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ACTIVITY
REPORT
2016
CONTENTS
2 • Profile 4 • A Group with a sectoral structure
6 • Joint interview with Jean-Philippe Puig and Arnaud Rousseau
8 • Governance 12 • Financial performance
13 • Key figures
18 • Avril’s challenges
20 • Avril 2020: change to enhance our commitment
22 • A strong and competitive Group in its markets that listens to customers
26 • A resolutely international Group set to conquer new markets
30 • Innovation to drive the creation of sustainable value
34 • People committed to serving a federative company project
40 • Sofiprotéol 46 • Oilseeds Processing
52 • Oils & Condiments 60 • Oleochemicals 64 • Animal nutrition
68 • Avril Animal Specialties
72 • Animal precessing 78 • Avril Development
82 • Financial informations
OVERVIEW OF
ACTIVITIES
INTRODUCTION
2016
ESSENTIALS
AVR IL — ACTIVITY REPORT 2016
Avril,
a collective dynamic
7,200employees
€5.9Bn
turnover in 2016
21countries
OUR MISSION
Creating sustainable value in the oils and proteins sectors,
thus contributing to better food for humans and preservation
of the planet.
OUR ORIGINALITY
The Avril Group was born of a collective approach. It was
set up in 1983 at the initiative of farmers in order to develop
the French production of oilseeds (rapeseed, sunflower,
olive, soybean, etc.) and protein crops (pea, field bean, lupin,
etc.). By federating all actors in these sectors and developing
their markets, in a little more than 30 years Avril has become
a major industrial and finance group, active in France and
internationally in sectors as diverse as agri-foods, livestock
nutrition and expertise or renewable energies and chemistry,
owning a portfolio of market brand leaders such as Sanders,
Lesieur, Puget, Matines, Diester®
, Bunica, Taous…
The Group has grown, and still operates, according to
an original model: a sectoral organization, from grain to
processed products, where each activity creates value for
all links in the chain. To drive this model, Avril builds on the
complementarity of its two core skills: industrial activities
organized around plants and animals, and investments
through Sofiprotéol, its finance and development arm.
The originality of this model thus makes Avril a singular
Group characterized by a well-established shareholder base,
strong agricultural and territorial roots and the systematic
reinvestment of all profits in the development of national
sectors in all the countries in which it operates.
NEARLY ONE THIRD OF TURNOVER
ACHIEVED INTERNATIONALLY IN 2016
2 3
GLOBAL BREAKDOWN
OF EMPLOYEES IN 2016
STRONG TERRITORIAL
ROOTS IN FRANCE
1%
Americas
15%
Africa
3%
Asia
Industrial sites Commercial offices
81%
Europe
84sites in the world of which:
29 sites in oilseed sectors
55 sites in animal sectors
44
sites in animal
sectors
15
sites in oilseed
sectors Réunion
Island
AGroupwitha
sectoralstructure,
fromgraintothe
processedproduct
Avril draws strength from its original sectoral
organization that combines the excellence
of French agriculture and industry.
This organization was set up in the early 1980s, in response
to a US embargo on soybean exports and emerging proof of
the dependence of our agriculture with respect to vegetable
proteins. Rapeseed producers thus mobilized their forces to
set up a French oilseeds and proteins sector that could restore
the country’s independence. Farmers from all French regions,
working through Sofiprotéol, thus contributed to the
construction of an industrial and finance group that could
assure long-term and sustainable markets for their harvests.
Avril was born.
Through this exemplary commitment, they created conditions
for the emergence of new opportunities to valorize their
products, such as rapeseed for biodiesel, an innovation
initiated by French agriculture. Thanks to this renewable
energy, called Diester®
, the rapeseed meals cultivated
throughout France now represent one of the principal sources
of proteins for livestock farms. And thanks to their pioneering
and entrepreneurial vision, they built a model centered on
creating shared value for all actors in the sector – all closely
intertwined throughout French territories and beyond,
in all the countries where the Group operates. From grain
to processed products, from human foods to livestock feeds,
and not forgetting expertise in livestock management,
renewable energies and plant chemistry.
Collection of oilseed
and protein grains
Involvement of Sofiprotéol,
finance and development company
Seeds, biotechnology;
other inputs and services
100,000
agricultural
producers
Crushing
Food
Food
Renewable
energies
Animal
nutrition,
Biosecurity
Proteochem®
GB_AVRIL_radd_170x240_rabat_BAT.indd R2-4GB_AVRIL_radd_170x240_rabat_BAT.indd R2-4 15/06/2017 12:4815/06/2017 12:48
Collection of oilseed
and protein grains
Involvement of Sofiprotéol,
finance and development company
Seeds, biotechnology;
other inputs and services
100,000
agricultural
producers
Crushing
Food
Food
Renewable
energies
Animal
nutrition,
Biosecurity
Proteochem®
GB_AVRIL_radd_170x240_rabat_BAT.indd R2-4GB_AVRIL_radd_170x240_rabat_BAT.indd R2-4 15/06/2017 12:4815/06/2017 12:48
Genetics and animal
health, other inputs
and services
Oleochemicals
Milk, meat
Poultry
Livestock
farmers
Eggs, pork
GB_AVRIL_ra_170x240_BAT.indd 5GB_AVRIL_ra_170x240_BAT.indd 5 15/06/2017 12:4215/06/2017 12:42
AVR IL — ACTIVITY REPORT 2016
What is your assessment of 2016?
A. ROUSSEAU: For the second year running,
Avril had to deal with a difficult economic context.
The convergence of several factors unfavorable to
its primary activities damaged its results: the collapse
of petroleum prices, poor rapeseed harvests, very low
milk prices and changes affecting customer demand
for shell eggs.
J.-P. PUIG: In this context, some of our entities
nevertheless managed to break records for growth,
such as Sofiprotéol, Bunica, Abera, Sopral and Terrial.
Despite a downturn in income we held our course,
investing more than in 2015. We also pursued our
recruitment plan: 200 new managers in 2016, 20%
of them arising from internal mobility.
You changed the Group’s organization; for what
purpose?
J.-P. PUIG: Our aim was to simplify our managerial
organization and broaden the scope of the Comex
so that our decision-making could be more rapid and
operational managers could react accordingly. This has
been a success. Our Group is still in its consolidation
phase, and this year saw further structural advances
in the implementation of common management tools
and the modernization of our information systems.
All these projects take time. 2017 should mark a real
turning point in this respect.
What is your assessment just a year after
launching the Avril 2020 strategic plan?
J.-P. PUIG: We made progress in all areas.
By improving our cost structure, we achieved
further savings. Another reason for satisfaction
was the improvement in our customer relations,
Guided by its new strategic plan, Avril is pursuing its transformation
in a difficult economic context. The structural advances achieved in 2016 have
laid future foundations for a Group that remains loyal to its mission.
A critical analysis by Jean-Philippe Puig, CEO of Avril, and Arnaud Rousseau,
Chairman of Avril Gestion.
JEAN-PHILIPPE PUIG
CEO of Avril
We have enhanced
our relations with
customers and
developed partnerships
that will allow us to
better exploit the
advantages of our
sectoral organization.
Combining resilience
and long-term vision
6 7
with partnerships enabling us to better valorize our
know-how. I would mention two initiatives whose
success exceeded our expectations: the high-quality
pork sector developed with Fleury Michon, and the
joint enterprise with AVF which means that Avril is
now making an active contribution to ensuring
that French pork will return to our supermarket
shelves. We also made progress in developing our
international activities, with some important projects
offering real opportunities for the future. We
now aim to further accelerate efforts in this area.
A. ROUSSEAU: Avril and our sector were also very
active in terms of innovation. The Group’s approach
was particularly audacious in proteins, developing
real market opportunities for agricultural producers.
The birth of Evertree in Proteochem®
(protein
chemistry) is a good illustration, and there are also
interesting prospects in foods. Our crops that supply
vegetable proteins have a key role to play in our
future diet.
How have Avril’s employees felt about this
period of transformation?
J.-P. PUIG: I would like to extend my thanks to
all our colleagues who have invested so much energy
in these efforts over the year. The success of the
employee shareholder plan, launched in 2016,
testifies to their commitment and demonstrates
the trust our teams have in the future. We also set
up a Comex for young people which offers us a very
interesting viewpoint, working notably on topics such
as the digital revolution or the organization of work
at the future Avril Campus, which will open in July
2018 in Bruz, near Rennes. In my opinion, this is
highly symbolic of Avril’s identity: an innovative,
sustainable and open-minded group which welcomes
the views of its teams and maintains close links with
the farming world.
