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Horizon 2020 is the programme ForFarmers established to determine the strategic course for the coming years. With this strategy, ForFarmers intends to strengthen the organisation and to realise its ambitions: to be the leading feed company in Europe and the bordering regions (Europe+) and to be the Total Feed partner for the farmer. In the past year the company took some important steps towards the realisation of its objectives.

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ForFarmers has the ambition of being the leading feed company in Europe+ by offering a complete range of innovative feed solutions which are in line with the objectives and business circumstances of farmers. ForFarmers supplies commercially profitable and sustainable products and services that support farmers in realising their business objectives in the area of profitability, food safety and technical performance. In this way the company creates value for the customer.

Sustainability: integral part of business operations

Considering its position in the value chain, the feed industry has an important role in solving sustainability issues in the production process of meat, eggs and dairy products. Sustainability is therefore an integral and clear element of the business operations of ForFarmers. This applies to the utilisation of scarce raw materials, the environmental impact and animal health and welfare. ForFarmers further sharpened its sustainability strategy in 2015. It is the company’s ambition to be the leader in sustainability in the feed industry, particularly in the use of raw materials, production, logistics and efficient and/or more animal friendly feed concepts.

Strong starting position

Apart from a healthy financial basis and good market positions, ForFarmers has a number of strong starting points which it can further build upon. The company has ample knowledge, experience and innovative capacity and continuously carries out innovation programmes to improve existing products and to introduce new products and concepts to the market. This takes place under the auspices of the Nutrition Innovation Centre (NIC) that focuses on amongst other things, improvement of feed performance – e.g. in terms of animal growth and feed efficiency, animal health and further sustainability of ForFarmers products and livestock farming.

To maintain and further expand this solid starting position, the company has introduced the concept of “One ForFarmers”. This forms an important pillar in the implementation of the Horizon 2020 strategy. One ForFarmers aims to optimise the exchange and use of internal knowledge, a further professionalisation of the organisation, an unambiguous way of working and the optimal leverage of economies of scale. In this context systems and processes are, where possible, standardised in all the Business Units of ForFarmers.

Training and development of employees is also an important component of Horizon 2020. Through training, ForFarmers empowers employees to develop themselves in order to continue complying with ever-changing requirements in terms of knowledge and competencies and to become the best in their trade.

Total Feed Business

A crucial element of Horizon 2020 is the Total Feed approach. To meet the demand of livestock farmers in the best way possible, ForFarmers offers integrated solutions consisting of (feed) products, advice and tools 

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to support the business objectives of customers and to monitor their results. Through this approach, ForFarmers can harmonise its products and advice throughout the entire production cycle on the farm. In this way customers are offered a total solution, in line with their feeding system and their business circumstances. This demonstrably results in a better return and technical performance.
For some specific products - like premixes, specialities, additives and seeds - ForFarmers works with strategic partners that have specialised in these products.

Four key objectives

In the Horizon 2020 strategy, ForFarmers focuses on four key objectives: focus on attractive segments, partnership and the Total Feed-portfolio, acquisitions and One ForFarmers

Focus on attractive segments

ForFarmers gears its nutritional advice and the product and services portfolio to the scope and development phase of its customers. For instance, large agricultural businesses with many staff members or companies that apply highly sophisticated technologies have different needs in the area of products and advice than small-scale companies or companies that focus on a niche market. To serve these different groups of customers in the most efficient manner, customer segmentation is an important component of the market approach. This customer segmentation is implemented in all countries and this process is on track. A good customer relationship management system is indispensable for this market and customer approach. SAP CRM has been selected as the system to support this element of the strategy. The rollout started in the United Kingdom in December 2015; the other countries follow in 2016. In addition, substance was given to the marketing organisation of ForFarmers; a marketing strategy and an implementation plan per country were prepared for the ruminant and swine sectors; it will be sharpened for the poultry sector in 2016.

Partnership and Total Feed portfolio

To support customers in the best way, the Total Feed approach has a central position in the strategy. For instance, the strategic international partnership with Nutreco has borne fruit. Within this cooperation, knowledge in the area of micro-ingredients is shared and important economies of scale are realised through the combined purchase of these products. In the area of research, forces are joined with Nutreco, with the production of a new piglet feed concept as the first tangible result. This was developed in close cooperation with Trouw Nutrition, a subsidiary of Nutreco. In October 2015, this concept was launched simultaneously in all four countries under the brand-name “VIDA”. Health, feed intake and growth potential are the most important objectives for VIDA. A growing number of swine farmers are already using VIDA in a highly successful manner.

The strategic cooperation of the "Plant" Department of ForFarmers with Agrifirm, aimed at the purchase of fertilisers, seeds and crop protection products for the Dutch market is proceeding according to plan. The first deliveries to ForFarmers dealers in the Netherlands have already taken place, allowing dealers to distribute these products.
Since the acquisition of the agricultural activities of Countrywide Farmers in May 2015, ForFarmers has also acquired a position in the fertiliser and forage sector in the United Kingdom. A European strategy is now being formulated in order to further strengthen ForFarmers position in this sector.

In the Netherlands, work is underway to establish one point of contact that customers can rely on for all Total Feed products and applications. To this end, the customer service teams of ForFarmers in the Netherlands and the commercial teams of ForFarmers DML will enhance their co-operation. This is expected to result in better service to customers, in addition to enhanced synergies and efficiencies internally.

