Dutch agricultural cooperative Agrifirm, strong in feed production, reported a net profit of €10 million in 2011, which is a decline of €14 million in comparison to the previous year. The organisation describes 2011 as ‘a two-faced year’.
The decline is for the most part due to more competitive pricing by Agrifirm’s member companies Agrifirm Feed and Agrifirm Plant and due to lower results realised by minority participations. Agrifirm’s other subsidiaries in the Netherlands and abroad achieved higher results.
Through means of greater innovative strength, lower operating costs and more competitive procurement conditions, Agrifirm created benefits for its members via the Agrifirm Feed and Agrifirm Plant member companies. These benefits were directly passed on to the members of the cooperative in the form of better conditions (price and customer discounts).
“We are satisfied with this state of affairs. The merger is producing the results we expected. Our customers and our employees are seeing the benefits. I expect that we can continue to further expand this success in our core activities,” says Ton Loman, chairman of the executive board.
Agrifirm’s revenue in 2011 rose to €2.3 billion (2010: €2.0 billion). This increase is to an important extent due to the higher prices of raw materials for livestock feeds, grains and artificial fertilisers.
For Agrifirm, the increase in prices represented a sharp increase in the cost of working capital and interest expenses increased by €4 million.
The result realised by the minority participations collectively was €8 million lower than in 2010.
As a result of the merger, the number of employees that left the organisation in 2011 was higher than planned. Some of these employees were not replaced. The additional savings were offset by higher restructuring costs.
Agrifirm is optimistic about the future. “Of course we are not satisfied with the decline in profits in 2011. But when you analyse things properly, you will see that we are perfectly on track with our core activities,” said Loman.
He points to the many innovations that Agrifirm brings to market in the Netherlands and beyond. “This makes our customers successful and grows our market share. I can see from the market and from our people that we are pursuing the right course. We will continue on that course in 2012. The results of our customers and members are a priority in this respect.”