How is 2017 looking?
A. ROUSSEAU: 2017 will be a turning point with
some important milestones, notably regarding the
future of the biodiesel market. We remain confident
because we benefit from some major advantages.
Working together, we shall be able to exploit
the pertinence of our approach and the strength
of our sectoral model in support of France’s farm.
J.-P. PUIG: This year has started much better.
Thanks to the stabilization of crude oil prices, our
biodiesel activities have resumed growth. We are
pursuing our development and transformation, with
three priorities for 2017: 1. Security; 2. Customers;
3. Economic performance.
Avril Gestion has a new Chairman. What will his
role be?
A. ROUSSEAU: Loyal to the legacy of Xavier Beulin,
with all the Administrators and in continuity of the
Avril 2020 plan, my mission is to support the Group’s
main strategic orientations. And in line with the
principles that guided its creation, to cultivate the
strong links that federate farmers in our sectors and
Avril’s talents around common plans for the future,
which have already demonstrated that in an open
economy and in direct response to market fluctuations,
there is strength in unity that can broaden the scope
for opportunities. I also want to emphasize the value
and transmit to new generations the highly original
nature of Avril, its agricultural roots and its mission
to act in the interests of all.
Working together, we shall be
able to exploit the pertinence
of our approach and the
strength of our sectoral model
in support of France’s farm.
ARNAUD ROUSSEAU
Chairman of Avril Gestion
AVR IL — ACTIVITY REPORT 2016
7 BUSINESS LINES
OILSEEDS
PROCESSING
ANIMAL
NUTRITION
AVRIL ANIMAL
SPECIALTIES
ANIMAL
PROCESSING
OLEOCHEMICALS
AVRIL
DEVELOPMENT
TERRES UNIVIA
FIDOP
EMPLOYEES
FOP
OILS &
CONDIMENTS
Collegial governance
with strong agricultural
roots
XAVIER BEULIN, AN IMPORTANT
LEADER IN AGRICULTURE
Xavier Beulin died suddenly on 19 February 2017,
at the age of just 58 years. He had been Chairman
of the Avril Group since 2000. Involved from an early
age in agricultural unionism, he steadily climbed the
ladder to become Chairman of the FOP in 1999,
and then of the FNSEA. We remember a profoundly
committed man, a lover of the land and a visionary,
who worked unceasingly to develop French farming.
He was a central driving force behind the Avril Group,
giving it the stature of a national leader.
The Board
GOVERNANCE FORGED
FOR THE FUTURE
In 2015, Avril equipped itself with a new governance
structure and the status of a limited partnership with
share capital (Société en Commandite par Actions, SCA).
This structure can separate the power of shareholders
(the limited partners or associés commanditaires which
include the FIDOP(3)
, FOP(4)
and the Fondation Avril,
recognized as a public utility) from that of the
manager (Avril Gestion, the general partner or associé
commandité). This helps to ensure that the founder
shareholders in the Group remain central to its growth
strategy. The partners work through a Supervisory
Board with eight members, who include two staff
representatives from the Avril Group, elected by their
peers. This Board is chaired by Antoine Henrion, who
is also Chairman of Terres Univia(5)
. The Board of Avril
Gestion appoints the manager of the SCA and decides
upon the major strategic and financial orientations of
the Avril Group. This Board comprises nine members:
four from the FOP, three qualified personalities and
two former CEOs or corporate officers of the Group.
In February 2017, the Officers of Avril Gestion elected
Arnaud Rousseau to serve as the Chairman of its Board.
(1) Agropol: Interprofessional Association for Promotion and International
Cooperation of the French Vegetable Oils and Proteins Sector.
(2) Terres Inovia: Technical Institute for Oilseed Crops, Grain Legumes and
Industrial Hemp.
(3) FIDOP: Interprofessional Development Fund for the Oilseeds and Proteins
Sector.
(4) FOP: French Federation of Oilseed and Protein Crop Producers.
(5) Terres Univia: Interprofessional organization for oilseeds and protein crops.
8 9
BERNARD DE VERNEUIL
Member of the Board and
Administrator of the FOP
PIERRE PRINGUET
Vice-Chairman of Pernod Ricard
ARNAUD ROUSSEAU
Chairman of Avril Gestion,
Chairman of the FOP
JEAN-PIERRE DENIS
Chairman of Crédit Mutuel Arkea
and Crédit Mutuel de Bretagne
SÉBASTIEN WINDSOR
Vice-Chairman of the FOP
and Chairman of Terres Inovia(2)
SYLVIE RUCAR
Consultant
GÉRARD TUBÉRY
Chairman of Agropol(1)
ANNE LAUVERGEON
CEO of ALP Services
and Chair of Sigfox
ALAIN MIROT
Former CFO of Sofiprotéol
AVR IL — ACTIVITY REPORT 2016
1 - PAUL-JOËL DERIAN
Research, Innovation, Development
Vice-President (VPRID)
2 - PHILIPPE LAMBLIN
Human Resources Vice-President
(VPHR)
3 - STÉPHANE YRLÈS
General Secretary
4 - YVES DELAINE
Deputy CEO
5 - BERNARD MAHÉ
General Manager of the Animal
nutrition Business Line
6 - MOUSSA NACIRI
General Manager of the Oleochemicals
Business Line
7 - MICHEL BOUCLY
Deputy CEO
2
51
74
63
The Executive
Committee
10 11
8 - JEAN-PHILIPPE PUIG
Chairman and Executive Officier (CEO)
9 - OLIVIER DELAMÉA
General Manager of the
Oils & Condiments Business Line
138
12109
11
10 - JEAN-BAPTISTE
BACHELERIE
General Manager of the Oilseeds
Processing Business Line
11 - AYMERIC MONGEAUD
Chief Financial Officer (CFO)
12 - GABRIEL KRAPF
Industrial and International
Development Vice-President (VPIID)
13 - ÉRIC PHILIPPE
Deputy CEO
To support changes to the managerial structure, the Executive Committee
was extended on 1st
January 2016 to include the Group’s main business lines and
the Innovation Division. It also welcomed two new members in 2017: Olivier Delaméa,
General Manager of the Oils & Condiments business line, and Paul-Joël Derian, Director
of Research, Innovation & Development.
AVR IL — ACTIVITY REPORT 2016
Deciphering
the year
Despite a market context that was unfavorable to most of its
activities in 2016, the Group maintained its strategic course in line
with the Avril 2020 plan. It intends to sustain this momentum
in 2017 so as to accelerate its transformation.
herds. Animal activities were also hit hard by the
extremely rapid evolution in consumption modes,
a good example being the egg branch, where
farmers were forced to commit to introducing
“alternative” methods to battery cages, and have
struggled ever since. On its side, the poultry sector
pursued its consolidation, in line with the industrial
structuring actions completed with success during
the previous two years. Although our recapture
of the domestic market is now under way, exports
were still faced with fierce competition, and
repeated outbreaks of avian influenza had serious
impacts on certain products. In the pig branch,
2016 saw an improvement in market indicators,
and a rise in selling prices. The efforts made
to ensure the differentiation of French pork
in terms of quality, and its return to the shelves
of supermarkets, started to bear fruit.
On the plant side, although arable – and
particularly cereal – harvests in the Black Sea
region, USA or Argentina were very abundant,
French famers experienced their worst wheat
harvest for 40 years, mainly because of
unfavorable weather conditions. Unlike their
European competitors, French oilseed harvests
What is your analysis of 2016?
A. M.: After a difficult year in 2015, we had to deal
with a further deterioration in our environment.
Nearly all our activities suffered from a combination
of unfavorable factors. Prices of raw materials,
as well as marked volatility, squeezed our margins.
In particular, the fall in petroleum prices, down
to almost $27 in February – its lowest level for
12 years – penalized biodiesel. In parallel, our
commercial negotiations with major retailers
in 2016 did not allow us to pass on abrupt rises
of up to 16% that notably affected the prices of
rapeseed and olive oils. The “price war” and
repeated demands from retailers for deflation
worsened this situation, highlighting a profound
gap with economic reality in the sector. Finally,
the unprecedented crisis that affected our sectors
spread to involve all parts of French agriculture,
which had repercussions on our activities.
