s partner livestock farmers
70,000tonnes of by-products, production
rejects and agrifood surpluses recycled by Adonial, including 35,000 tonnes by Avril’s animal nutrition activities
Feed Alliance
OVERVIEW OF ACTIVITIES
57Sopral, equine dietetics and top-range pet foods
TERRIAL AND ADONIAL, ACTORS IN THE CIRCULAR ECONOMY
The exploitation of natural resources forms part of Avril’s central purpose. Each in its own field, Adonial and Terrial recycle waste so that it can be re-in-jected into the value chain. The aim is to produce better with less, by optimizing flows of materials and energy. Thanks to these two actors, more than 97% of the by-products generated by the Group are processed rather than being buried or incinerated.Adonial exploits production rejects from the agrifood industry (biscuits, semolina, dairy products, sugar, etc.) and by-products such as beetroot pulp or mustard bran that can all be used as raw materials for animal feeds. Its future site, equipped with new technologies such as extrusion, will allow it to opti-
mize certain processes. The company has already developed exchanges with other countries (UK, Germany, Belgium, Spain, Taiwan, etc.) which it hopes to increase in the coming years. The leader in organic fertilizers in France, Terrial recycles both livestock waste and organic waste from industrial activities (such as ash from the Saipol-Lesieur plant in Bassens) for use in compost or methane that will produce fertilizers and energy. Its products can reduce the use of chemical fertilizers and pesticides; 250,000 tonnes are thus produced for arable crops, organic farming, viticulture, market gardening and arboriculture. In 2015, Terrial launched a new range of soil improvers based on organic fertiliz-ers, and will continue in 2016 to develop its organic fertilizer products, the aim being to reach an annual production volume of 30,000 tonnes.
Specialist in nutritional products for horses, dogs and cats that target the general public, in 2015 Sopral achieved 25% of its turnover at export – 60% with pet foods alone – and is present in 50 countries via its specific distribution circuits: online sales, networks of veterinarians, specialist stores and garden centers, etc. The company owns two plants in Rennes; one for equine products and the other for pet foods. Its products group both classic feeds and nutraceuticals. For example, in 2015, Sopral placed two new feed supplements on the market, designed to enhance equine well-being: Hydraction, a dietetic feed supplement to relieve stiffness and soreness as a result of sweating, and Red Booster, an iron-rich solution for use in horses after intense physical exercise.
AVRIL — ACTIVITY REPORT 2015
58
(data in € million)
Turnover EBITDA
Sofiprotéol and its subsidiaries 33.7 18.8
Oilseeds Processing 3,036.6 43.7
Oils & Condiments 1,048.2 55.2
Oleochemicals 618.4 53.2
Animal Nutrition 1,163.1 26.2
Biosecurity & Nutritional Specialties 138.5 3.8
Animal Processing 460.6 0.6
Avril Development 58 5.1
Other 70.2 -0.6
Eliminations -522
Total Group 6,105.3 206
Group 2014 Group 2015
Group net consolidated pro forma income 44 13.5
Equity 1, 837 1, 826.2
Investments 218 186
Of which industrial investments in animal sectors 52 50
Of which industrial investment in oilseeds sectors 86 77Of which investments by Sofiprotéol, the finance and development company 80 37
Of which investments devoted to the Group’s information systems 22
Selected financial data
Financial information
59
SELECTED FINANCIAL DATA
2014 2015
Oilseeds sectorsEdible oils (packaged + bulk) 1 ,180 1 ,164
Soaps 37 37
Sauces 42 42
Oilseed meals (not including specialized crushing) 2,192 2,263
Crushed grain (not including specialized crushing) 4,086 4,278
Biodiesel 2,099 2,005
of which production in France 1,478 1,497
of which international production 621 508
Oleochemical products 532 521
Animal sectorsFeeds produced (not including premixes) 2,647 2,757
Tonnage of pigs slaughtered 93 106
Number of eggs (upstream eggs, shell eggs and egg products) (in millions) 3,013 3,161
Industrial production
(data in thousands of tonnes)
2014 2015
Upstream oilseeds production 34.2 40.4
Upstream livestock production 50 55
Agricultural and agrifood processing and by-products 83.3 89.9
Food products and consumer goods 12.5 15.5
Sustainable innovations, investment funds, other 21.3 22.3
Total commitments 201.3 223.1
Commitments of the finance and development company
(data in € million)
AVRIL — ACTIVITY REPORT 2015
Avril’s activities as seen by 19 employees.
Find out more here:
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We would like to thank all Avril’s employees and partners – agricultural producers, livestock farmers, research scientists, fund-providers – who supported the Group and its achievements in 2015.Published by the Avril Group Communication Division – Responsible Editor: Sébastien Delerue – Editor-in-chief: Tom DoronDesign and production | – Photo credits: Alex Cretey Systermans, Arnaud Février, Fred Gouraud, Cédric Helsly, Urich Lebeuf, Christophe Lepetit, Philippe Montigny, Tristan Paviot, Gwénaël Saliou, Thibaut Voisin. © Avril Group - All rights reserved (May 2016).
This document was printed with vegetable-based inks on paper made using 100% fibers originating from sustainably and equitably managed forests or verified by an Imprim’Vert printer in an ISO 14001 & EMAS certified factory.
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