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Dairy Young Animal Feeds Willem Kernkamp – GM Sloten Group Nutreco Capital Markets Day 2013 Derbyshire, UK | 17 September 2013
Dairy Young Animal Feeds
Willem Kernkamp – GM Sloten GroupNutreco Capital Markets Day 2013Derbyshire, UK | 17 September 2013
Introduction
Market
Strategy
Summary
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Introduction
Sloten – Leading in young animal nutrition
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Branded Dairy Young Animal Feeds
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Complete production process
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Innovation
MarketingWorldwidedistribution
network
Business focus
Market
IFCN, 2012; for India: FAOSTAT
360 mio dairy cows at 144 mio farms
12 mio head
40 mio head
222 mio head
40 mio head
6 mio head
40mio head
Worldwide average: < 3 cows/farmCow number ~ 0 ‐ 1 % per yearFarm number ~ ‐[2‐10]% per yearIFCN estimates 330,000 farms > 100 cows
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USA
Brazil Ethiopia
India
Netherlands
Russia
1996 2011
1996 2011
1996 2011
1996 2011
1996 2011
1996 2011
9,169 L/cow
393 L/cow
8,663 L/cow
1,361 L/cow
3361 L/cow
1,169 L/cow
Sources: IFCN, 2012; for India: FAOSTAT
Diversity in farm management capabilities
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Diversity …
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Diversity …
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Current market of rearing milk replacers for
calves is estimated to be 700 Kt/year.
The potential accessible market is
estimated around 1,400 Kt/year.
Sloten’s worldwide market share of rearing
milk replacers = ~ 7 %
Key market figures
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Sloten competes with:
• the cow (~ 60% of the potential market)
• +/-125 rearing calf milk replacer competitors worldwide:1. Dairy industry: ~ 200 Kt/yr2. Veal industry: ~ 90 Kt/yr3. Milk replacer specialists (spray dryers): ~ 330 Kt/yr4. Mixers (mainly premix companies): ~ 80 Kt/yr
Rearing milk replacer market
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Dairy raw material market
Milk is usually consumed locally.NZ, US, NW-EU largest exporters. Asia, specifically China largest importer. 5-7% is traded in solid forms on world market.
Many factors influence surpluses/deficits creating volatility in raw material costs.
+ 40% in 12 weeks
-20% in 3 weeks
The answer to high volatility in raw material costs has been:
Increase market intelligenceShort positions and weighted stocksEffective demand planning and S&OPMarket driven pricing processValue creation for end users
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Strategy
Today’s calves are tomorrow’s dairy cows
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Life Start sets Life Performance
Best Life Start one only gets
• with excellent early nutrition
• when the calf is never sick
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Best Life StartMaximum development of body tissues (udder cells, all organs) and body systems (immune and digestive system)
A better Life Start is value for farmers
Best Life Performance100 g/day more youth growth = 700 litresmore milk and 50% lower culling rate in the first lactationFull expression of genetic potentialIncreased sustainability of farming
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PRODUCT / VALUE PROPOSITION
MARKETS / SEGMENTS
Actual
40 50 kg per calf= +20 % growth potential
Substitution of cow’s milk= +60% growth potential
Competing in current markets (worldwide market share ~7%) = +93% growth potential
New
The concept is value for Nutreco
Actual New21
Active worldwide …
Active in 55 countries. Network of dealers.Focus on 17 countries: GE, NL, BE, DK, UK, ES, IT, PO, HU, NO, RU, BR, CN, MX, CL, CO, NZ. 65% of our milk replacers sold in EU‐27.
Active in 55 countries. Network of dealers.Focus on 17 countries: GE, NL, BE, DK, UK, ES, IT, PO, HU, NO, RU, BR, CN, MX, CL, CO, NZ. 65% of our milk replacers sold in EU‐27.
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Roadmap 2010 - 2015”: “We must scale up to higher volumes,
capitalise on capabilities and meet P&FS EBITA margins of >7%”
Improve marketing: further definition of customer segments and demands, use
of new techniques (media, means, tools) additional to personal sales method.
Develop “content marketing” to influence end-users and shorten time to market
Align distributors and capture growth
Drive innovations / the “Calf Proposition”; create value for farmers
Set-up new production units in high import tax and/or low raw material cost
countries like Russia, …
Scale up further through M&A to capitalise on our capabilities
Strategy Plan 2010-2015 summarised
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Summary
Summary
The company, products and value proposition have perceived high quality
The innovative concept “Life Start sets Life Performance” drives growth
Market potential big enough for lasting growth
Distribution management and marketing on end users to reduce time to
market
Quality of strategy, organisation and distribution channel shown in results
even in the volatile markets we work in
EBITA nearly tripled
% EBITA/Sales well above target 7 % (in 2012 and 2013)
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THANK YOU