How were the group’s activities affected?
A. M.: Animal sectors remained in the front line
of the crisis affecting farming. In the wake of
the end of milk quotas, falling milk prices and
increased competition within Europe had serious
effects on livestock breeders, who reduced their
AYMERIC MONGEAUD
CFO of the Avril Group,
Deputy CEO of Sofiprotéol
Key figures
12 13
€5.9Bn
turnover
€1.78Bn
equity
€144M
EBITDA
AVR IL — ACTIVITY REPORT 2016
Investments
€207M
invested in 2016,
including:
€38 M
of investments devoted
to the Group’s information systems
€73 M
of industrial investments
in oilseeds sectors
€42 M
of industrial investments
in animal sectors
€54 M
of investments by Sofiprotéol,
the finance and development company
reached record levels and the scope of its
activities broadened to new sectors, such
as milk and ingredients.
What do you anticipate for the future?
A. M.: With equity reaching €1.78 billion and a
debt level that remained low and under control,
the Group benefited from financial solidity
that allowed it to sustain its level of investment,
essential to consolidating its business model,
the competitiveness of its industrial facilities
and achieving the goals laid out in Avril 2020.
In this context, the Group raised €880 million in
2016 through a deal club centralized by its holding
company and a program for the securitization of
customer debts, the latter being important because
it secured the funding of our strategic plan and
confirmed the confidence of our financial partners.
This operation also enabled the Group to accelerate
its transformation to achieve operational excellence
and the modernization of its infrastructures,
processes and information systems, the first
practical results of which were seen in 2016:
the creation of a Performance Monitoring Division,
the gradual deployment of SAP solutions to all
our entities, and the grouping of all accounting
teams in a shared services center (SSC) which
started by welcoming payroll staff in early 2016.
– and notably those of rapeseed – were disappointing,
which caused an increase in the use of imported
grain. As a result, our crushing margins shrank
under the triple effects of lower yields, higher grain
prices and stronger competition.
How did the Avril Group perform in 2016?
A. M.: Turnover was slightly down, at €5.9 billion,
and the Ebitda fell to €143.8 million. The first
six months were problematic, but the year
nevertheless benefited from a marked upturn
during the final quarter. However, net results were
severely impacted by a depreciation of assets in
our crushing, refining and esterification activities,
and in the shell egg branch, and reached minus
€51.6 million. In this particularly adverse market
environment affecting all our activities, these
figures illustrate the resilience of the Group and
fully validate the pertinence of our strategic plan,
Avril 2020. The main objectives are therefore to:
● reduce the exposure of our industrial activities
to external risks, notably by developing the
growth of our specialty products with global
markets;
● pursue the dynamic of activities by the finance
and development company, which achieved
excellent performances as both an investor
and financial manager in 2016. Its commitments
The Group benefited from
financial solidity that allowed it
to sustain its level of investment,
essential to consolidating
its business model.
14 15
2016
ESSENTIALS
Driven by a long-term vision built
on forward planning, Avril’s ambitions
for 2020 focus on four strategic areas.
A review of progress in 2016.
AVR IL — ACTIVITY REPORT 2016 ESSENTIALS
Avril’s challenges
Loyal to its mission – to contribute to better foods for humans
and preservation of the planet – Avril is positioning the future of the oils
and proteins sector in order to respond to the major food, environment
and societal issues of the 21st
century.
Meeting protein
requirements – in
France, Europe and
throughout the world
To feed a population that will
reach more than 8.4 billion in
2030, the contribution of
vegetable proteins is becoming
a major issue. Protein requirements
are likely to increase by 40%
between now and 2030* because
of two trends: the increasing
enthusiasm in developed
countries for vegetable proteins
as an alternative to meat, and
marked growth in the demand
for meat linked to rising living
standards in emerging countries.
To respond to this dual challenge,
Avril’s strategy is to increase its
production of protein-rich oilseed
meals for use as livestock feeds,
and to develop new processes
and products for vegetable
proteins that can be used for
human foods.
Solving the food-
climate equation
How to feed the planet while
reducing the impacts of climate
change on natural resources is
one of the principal challenges
faced by agricultural sectors in
the future. Africa is emblematic
of this problem, combining
important demographic growth
with intense exposure to climate
change. The structuring of
strong sectors, from agriculture
upstream to industry downstream,
and the sharing of know-how
in the context of trusting
partnerships, both constitute
practical and constructive
responses to this challenge.
The aim is to facilitate the
response of local sectors to
the needs of their markets and
consumers, while at the same
time implementing integrated
agricultural and livestock
practices that are coherent
with their environment.
A commitment to
respond to demands
from society
Health and environmental issues
are affecting the eating habits of
our societies. Consumers are now
aware of the origin of products,
their traceability and natural
sourcing. Producing better with
less, consuming responsibly and
favoring local sectors have
become central values, as have
animal welfare or the sustainable
health management of livestock
units. Because of its integrated
sectors and strong territorial
roots, the Avril model can play
a structuring role in the response
to these expectations: by
establishing the link between
grain and finished products,
by developing livestock sectors
where traceability is totally
controlled and by supporting
farmers and livestock breeders
to adapt their production to
these new challenges.
* BIPE survey – Avril Group, 2014
MICHEL BOUCLY
Deputy CEO
18 19
The future of our sectors
is based on a global vision
of plants and a balanced
exploitation of their two
by-products: oils and
proteins. We must continue
to develop markets for
these two inseparable
resources that will benefit
to all our regions.
Avril 2020:
change to enhance
our commitment
To assure a long term future for its activities, develop new markets
and better respond to the demands of its customers, Avril is pursuing
and accelerating its transformation into an ever more competitive, diversified,
international and innovative group. It will continue to operate these levers
so it can take up the challenges of today and the future.
ACCELERATING GROUP
TRANSFORMATION
A year after its initiation, the pertinence of the
Avril 2020 strategic plan has been wholly validated.
The problems encountered by commodities
trading, subject to fluctuations in raw materials
prices, have necessitated an acceleration of its
deployment. This plan aims to address to two
essential priorities: first of all, to further improve
operational excellence so that the Group will be
better prepared, more competitive and more
flexible in an unstable economic environment.
In this respect, the consolidation initiated four years
ago has enabled some major advances, and this
progress is ongoing. The second challenge is to find
new opportunities for growth. This involves greater
focus on specialty products with high added value,
and the development of brands and international
activities. In all these areas, decisive milestones
were reached in 2016. In plant sectors, where
first-stage processing has evolved towards product
diversification for global industrial customers,
and in livestock sectors, thanks to two major
acquisitions: Salus in Brazil, which offers the Group
access to the third largest global market in livestock
feeds, and Ewabo in Germany, which means that
Avril has become European leader in livestock unit
biosecurity. Pivotal to these changes has been the
Group’s focus on customers. Avril has shifted from
a supply approach, driven by its mission to exploit
agricultural markets, to a customer-driven
demand culture, designed to better adapt its
sectors to their expectations. A good example is
the initiative that has enabled the return of 100%
French pork to the shelves of Lidl, thus benefiting
both livestock farmers and local employment.
REAFFIRMING ITS VOCATION
While looking to the future, Avril nevertheless
remains loyal to its founding principles: to reduce
the dependence of French sectors, notably
with respect to vegetable proteins which are
an essential component in livestock feeds.
Protein remains central to the Group’s strategic
orientations regarding a new growth area: human
foods. Avril made considerable progress in 2016
through advances in its research programs,
notably regarding the utilization of rapeseed
and sunflower proteins in agri-food markets.
It is the same commitment to vegetable proteins
which led the Group to mobilize its forces in
favor of a sustainable and 100% French soybean
sector, which by definition is non-GMO. In 2016,
this resulted in plans for the first processing
unit to produce pig feeds for south-western
France (see opposite).