Acquisitions

The focus on attractive segments, strategic partnerships and the Total Feed Business are the pillars of like-for-like growth for ForFarmers. In addition, ForFarmers aims to have a number 1 or number 2 position in all regions where it is active. As a consequence, better operational efficiency can be attained. In markets where ForFarmers does not have this position yet, or where the company is not yet active, acquisitions can be a means to grow. Smaller acquisitions in existing regions to strengthen the portfolio in specific areas are also being carefully examined.

ForFarmers focuses on acquisition possibilities in the four key countries as well as in new regions within or bordering Europe (Europe+). The most recent acquisitions of HST Feeds Ltd. (2014), Wheyfeed Holdings Ltd. (2014), and the agricultural activities of Countrywide Farmers (2015) have already been fully integrated into ForFarmers UK.

One ForFarmers

The rollout of One ForFarmers continued in 2015. This approach is aimed at the exchange and use of internal knowledge, a further professionalisation of the organisation, an unambiguous way of working and the optimal utilisation of economies of scale. This has resulted in the following important achievements through all layers of the organisation:

• The rebranding to the ForFarmers brand continued and was completed in 2015 in all countries.
• The new matrix organisation was set up and is operating as expected.
• The Group Formulation and Purchasing Department was as a first step combined into one team on the continent, which ensures concentration of knowledge and experience.
• Investments were made in logistics systems and in new bulk lorries, in particular for the United Kingdom. In this way feed can be delivered in a safer and more efficient manner than with the “tipper” vehicles that were used more commonly there. 
• In Exeter (United Kingdom) the construction of a new production facility is underway to replace the current factory. The new factory will have a production capacity of 300,000 tons – a doubling of the current tonnage – and will comply with very high requirements in the area of food safety, personnel wellbeing and energy consumption. The project requires an investment of £10 million. This project is expected to be completed at the beginning of 2017.
• Company-wide Health & Safety standards have been tightened which has created a higher safety awareness amongst employees and consequently an increase in the number of near-miss notifications. This has been demonstrated to contribute to a reduction in the number of actual accidents. In 2016 there will be continued focus and attention on safety at work both at ForFarmers locations and on farm.
• In 2016, business processes and IT and Finance systems will be further standardised. The IT Infrastructure Plan that was prepared for this purpose was approved at the end of 2015.

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Result areas Horizon 2020

By focusing on the indicated four strategic cornerstones ForFarmers is able to actively strengthen its position in the chain: closer cooperation with customers and strategic partners in the supply industries leads to a bigger share of the total feed portfolio used by customers. This translates into specific results for the various stakeholders of ForFarmers.

People development

The implementation of Horizon 2020 means that the opportunities and scope for development increase for the employees of ForFarmers. ForFarmers invests in the professional and personal development of employees. The milestones of this financial year include:

• This year, four groups of employees started with Management Development Programmes. A first pilot of the Management Foundation Programme for managers started in Germany. This programme is organised locally and focuses on the steering and development of employees, which strengthens the implementation of Horizon 2020 within the organisation.
• The ambitions as formulated in Horizon 2020 also bring new opportunities and perspectives for employees. In 2015 this resulted in different roles and promotions of a large number of employees throughout all disciplines. For instance, vacancies in the senior management team were almost completely filled through a combination of internal (international) promotions and external recruitment.
• In 2015 an employee participation scheme was introduced company-wide. Approximately 20% of the employees have made use of this.
• In the Netherlands a new remuneration structure was implemented for the Sales Department.

More information about the HR policy and developments in this area are included in the Human Resources section.

Total nutrition solutions

The close cooperation with strategic partners gives specific substance to the transformation towards a Total Feed approach. This means that customers have a wide assortment of innovative solutions at their disposal that they can use according to their business objective.

ForFarmers offers products and concepts for this varying from a ‘basic product’ to highly advanced and integrated feed solutions. In addition the marketing strategies of the different species prepared this year centre on the maximisation of the return of the customer, regardless of the feeding system at the relevant business. Examples are:

• The product portfolio was expanded and standardised through strategic partnerships. For instance VIDA – a completely new piglet feed concept – was developend and introduced with Nutreco in the four countries where ForFarmers is active. In addition, ForFarmers developed and introduced  - together with its project partners - the fermentation concept for pigs under the name Ferment+. Both projects enable customers to use the combined knowledge offered by ForFarmers and its partners in their own business.

• The share of specialties grew considerably thanks to the increased sale of calf milk and the launch of VIDA.
• Feed2Milk is the name for the dairy cattle approach of ForFarmers based on the combined knowledge of several countries; main objective is to create optimal customer value.

Best in industry profits

The operating result excluding incidental items increased by 8.1% to € 64.4 million. As a percentage of the gross profit this is 15.2%, which means a slight increase compared to 2014. The earnings per share increased from € 0.455 in 2014 to € 0.479 in 2015 (+5.3%). The dividend proposal over 2015 amounts to € 0.23299 (2014: € 0.17629) compared with a price of the depositary receipts on 31 December 2015 of € 5.30, which implies a dividend return of 4.4% (2014: 4.7%).

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