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Driving Sustainable Growth is Nutreco's Aim for 2016

by 5m Editor
22 November 2011, at 6:45am

NETHERLANDS - Nutreco, a global company in animal nutrition and fish feed, has announced its Strategy Update for the coming five years, which has the theme 'Ambition 2016 – driving sustainable growth'.

Nutreco's ambition further builds on the existing strategy to grow and improve profitability by innovative and sustainable applications for its customers. This, it says, will be realised by focusing on premix, feed specialties and fish feed and by expanding into the growth regions of Latin America, Russia, China and South East Asia, which will see the greatest increases in both production and consumption of animal protein food products.

Key elements of the strategy are:

  • increase of EBITA (operating result before amortisation of goodwill) to €400 million in 2016
  • establishment of Application and Solution Centre (ASC) for Europe in the Netherlands
  • More than half of EBITA of premix and feed specialties from growth regions in 2016
  • further growth in markets for non-salmonid species to a share of 45 per cent of fish feed revenues in 2016
  • EBITA margin guidance for fish feed increased from six per cent to seven per cent and EBITA margin for premix and feed specialties will, over time, outperform current guidance of seven per cent, resulting in an overall EBITA margin improvement to five to six per cent, and
  • Nutreco's solid balance sheet accomodates this growth strategy.

Update for 2011

The outlook for 2011 EBITA before exceptional items of current business is at least €230 million. The sale of Hendrix compound feed operations to ForFarmers is to go ahead [click here for more information], forming a long-term strategic partnership with ForFarmers and the second phase of investment is to be made in extra production capacity of the fish feed plant in Averøy Norway, totalling €66 million.

Doubling food production, while halving the footprint

In October this year, the United Nations announced the global population is now seven billion. It was a sharp reminder of the task ahead for everyone occupied in producing food: how to feed nine billion people sustainably by 2050. Rising incomes in the growth regions of Latin America, Russia, China and South East Asia add to the challenge as people switch to protein rich foods such as meat, fish, milk and eggs. The production of such food products in these regions will increase in line with demand.

Globally, animal protein consumption is expected to reach 465 million tonnes of meat and more than one billion tonnes of milk by 2050. These trends place Nutreco at an essential link in the feed-to-food value chain. The expertise of Nutreco is to convert low value raw materials into safe, nutritious feed for animals and to develop models and management insights that enable farmers to be more productive while reducing environmental impact. The drive to greater efficiency in feeds, with attention to ecology and to the economics of farming, is inherent in the name Nutreco. Chosen in 1994 when the company was formed, it stands for nutrition, ecology and economy.

Recently Nutreco refined its focus into three words: Feeding the Future. This is the essence of Nutreco, addressing the challenge of feeding the world sustainably in 2050. We organise international Agri Vision and AquaVision conferences each year, bringing multiple stakeholders together to discuss challenges and opportunities in agriculture and aquaculture. Its world-class R&D teams uncover new knowledge and concepts to raise productivity sustainably. Specialists commercialise them and take them to market. Throughout, sustainability is a priority. We need to double food production and do so sustainably: doubling production while halving the footprint.

Speaking last week, Wout Dekker, CEO of Nutreco, commented: "Nutreco has the ambition to become the global leader in animal nutrition and fish feed delivering innovative and sustainable nutritional solutions. By innovating and applying our knowledge of feed ingredients and nutritional solutions for animals and fish, we want to create value for all our stakeholders.

"Today, we announced that Nutreco and ForFarmers have entered into an agreement on the intended sale of Hendrix to ForFarmers. As part of the transaction, Nutreco and ForFarmers have entered into a long term strategic partnership, including a know-how agreement. Completion of the deal is expected in the first quarter of 2012.

"We are confident of delivering on our target to double the 2006 EBITA of our current business to at least EUR 230 million in 2011. Today, we announce our strategic ambition for the coming five years which is expected to result in a further increase of EBITA to EUR 400 million in 2016.

"Our strategy for animal nutrition will be enabled by our Application and Solution Centre (ASC) in Canada as well as the establishment of a new European ASC in the Netherlands in the first quarter of 2012. The ASCs will link our nutritional and technical know-how and innovation power in serving our customers' needs. We will focus on the growth of our premix and feed specialties business by expanding our presence in growth geographies.

"Skretting, Nutreco's global brand for fish feed, will further capitalise on its leading fish feed positions and on the know-how of Skretting Aquaculture Research Centre for innovative and sustainable feed solutions. The portfolio of activities will be further expanded into new geographies and feed for other fish species and shrimp," concluded Mr Dekker.