AVR IL — ACTIVITY REPORT 2016 ESSENTIALS
20 21
A SUSTAINABLE AND 100%
FRENCH SOYBEAN SECTOR
Having contributed to revitalizing the French
soybean sector, with more than 144,000 hectares
planted in 2016, Avril is pursuing its efforts to
organize the sector. It is working with the Carrefour
Group, the Euralis cooperative group, FIPSO and
Sanders-Euralis which have all signed a partnership
agreement on the creation of a long-term program
for the production of 100% French soybean. Within
this context, the mission in 2017 for Sojalim, the
Avril/Euralis joint enterprise, will be to operate
a processing plant for non-GMO French soybean
in Vic-en-Bigorre (Hautes-Pyrénées). Turned into
oilseed meal, this soybean will be used to feed pigs
reared in the south-west by breeders committed
to the Carrefour Quality Line. This is an excellent
example of Avril’s sectoral approach and its strong
territorial roots, working to serve France’s farm.
The view from upstream
agriculture
Vegetable oils and proteins make a significant contribution
to dealing with food, climate, energy, social and territorial
challenges in the modern world. Through the know-how,
excellence and creativity of our sector, we benefit from
some major advantages that will enable us to pursue
our commitment to combine the economic growth of
our production and the sustainable development of our
regions. Avril’s model and its actions to serve the sector
offer a practical illustration of which we, farmers, are
very proud. The Group’s strategic orientations are more
than ever playing a structuring role, creating value and
competitiveness for France’s farm and its actors: arable
farmers, livestock breeders, industry and consumers. And
the international reputation of the Group’s activities – and
hence of our sectors – offers a strong signal for the future;
it demonstrates the pertinence of a model imagined some
35 years ago by French oilseed and protein crop producers.
ARNAUD ROUSSEAU
Chairman of Avril Gestion and Chairman of the FOP
KRISTELL GUIZOUARN
Director of Sustainable Development
Sustainable development,
a vector for change
and differentiation
2016 saw a broadening to all our original activities and
beyond of deploying a sustainable development policy
loyal to the principles of our founders. In direct line with
our mission, this deployment offers a crucial lever for
the transformation and differentiation by which Avril
constantly determines its new challenges, through the
formalization of demanding policies and commitments
with respect to animal welfare, responsible purchasing
and supplies of sustainable palm oil. This is also achieved
through the practical structuring achievements of our
subsidiaries, such as the “Commitment to livestock”
approach and an emblematic partnership with Fleury
Michon with respect to French pork.
Strategic Area #1
A strong and competitive
Group in its markets
that listens to customers
The constant attention paid to health and safety issues, optimizing
purchasing and the supply chain, enhancing our customer culture,
improving the competitiveness of our industrial assets and also developing
sectors thanks to investments by Sofiprotéol, are all levers that allow
the Group to confirm its leadership and prepare optimally for the future.
AVR IL — ACTIVITY REPORT 2016 ESSENTIALS
22 23
In an adverse environment, Avril has continued to control
its costs. To preserve the profitability and long-term future
of its activities, the Group has based itself on an ambitious
operational and strategic excellence approach (EOS) that
has achieved savings worth more than €70 million since it
was introduced in 2013.
SAFETY, THE ABSOLUTE PRIORITY
Since 2013, the accident rate (TF2) has fallen by more than
60%. This performance has been favored by a continuous
progress approach called “EOS Safety”, which targets a zero
accident rate throughout the Group. Actions implemented
in this context include site safety visits (VST), a tool used by
all staff which ensures that safety is always central to everyday
activities. In three years, more than 700 employees have been
trained and more than 9,300 safety visits completed.
OPERATIONAL EXCELLENCE
AT ALL LEVELS
While continuing to mutualize purchasing, the Group also
initiated a Supplier Relationship Management program (SRM)
called “Win-Win Way”. The introduction of online negotiation
was one of the key achievements of 2016. In parallel, the Group
launched the gradual deployment of an ERP (SAP) solution
designed to facilitate the management of finance, purchasing
and operations, the aim being to improve our response to the
demands of internal and external customers and interactions
with suppliers and partners. In terms of industrial performance,
Avril pursued the deployment of Lean Six Sigma methods
to optimize processes and develop skills, generating nearly
€22 million of value. Consolidation of the EOS approach was
also extended to the supply chain through the structuring of
a dedicated Division responsible for aligning the Group with
the best global standards. To serve this ambition, Avril pursued
the sustained rhythm of its industrial investments. Nearly
€210 million were thus committed in 2016 to fund major
development projects, notably in industrial sites. In Algeria,
this involved the construction of a Lesieur mayonnaise factory
and an increase in the capacity of the Sim Sanders cattle feed
plant. In Tunisia, structuring of the rapeseed sector was pursued.
In Morocco, new olive groves were acquired. And in France, new
activities and installations were launched: at the Lesieur site
in Bassens (Gironde), Matines in Brugnens (Gers) and Ovoteam
in Plaintel (Côtes d’Armor). Last but not least, work started
on the “Avril Campus” which will open in 2018 near Rennes.
Operational excellence
is the life blood of our
success. In an adverse
market context,
consolidation of our
EOS program has more
than ever become a
differentiating advantage
which aligns the Group
with the best global
standards.
Competitiveness as seen by Gabriel Krapf,
Industrial and International Development Vice-President
€70M
savings achieved through
the EOS program since 2013
€760M
of investments since 2013
A SAFETY DAY FOR STAFF
In line with consistent efforts to raise the awareness
of employees to their safety, the Group organized the
first “Avril Safety Day” in 2016. At each site, all staff met
in working groups to review the actions carried out
and opportunities for further improvements. Workshops
offered reminders of basic safety rules, checks on
equipment and the training of staff in the use of particular
devices (fire extinguishers, defibrillators, etc.). Solutions
were also proposed by staff employees to prevent certain
risks, improve results and ensure that the Group moves
even closer to its goal of a zero accident rate.
Strategic Area #1 / Key facts
DEVELOPING
INTERNATIONAL
SYNERGIES
Progress with the EOS program
should enable Avril to confirm its
leadership in France and to develop
synergies between its activities in
order to conquer new international
markets. In this context, two new
operational zones were opened up
in 2016: the USA and Africa. This
extended organization will enable
Avril not only to reinforce the
presence of its subsidiaries in these
regions but also to enhance their
competitiveness. This represents
a crucial advantage in providing
better support for customers in
these regions.
OPERATIONAL EXCELLENCE
CENTRAL TO AVRIL’S COMPANY
PLANS
The EOS approach focuses on six principal areas: health
and safety at work, industrial performance, optimized
purchasing, adapting production facilities to market
conditions, optimizing support functions and reducing
working capital requirements. Since it was launched
in 2013, work on EOS has been gathering pace, with
numerous projects under way or completed that have
affected activities throughout the Group. 2016 was a further
illustration of these efforts, with more than 500 projects
initiated; a figure that should more than double in 2017.
AVR IL — ACTIVITY REPORT 2016 ESSENTIALS
24 25
WHEN SUPPLIERS CAN
IMPROVE SAFETY
During its second Supplier Day, Avril gave “Supplier Safety
Awards” to four of its suppliers in recognition of their significant
contributions to improving safety within the Group. Aon France
and Generali France collaborated with Avril in a fire risk
management program for production units. Delattre Levivier
Morocco (DLM) set up a system for awareness and safety
monitoring in industrial environments at Lesieur Cristal. In
the context of its strategic partnership with Oleon, G4S devised
a safety procedure for working in confined spaces, accompanied
by evacuation equipment specially designed for Avril. The fourth
award went to SAP and its partner Augusta Reeves, who
developed two new digital apps intended to achieve a zero
accident rate: an “Immediate Accident Communication” (CIA)
tool to notify accidents in a structured manner, and a “Digital
Safety Visit” (VSD) tool to facilitate the follow-up of actions
decided upon in the context of site safety visits.
Strategic Area #2
A resolutely
international Group set to
conquer new markets
Avril has a strong strategic objective to search for
international growth areas and seize new opportunities,
starting with the African continent, a priority in
the Avril 2020 strategic plan.
AVR IL — ACTIVITY REPORT 2016 ESSENTIALS
26 27
ACCELERATING DEVELOPMENT
IN AFRICA
Avril’s plan for Africa is to invest in oilseed sectors as
a response to the strong increase in local food demand.
