Better returns for producers, closer links with consumers
Firmly set on the path towards sustainable growth, Axereal is more committed than ever to serving its farmers, its customers and consumers. Despite the numerous disruptions we have faced over the past year (due to the coronavirus crisis, challenging weather and transport strikes), the cooperative model continues to demonstrate its relevance.
As the pace of change accelerates, what are Axereal’s ambitions?
Jean-François Loiseau: The world is changing but our fundamental long-standing vocation, anchored in our strong values, stands firm: the Cooperative will support its 12,700 farmers, all of whom are Axereal co-owners, through each transition as it emerges. This means offering the best possible conditions, equipping our farmers to produce safe grain in quantity, and also making sure they can secure the best returns on their production, both in France and internationally. We should add that there are now various types of agriculture, serving different markets, which is why we need to support our farmers in all the many different ways they operate, whatever these may be.
How do you interpret the results of the 2019-2020 financial year?
Paul-Yves L’Anthoën: We have achieved results in line with our forecasts and our strategy, despite all the problems that the last few months have thrown in our path. As well as additional logistics costs and supply chain disruption caused by the strikes in December and January, the year’s chaotic weather has been very tough for farmers and many have seen disappointing harvest volumes despite exemplary crop management. On top of that of course, the Covid-19 pandemic has had an unprecedented operational and financial impact on our businesses. All this spurs us on to persevere with and indeed accelerate the various projects in place to support farmers in improving the competitiveness of their farms, in line with the path set by our Board of Directors, and to optimise our profitability and operational performance across the cooperative.
We work both locally and globally. We have our very first malting plant to thank for giving us the opportunity to develop internationally, and at the same time we have our27 malting plants across the world to thank for keeping that first malting plant, purchased 25 years ago, in business.
What direction will you be taking over the months and years to come?
Jean-François Loiseau: We have strong convictions about what the Group is about, and what it will be about in the future: Axereal is and will remain a leading agricultural and food industry cooperative, with its sights firmly set on drawing ever closer to the needs of the end consumer. We have plotted our course and we are using our long-term strategy to guide us as we advance, because the Group’s path will be built over time, with and for our members. To help our members make their farms increasingly profitable and sustainable, we are committed to developing a high-performance business model for them. It must be clear and relevant, and our financial partners must understand and support it. There are three focuses to our strategy: striving for performance and excellence, diversifying sources of value creation, and prioritising sustainable growth.
What impact has the pandemic had on the Group's business?
Paul-Yves L’Anthoën: This crisis has obviously hit our Group’s business hard. On the flip side however, it has had the advantage of highlighting to the public at large the importance of our work. Our sector, and particular its channel structure, has proved vital in securing the food supply in France and much further afield. Thanks to a collective effort and ground-breaking cooperation between all the links in the chain, we have been able to reorganise all the processing and distribution networks in record time. As a cooperative, we have risen to the challenge brilliantly. By continuing to work despite the difficult conditions, our farmers have ensured that agricultural production will continue uninterrupted next year. We are proud to see that, across all our businesses, all customer orders have been honoured during the crisis. We must thank all our staff who, working on the front line, have stepped up to achieve this performance. By their commitment and sense of service, they have enabled Axereal to play its full role within the food chain. This is proof of the resourcefulness of our teams. In this very difficult situation, they have demonstrated their agility and ability to react quickly..
How is this strategy put into practice?
Jean-François Loiseau: Axereal has both a local focus – we are committed to developing short, local supply chains on a large scale – and an all-important international reach. Being able to make the most of all the opportunities available to us, in particular abroad, is a strength which enables us to generate greater value for our farmers in France. Indeed, there are growth levers available to us outside the country, and we must not hesitate to use them. In this vein, the purchase of Cargill’s malting business is a good example of coherent growth for the Group. Thanks
to their hard work and commitment, our staff have made a genuine success of this operation, which was a major milestone for Axereal. Boortmalt, our malting subsidiary, is now the world’s leading processor of malting barley. It has almost tripled in size, and added a considerable number of sites, but the business has maintained its philosophy and its close links with its customers. The markets malting serves are in growth, and it offers the perfect outlet for the crops our farmers are producing. Consequently, it is a considerable source of value creation and financial stability for the Group. And that means more resilience, and another step forward in our efforts to bring farming, our customers and consumers closer together.
Changing consumer expectations, repeated weather incidents and regulatory developments confirm that we are on the right strategic path. We are accelerating our changes to the agricultural and food model, to bring our farmers the best possible income from their crops.
How is it looking for your operational performance and sustainable development objectives?
Paul-Yves L’Anthoën: First of all we are going to continue pushing forward with our digital transformation. Making this shift is essential to our cooperative members’ competitiveness and efficiency. Obviously, that means ramping up our e-commerce platform for farmers, but that’s not the full story. Our digital transformation will entail a complete restructuring and wide-reaching digitalisation of our processes and our relations with our farmers, and we’re starting now. We are also going to continue our efforts to boost our profitability, with a focus on sustainable growth. We have clearly set out our platform: we aim to make what we see as premium products today into the standard products of tomorrow. We are already accelerating our transition to maintain our sector-leading momentum, with sustainable channels, high environmental value (HVE), low-carbon production and new-generation grain storage. Thanks to the progress we are making, we are well on track to achieve our ambition of originating a million tonnes of grain from traceable channels by 2022 with the support of our CultivUp initiative.
How does the Group’s governance constitute an asset looking forward?
Jean-François Loiseau: One distinctive feature of our cooperative is the way the Executive Committee, the Board of Directors and the Regional Councils all share a single vision. Our aligned ambitions give us the strength and stability to progress by pursuing our shared plan for the future. It is also important to mention the work we are doing with our young people, because the future of farming is in their hands. Each year, we offer a tailored support programme for young farmers. We have also created a course of study in partnership with Paris Dauphine University to equip our future administrators with the skills and knowledge they will need. This year, four of them have joined the Board of Directors as trainees. Succession planning is key to the long-term viability of the cooperative model.
Our choices, our commitments
CultivUp, our sustainable agriculture strategy
To optimise the solutions we offer our clients, in time for the 2018 harvest we are developing a production charter encompassing a vision of sustainability shared by our industrial customers.