By helping African farmers to produce more and better,
the Group aims to contribute to reconquering food
independence, as it is doing in France. Its approach is
to share its know-how in order to revitalize local sectors,
along the lines of the Moroccan model where for the
past four years the Group’s subsidiary Lesieur Cristal has
been supporting development of the oilseed sector and
restoration of the olive sector in the context of the Green
Morocco Plan. In 2016, Avril reinforced its presence in the
Maghreb countries through its local partners. In Tunisia,
a milestone was reached with development of a 100%
Tunisian rapeseed sector (see on p. 28). In Algeria, the
Group is already planning to double the capacity of the new
SIM Sanders cattle feed plant, which came into service in
2016, to produce up to 120,000 tons of feed a year. In the
same country, Avril has already launched the construction
of a mayonnaise production unit with its partner, the Djadi
Group, so as to respond to strong local demand.
CONQUERING NEW MARKETS
Avril is also developing new international growth
opportunities thanks to increasing importance of specialty
areas, acquisitions and a brand policy focused resolutely
on exports. Among achievements in 2016, the Oilseeds
Processing Business Line set up Avril Oil & Ingredient
Solutions (AOIS), a B-to-B commercial platform targeting
industrial customers in both France and internationally,
and opened a branch office in Singapore to sell Saipol
products on the Asiatic market. The Avril Animal
Specialties line will achieve its objective of attaining
international turnover of 50% in 2017, thanks to two major
acquisitions in the animal nutrition and health market:
Salus in Brazil and Ewabo in Germany.
With olive, sunflower
and rapeseed in Morocco,
rapeseed in Tunisia and
peanut in Senegal, we are
working in the context
of projects to structure
and develop efficient and
sustainable agricultural
sectors, from upstream
agriculture to downstream
industry. Avril wishes to
place its experience and
know-how at the service
of all African oilseed
producers.
International growth as seen by Yves Delaine,
Deputy CEO
STRUCTURING OILSEED SECTORS
IN SENEGAL
In 2013, the Avril and Castel Groups set up Copeol, a joint
enterprise focused on developing oilseed sectors in West and
Central Africa. Copeol Senegal owns a peanut processing plant
in Kaloack which benefits fully from Avril’s expertise in terms
of sectoral structuring and development. There is also close
involvement upstream: in the context of a partnership with
a leading peasant farmer organization (ASPRODEB), a major
program on contractual arrangements with producers with
products was initiated. In 2016, Copeol Senegal supported
more than 15,000 farmers growing 22,500 hectares of
peanut, a figure that should double in 2017. From upstream
to downstream, Copeol also focuses on developing local
markets through Oleosen, a refining and packaging plant
for grain oils – notably soybean – and mayonnaise, based in
Dakar. Traditional 1, 3 and 5 liter PET bottles delivering 25 cl
“doses” are particularly appreciated in Senegal, and products
from this factory are sold under the Jaara and Lesieur brands.
LAUNCH OF A
RAPESEED SECTOR
IN TUNISIA
In early 2017, the Tunisian
government, Avril and its subsidiary
Cristal Tunisia inaugurated a local
rapeseed sector. Initiated in 2014,
introduction of this crop first saw the
development of an upstream sector
involving more than 100 farmers
cultivating more than 3,000 hectares.
The sector was then structured both
upstream and downstream around
local partners in order to produce
100% Tunisian Lesieur-branded
rapeseed oil, with rapeseed meal to be
exploited by Sanders Tunisia as feed
for livestock throughout the country.
The rapeseed is processed by the local
Carthage Grain crushing plant,
and refining is assured by a Tunisian
refinery. Cristal Tunisia manages
the bottling and marketing of the oil.
TARGETING SUB-SAHARAN
AFRICA
Lesieur Cristal, leader in the Moroccan table oils
market, achieved a record year in terms of developing
its export sales, principally to Sub-Saharan Africa.
In addition to major growth in Asia, the Near East
and Middle East, Lesieur entered the Ethiopian market
in 2016, selling 500,000 liters of Lesieur oil within
a few months, thanks to its strong reputation.
Other projects are planned for 2017.
Strategic Area #2 / Key facts
AVR IL — ACTIVITY REPORT 2016 ESSENTIALS
AVRIL, A PARTNER IN THE INITIATIVE
ON THE ADAPTATION OF AFRICAN
AGRICULTURE
In the context of the COP22, which was held in Marrakech
in November 2016, Avril and its subsidiary Lesieur Cristal
mobilized their forces to support the Adaptation of African
Agriculture (AAA) initiative. Launched in 2016 under the
sponsorship of the Moroccan Minister for Agriculture and
Maritime Fisheries, this initiative places African agriculture
at the center of negotiations on the climate and proposes
innovative solutions to resolving the food and climate equation.
The challenge: between now and 2050, the African continent
will see its population double to reach nearly 2.5 billion people.
It will therefore be necessary for it to triple its agricultural
productivity while reducing the impacts of climate change on
its natural resources. One of the solutions is based on the ability
of agricultural sectors to feed more people while implementing
sustainable farming and livestock practices that are consistent
with their environment, in a context of ecologically intensive
agriculture. This vision is shared by Avril, which presented a
good example of successful adaptation in Africa in the form
of its efforts to revitalize the Moroccan oilseed and olive sectors.
Strategic Area #3
Innovation to drive
the creation of
sustainable value
During the past three years, Avril has been turning increasingly
towards vegetable proteins to diversify markets in its sector
and respond to the challenge of feeding the planet. 2016 was
a year of considerable progress in this area, and the Group
Research, Innovation and Development Division (RID Division)
was notably involved in collaborative projects
to structure the future.
AVR IL — ACTIVITY REPORT 2016 ESSENTIALS
PROTEIN, A CENTRAL THEME
OF INNOVATION
Valorizing vegetable proteins is a central theme for work
by Avril’s RID. The aim is use grain to produce concentrates
(containing 60% protein) and isolates (90%) in order to
develop specialty products for three types of market: animal
nutrition, food products and Proteochem®
(protein chemistry).
In the area of human foods, Avril aims to play a leading role
in the development of vegetable protein-based foods that
will be attractive to consumers. Rapeseed is the full package.
It is a valuable protein from a nutritional point of view that
can meet considerable demands in volume terms, and it
benefits from a highly positive image. In 2016, research on
the development of rapeseed protein isolates and derivatives
made some major advances. This work is now at the stage
of pilot trials being performed by the IMPROVE* platform,
and the first production plant is scheduled for 2019.
A VECTOR FOR CHANGE WITHIN
THE GROUP
For Avril, this swing towards protein involves the development
of tools and skills in first-stage processing. Upstream, in order
to optimize the extraction of protein, which is more fragile
than oil, and downstream to market a portfolio of specialty
products in a broad diversity of markets. At the industrial
level, the production of protein isolates from rapeseed
grain requires the implementation of specific technologies.
This implies either adjustments to current crushing
processes, or the development of radically different methods.
In either case, industrial facilities will have to change so as
to ensure that all grain components can be determined
and preserved under a biorefining approach and thus exploit
all parts of the plant.
* Institut Mutualisé pour les PROtéines VEgétales (Joint Institute for Vegetable
Proteins).
Born of efforts to reconquer
the independence of
France’s farm with respect
to vegetable proteins,
mainly for animal nutrition,
Avril was initially based
on the valorization of oils.
Today, we are opening a
new chapter in the history
of our Group and its sector
by exploiting the protein
fraction of grains for direct
use in human foods.
15patents filed
each year
5main RID centers
in France, Morocco
and Malaysia
250research scientists
30 31
Avril’s RID Division has joined a European
consortium of industrial partners in order
to implement a research project with
Wageningen University in the Netherlands.
The aim is to develop new techniques for
the production of meat analogues using
plant raw materials, in order to achieve
results that are similar to meat in terms
of texture and flavor. The markets targeted
are human foods and pet products. Avril’s
mission is to supply protein ingredients from
rapeseed and sunflower.
Towards a new
generation of
vegetarian steaks
Innovation as seen by Paul-Joël Derian,
Research, Innovation & Development Vice-President
PROGRESS WITH BIOTFUEL
The BioTfueL project, supported by ADEME, aims
to develop a series of processes that can deal with
a broad range of biomass resources (agricultural
and forestry wastes) in order to produce a second-
generation biofuel that will complement the first
generation. The project involves six partners that
are leaders in their sectors. At the end of 2016,
a demonstrator was opened in Dunkirk, dedicated
to the gasification and purification of biomass which
was previously “roasted” at Avril’s site in Venette.
Development of the biomass roasting process at
Avril’s site opens the way to numerous opportunities
for valorization, notably as energy, and constitutes
a development lever for other Group activities.
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Strategic Area #3 / Key facts
Using rapeseed meal as its
starting material, Evertree aims
to target all markets involving
the application of Proteochem®
,
where it can procure both health
and environmental benefits
for consumers.
EVERTREE, A NEW
MARKET FOR
RAPESEED PROTEIN
Avril, Bpifrance and an Israeli start-up,
Biopolymer Technologies, set up Evertree
in 2016. Its mission is to develop biosourced
solutions based on rapeseed protein as
alternatives to chemical products of fossil
origin that generate VOC (volatile organic
compounds). These compounds, such as
formaldehyde, are harmful to both health
and the environment, but they are
important components in resins, glues,
paints and materials used for numerous
industrial applications. Evertree has opened
up a new pathway for Avril: Proteochem®
,
or protein chemistry. The first industrial
application that is currently being targeted
is an additive with high added value used for
the manufacture of wood-based composite
panels. It can reduce or even avoid the
presence of formaldehyde – and exposure
to this substance. An initial pilot unit should
open during 2017 at the P.I.V.E.R.T. (“Picardie
Innovations Végétales, Enseignements et
Recherches Technologiques”, Picardy
Plant-based Innovations, Teaching and
Technological Research) center in
Compiègne, with hopes of industrialization
as early as 2018.
AVR IL — ACTIVITY REPORT 2016 ESSENTIALS
7FOUNDER PARTNERS
OF THE CONSORTIUM:
● Avril
● Limagrain
● Neovia
● Roquette
● Tereos
● Terrena
● Vivescia
Supported by the Industries
& Agro-Ressources (IAR)
Competitiveness Cluster.
MAKING FRANCE A FUTURE
LEADER IN PROTEINS
France has all the advantages to become an
international agricultural and industrial leader in the
production of proteins, notably those of vegetable
origin. This is the conviction of the seven leading
French companies in the sector, including Avril,
which have joined forces in the context of the France
Proteins Consortium. Their aim is to make protein
a spearhead for the French economy. An agreement
was signed with the government during the SIAL
Food Exhibition in 2016, which defined a strategic
program for development of the French protein
sector in the context of investments worth €1 billion
over five years. This program, which supplements
the Vegetable Protein Plan for France 2014-2020,
includes proposals on support tools for research,
development and industrialization.
5MISSIONS:
● To structure the French sector
● To support R&D
● To accelerate industrial investment
● To encourage the creation
and growth of start-ups
● To support product innovation
32 33
Strategic Area #4
People committed
to serving a federative
company project
The men and women of Avril contribute every day to the
development of strong national sectors. They are mobilized
by a collective project and a federative vision of common values,
around which the Human Resources Division deploys new initiatives
that will drive structural change.
AVR IL — ACTIVITY REPORT 2016 ESSENTIALS
In 2016, this dynamic was marked by a particular focus
on welfare and health. As a true vector for cohesion, it was
notably through sport that the Group supported this change.
And with success, as testified by the actions that have involved
an increasing number of colleagues, such as the Mont Saint-Michel
marathon, in which more than 130 staff participated in 2016.
It was in the same spirit that December 2016 saw the
inauguration of a “Fitness center” for staff at the Lesieur plant
in Coudekerque, northern France. Equipped with exercise
bikes, treadmills, exercise benches and table soccer, this center
offers staff an opportunity to relax during their breaks or after
work. This initiative, developed with the social partners, should
provide a model for others in the near future.
CONSOLIDATING A COMMON CULTURE
A European Works Council (EWC) was set up to develop the
social cohesion of teams and to consolidate a common culture.
Meeting for the first time in June 2016, it counts employee
representatives elected for four years who come from Avril
entities in Germany, Belgium, France, the UK, Poland and
Romania, as well as an observer member from Morocco.
Along the same lines, Avril also launched an intranet platform
for use by its employees. Called Yellow, in 2016 it attracted
more than 3,500 staff members from French Group entities
who were interested in its different resources, communities,
applications and information. In 2017, Yellow will be pursuing
its deployment in international subsidiaries.
DEVELOPING TRAINING
AND ACCESS TO EMPLOYMENT
In January 2016 the Group signed a partnership with the
French government in the context of the Enterprises and
Quartiers Charter. Between now and 2018, the Group
will host at all its sites – both in France and internationally –
400 young people in vocational day release training. Sites
employing more than 30 people will also have at least 6%
of disabled staff. In parallel, Avril is pursuing its efforts to
develop skills, exemplified by the launch of the Avril Academy
in January 2016. This in-house “university” now groups all
the Group’s training facilities and constitutes an efficient vector
for the dissemination of culture and knowledge. A first training
course was set up in 2016; called “Weedo”, it is intended
for our 450 local managers and focuses on basic management
skills. At completion, a professional certificate is issued by
the Polytechnic College.
Together, we want to
enhance our collective
commitment to Avril’s
singular company
culture. We want each
employee to be proud
to contribute to
developing agro-food
and agribusiness sectors
for tomorrow.
34 35
Avril’s HR initiatives as seen by Philippe Lamblin,
Human Resources Vice-President
3,000 JOBS IN AGRICULTURE
AND THE AGRO-FOOD INDUSTRY
A totally new approach in the French agricultural and
agro-food industries has been adopted: for the first time,
fifteen companies and federations have worked together
to create a platform dedicated to employment in the
sector. The result: 3,000 job opportunities were listed
by the partner companies in France. Under the impetus
of Xavier Beulin, the Avril, Bel, Danone, Nestlé/Nespresso
Groups and the InVivo, Tereos and Terrena cooperatives,
ANIA, FC2A and ANEFA organized a “job dating” session
in the context of the 2017 Salon international de
l’Agriculture in Paris. Their aim was simple: to facilitate
contacts between companies in the sector and those
seeking employment. Several hundred people
participated in this initial event.
Strategic Area #4 / Key facts
AN EXECUTIVE
COMMITTEE FOR
YOUNG PEOPLE:
LET THE YOUNGER
GENERATION SPEAK
Ensuring the more active participation
of young managers in changes to the
Group and its strategy was the aim
of the Executive Committee for young
people, launched by Avril. It comprises
sixteen members, all younger than
35 years of age and including at least
eight males and eight females working
in different parts of the Group, such
as Saipol, Matines, Lesieur, Lesieur
Cristal, Expur, Sanders or Ovoteam,
etc. Appointed for a period of two years,
these young colleagues will be able to
express their views on strategic subjects
relative to operational affairs, such
as internal changes with respect to the
digital revolution or working practices.
The first meeting took place in
September 2016.
A SUCCESS FOR AVRIL’S
EMPLOYEE SHARE OWNERSHIP
SCHEME
In February 2016, Avril signed a collective agreement
on a Group Savings Plan (GPS) which would enable
employees of the French subsidiaries to invest in the
Group by acquiring shares in an open-end company
mutual fund (FCPE). Nearly 50% of staff based in
France participated in this operation, which was far
more than had been anticipated. This plan underlines
the Group’s desire to involve employees in its profits
over the long term, to stimulate the understanding
of its teams regarding the challenges we face in the
future and to develop a sense of belonging and loyalty
to the company’s plans. Employees were able to invest
in the FCPE Avril as from May 2016.
AVR IL — ACTIVITY REPORT 2016 ESSENTIALS
AN AVRIL CAMPUS IN RENNES
FOR 2018
The Group has just launched construction of the Avril
Campus. Based at the ZAC de Ker Lann in Bruz, south
of Rennes, it will employ nearly 600 people. Covering
a total of 13,000 m2
on three levels, and surrounded
by 28,000 m2
of grounds, this collaborative facility will
cover the vast range of skills required by all the
Group’s activities, from plant sectors to animal
sectors, and will also centralize certain support
functions. The Avril Campus will open in 2018. In line
with the rural roots of the Group, it has a landscaped
design, being constructed around a solar greenhouse
that will contain the Avril Campus.
36 37
OVERVIEW OF
ACTIVITIES
Avril’s activities are organized around its
two complementary skills: that of an investor
through Sofiprotéol and its industrial activities
structured in seven business lines. An overview
and some highlights of the year.
AVR IL — ACTIVITY REPORT 2016 ACTIVITIES
Sofiprotéol
The trusted partner
of French sectors
With its new organization and increased resources, Sofiprotéol
broadened the scope of its actions in 2016 to serve the growth and
structuring of French agricultural and agri-food sectors. The Avril
Group’s finance and development arm, Sofiprotéol increased the value
of its investments so as to consolidate growth initiatives while preparing
to face the agricultural challenges of the future.
€275 M
invested in 5 years
€54 M
invested in 2016
40 41
For more than 30 years, Sofiprotéol has been supporting
companies in the European agricultural and agri-food
sectors through minority stakes and loans. Its aim is to
support their long-term growth and assure the future
for these sectors in France. This mission in the general
interest was reaffirmed in 2015, in line with the Group’s
new governance structure. Sofiprotéol’s activities benefited
from a new organization and increased resources, its
capital base rising to €330 million. A new fund was set
up in 2016 called Sofiprotéol Dette Privée (see on p. 44)
to provide a supplementary funding tool for companies in
the form of bonds. This new configuration offers greater
margin for maneuver and improved market visibility, and
it confirms Sofiprotéol’s position as a driver of growth in
national sectors, alongside its interprofessional partners.
DIVERSIFIED SECTORS
OF ACTIVITY
In the context of the Avril 2020 strategic plan, Sofiprotéol
is aiming to invest more than €250 million between 2016
and 2020, versus the €215 million achieved between
2011 and 2015. The scope of its intervention has also
More than
100companies given
support, representing
110,000 jobs
6areas of intervention
52stakeholdings
MICHEL BOUCLY
Deputy Manager of Sofiprotéol
Sofiprotéol offers an
original business model
that can serve the general
interest. Its actions are
based on sustainable and
responsible investments
that will create value for
our partners and all
agricultural and agri-food
sectors in our regions.
42 43
broadened to new activities, as an extension to French
agricultural sectors. For the future, three areas have
been identified for action:
● upstream agriculture, and notably support for the
development of new seed varieties and products
for plant protection and nutrition, which will enable
farmers to produce more efficiently and competitively,
while respecting the environment;
● ingredients, notably those made from vegetable proteins,
through two stakeholdings: in Solina, the European leader
in ingredient-based tailor-made solutions for the agri-food
industry, and in Inveja, in collaboration with the cooperative
group Terrena (see on p. 45).
● the dairy sector, the leading consumer of rapeseed
meals in France, in the context of the crisis affecting
French livestock farmers but structural growth in global
demand. This strategic choice is once again targeting
a long-term investment that will consolidate the French
dairy sector and draw value from rapeseed proteins
produced in France.
Breakdown of
commitments in 2016
Agricultural and food processing and
by-products
Upstream plant production
Upstream animal production
Sustainable innovations,
investment funds, other
Food products
and consumer goods
Debt fund
41%
10%
9%
21% 14%
5%
A renewed partnership
with Vivescia Industries
In line with the initial investment made
in 2014 at the issue of convertible bonds,
Sofiprotéol took a minority stake in
the capital of Vivescia Industries in August
2016. A subsidiary of the Vivescia
cooperative group, Vivescia Industries
federates firms specialized in the
processing of cereals, mainly for food uses.
The capital stake by Sofiprotéol aims to
support the funding of structuring projects
in the milling, malting and baking sector,
and particularly international activities
for the subsidiaries, NutriXo and Malteurop.
Total
€240 M
AVR IL — ACTIVITY REPORT 2016
A RECORD LEVEL OF INVESTMENT
IN 2016
In 2016, Sofiprotéol invested nearly €54 million in
different companies to consolidate the agricultural and
agri-food sectors (not including support for innovation),
which was a record level (against €36 million in 2015).
In the first-stage processing sector, the Group’s finance
and development arm pursued its strategy to support
firms through different initiatives. It took a minority stake
in the capital of Vivescia Industries to enable the funding
of international projects in the milling, malting and
bakery sector. It pursued its efforts to revitalize a
sustainable and competitive non-GMO soybean sector
for France, notably through a partnership with the Euralis
and Fipso cooperatives and the major retailer Carrefour.
Sofiprotéol established new alliances designed to
consolidate French livestock sectors. After supporting
Terrena in its takeover of Doux, Sofiprotéol and
Unigrains backed the acquisition by Arterris of Dufour
Sisteron and Ovimpex in the beef and lamb sectors.
These acquisitions will enable Arterris, working in
collaboration with the cooperative Agneau du Soleil,
to develop and consolidate the French lamb sector
by reinforcing the value chain downstream and thus
cover the collection of animals, their slaughter, cutting
and then processing. In parallel, Sofiprotéol participated
in the takeover of Medria, which specializes in solutions
to monitor and control the health of dairy cows. Medria’s
CapAgro Innovation
doubles in size
Since it was set up in 2014 by Sofiprotéol,
Tereos and Bpifrance (amongst others),
the first French venture capital fund
focused on financing innovative start-ups
in the agriculture and agri-food sectors has
seen growing success. During its first thirty
months, and using its initial endowment
of nearly €60 million, CapAgro achieved
15 investments in sectors central to today’s
challenges and creators of value and jobs,
or a rate that was higher than the initial
goal. These companies include the
manufacturer of robots for agriculture,
Naïo Technologies, and Prêt à Pousser,
a European pioneer in indoor vegetable
gardening. Driven by this enthusiasm,
the fund has issued a call for new
subscribers and hopes to reach a value
of nearly €150 million; it will thus become
the leading fund in Europe specialized
in innovation in the agricultural and
agri-food sectors.
Sofiprotéol Dette Privée,
bonds for the food
and agri-food sectors
Faced with increasingly numerous requests
from companies in the agricultural and
agri-food sectors, Sofiprotéol set up a private
debt fund that could respond to their specific
requirements. To achieve this, Sofiprotéol
joined forces with a French leader in
asset management, Tikehau IM, to set up
Sofiprotéol Dette Privée. This fund is
designed to support the development
of companies in the sector through
interest-only loans or the leverage funding
of acquisitions. It offers a tool that will
complement the capital operations already
carried out by Sofiprotéol. Funded initially
by Sofiprotéol and Tikehau Capital with
a group of leading institutional investors,
its first closing achieved capital of more
than €120 million, the aim being to reach
commitments worth nearly €200 million
by the end of 2017.
ACTIVITIES
44 45
aim is to develop new data processing solutions that
will further improve the technical and economic efficiency
of dairy farms, both in France and internationally.
PREPARING THE AGRICULTURAL
CHALLENGES OF THE FUTURE
To help French sectors to structure their activities and
face the challenges of the future, Sofiprotéol pursued
its partnership with CapAgro Innovation, the leading
venture capital fund in France dedicated to agriculture.
Fifteen innovative start-ups have thus received support
(see opposite) since the fund was set up in 2014. In
parallel, in the context of managing FASO (the Strategic
Oilseeds and Pulses Action Fund), Sofiprotéol and
the BearingPoint consultancy published a study on
development strategies for digital agriculture, market
prospects in France and internationally, and the positions
of different actors in the sector. It appears that four key
levers need to be operated in response to the demands
of farmers and enable the large-scale development of
digital agriculture: to demonstrate a return on investment
in products and services for farmers, to propose tools
that are simple to use, to find appropriate marketing
channels and to offer flexible solutions that can adapt
to a changing environment. Sofiprotéol aims to contribute
actively to addressing these challenges by playing a
central role in developing the excellence of these new
activities, in order to serve sustainable agriculture.
Avril and Terrena,
common ambitions for
structuring projects
Sharing many common values, such as
the development of sustainable farming
and the consolidation of agricultural
sectors around quality approaches,
Sofiprotéol and the Terrena cooperative
group have further strengthened their
links. Partners since 2014 in the creation
of Ekoranda, which assures the extrusion
cooking of oilseed and protein grains
for animal feeds, the two companies
set up Inveja in 2016. This firm specializes
in vegetable protein-based ingredients
that are used by the baking and pastry
sectors. The objective is to foster the
emergence of a French leader in the
European market between now and 2025.
Sofiprotéol also provided support for
Terrena in its takeover of the poultry
company Doux, their agreement being
finalized in March 2016. The objective
is to pursue consolidation of the poultry
market in France, contribute to the
recovery of Doux and assure long-term
export positions for the French sector.
Sofiprotéol continues to pursue its missions
at the service of agriculture, with the
consistent aim of developing markets for
French products, constructing strong sectors
for the future and encouraging innovation.
CLAIRE MAINGON
Director of Investment,
Deputy Director of Commitments
PIERRE DABBADIE
Technical Sales Manager at Sanders Euralis – France
GB_AVRIL_ra_170x240_BAT.indd 45GB_AVRIL_ra_170x240_BAT.indd 45 15/06/2017 12:4315/06/2017 12:43
AVR IL — ACTIVITY REPORT 2016
Oilseeds Processing
Driven by diversification
and innovation
In a difficult context, the Oilseeds Processing Business Line
improved its resilience and accelerated its transformation,
evolving its business model to serve the French sector: more
customer-oriented, innovative, diversified and international.
11sites, 7 of them
in France
1.7 M
tonnes of biodiesel
produced
€2.9 Bn
turnover
2.2 M
tonnes of oilseed
meal produced
4 M
tonnes of grain
crushed
ACTIVITIES
46 47
A COMPLEX YEAR BUT
CONSTRUCTIVE FOR THE FUTURE
Upstream of the oils and proteins sector, the Oilseeds
Processing Business Line has two activities: the industrial
processing of oilseed grains (crushing, esterification,
refining) and the sale of oils, biodiesel, oilseed meals and
proteins. During the past two years, these activities have
evolved in a highly unstable economic environment, whose
volatility further increased in 2016. Between petroleum
prices which reached their lowest level of $27 per barrel in
February 2016, and the sustained prices of raw materials
linked to poor European rapeseed and sunflower harvests,
first-stage processing margins found themselves under
considerable pressure. In the biodiesel market, the “scissors
effect” was compounded at the start of the year by strong
competition within Europe. These unfavorable conditions
weighed on activities and profits in the business line.
Biodiesel losses were minimized thanks to an upturn
in petroleum prices and a strong resumption of production
at the end of the year. As for crushing, the anticipated
recourse to grain imports, and the good management
of grain-oils-meals trading meant that a satisfactory balance
could be maintained. In a context of smaller French harvests
during the past two years, imports of rapeseed proved
essential to ensuring the sustained activity of sites and
guaranteeing markets within the French sector. In order
to return to profitability, and to sustainably adapt its
activities, the Oilseeds Processing Business Line implemented
its new strategic approach, together with an action plan
combining savings and value creation which should generate
more than €40 million between now and 2020.
Opening of the
Avril Oil & Ingredient
Solutions platform
A highlight of the diversification of efforts
by the business line, this new commercial
platform will enable the grouping and
structuring of certain activities in oils
and ingredients. Organized along B-to-B
lines, it targets customers in the agri-foods,
cosmetics and health industries who are
offered vegetable oils, specialty oils and
functional ingredients produced by Saipol,
Lesieur, Kerfoot and Expur. Already highly
active, this platform is notable because
of the Group’s commitment to launching
sunflower lecithin, a natural food emulsifier
that can replace soy lecithin. Industrial
investments have been made at Saipol and
Expur so that production can start in 2017,
and Avril will become the leading producer
in Europe. Another important event
was the Group’s entry into the market
of by-products rich in plant sterols.
JEAN-BAPTISTE BACHELERIE
General Manager of the Oilseeds
Processing Business Line
2016 was characterized
by a dual trend: our
ability to resist the crisis
thanks to improved risk
management, a very
strong orientation
towards innovation,
and diversified responses
to the demands of our
customers.
48 49
IMPROVING OUR CONTROL
OF RISKS
2016 was a good illustration of this: mastery of external
and internal uncertainties is crucial to success in this
business line. Faced with market fluctuations, our trading
activities (grain, oils, meals, biodiesel) implemented
appropriate measures: a redesigned organization and
new tools for the management of trading risks and
performance appraisal. Internally, the supply chain
constitutes the link between executing a trading contract,
operational planning and customer satisfaction; it is
the cornerstone of work flow management. In 2015,
the department was reorganized around two objectives:
to reduce transport costs under a multi-mode approach
(maritime, river, road and railroad) and to optimize all
work flows, from grain to finished products, in order
to gain in flexibility. In 2017, the challenge will be to base
improvements around the Group’s efforts with respect
to the digital revolution. Finally, reducing industrial costs
was more than ever on the agenda, focused on three
areas for improvement: mastery of production processes,
optimized energy consumption and efficient maintenance.
ADAPTING OUR BUSINESS MODEL
To define its strategic policy, the business line has
based itself on Avril’s mission which is to create new
sources of added value in terms of both agricultural
supplies and products from its factories: refined oils,
ingredients, proteins, etc. This supposes an adaptation
of our approach in order to shift from that of large
volumes to diversified and profitable niche markets.
This has marketing, commercial and industrial
implications: segmentation between different products,
formats and qualities; the definition of a product portfolio
in line with customer requirements; the adaptation
of industrial know-how and product logistics. Important,
well-structured and sustained innovations are being
introduced throughout the business line. Already under
way, the diversification of activities was illustrated in 2016
by structuring initiatives: optimization of the portfolio
of refined oils under a strongly customer-oriented
approach based on new applications thanks to the
recruitment of technical sales teams, and creation
of the Avril Oil & Ingredient Solutions platform (AOIS;
see on p. 47). The line also continues to focus on its
international efforts to find new outlets, with the
operational launch of Saipol Asia (see opposite).
Saipol targets Asia
To reinforce its international efforts and
diversify its markets, Saipol has opened
an office in Singapore to sell its products
on the Asiatic market. The aim is to seize
new opportunities in different human and
animal food markets. Several projects are
already under way: the sale of rapeseed
meals from Romania in Vietnam, and the
supply of high-quality edible oils in China
(sunflower and high-oleic sunflower oils)
that place value on their French origin.
A new management
structure for the
business line
ORGANIZED IN
5COMMERCIAL PLATFORMS:
● Biodiesel
● Crushing
● Oilseed meals and proteins
● Refined oils and ingredients
● Specialty oils
AND
3MAIN REGIONS:
● Western Europe and Asia
● Eastern Europe, from Poland to Russia
● Northern Europe, from Ireland
to Scandinavia and including the UK
AVR IL — ACTIVITY REPORT 2016
A CHAOTIC YEAR FOR
RAPESEED BIODIESEL
To the oil crisis that triggered a very low price
per barrel at the start of the year, causing strong
competition within Europe, was added greater
competition among HVO (Hydrotreated Vegetable Oil)
biofuels, favored by the lower cost of palm oil imports.
Avril was thus forced to adjust its biodiesel production
activities temporarily in 2016. With the upturn in
petroleum prices, the situation improved in the autumn
and biodiesel sales experienced an upturn, sustained
by favorable incorporation rates: up to 8% in French
diesel (7% in Europe) and 4%, which is now obligatory,
in off-road diesel.
PRESERVING A SECTOR
THAT CREATES VALUE
Following the pioneering efforts of France in the area
of renewable energies, Europe played a decisive
and leading role in the development of first-generation
biofuels. But in recent months, the European Commission
has been proposing a reduction in the share of this
renewable energy in transport fuels, its aim being
to foster the growth of second-generation biofuels.
In this context, the French vegetable oils and proteins
sector, alongside all European actors in biofuel
production, remains mobilized to preserve the market
for first-generation products. Resulting from the
commitment of historical actors in their first generation,
second generation biofuels complement their
predecessors and will enable Europe to achieve
its objectives with respect to renewable energies.
Although over-capacity of the market and regulatory
uncertainties have weakened one of the principal
markets for farmers producing rapeseed, Avril
remains confident in the future of a French sector that
creates value and has unquestionable environmental
and industrial advantages:
Figures on the French
biodiesel sector
20,000jobs in regions throughout the country
1L = 1.5Kg
For one liter of biodiesel,
the equivalent of 1.5 kg of rapeseed
meal is produced for animal feed
100,000farmers grow rapeseed
€1.5Bn
annual savings in the import
of fossil diesel and oilseed meals
for livestock feeds
€2Bn
contribution to French GDP
FOCUS
Preserving the
French rapeseed
biodiesel sector
ACTIVITIES
50 51
● Biodiesel is one of the only renewable energies available
at present that can easily replace petroleum-based fuels.
It generates greenhouse gas emissions that are 60%
lower than those of fossil diesel, and its incorporation
causes a significant reduction in emissions of pollutant
particles: up to 43% fewer particles with a B30 diesel
(IFPEN study – 2016).
● Rapeseed biodiesel comes from an agricultural and
industrial sector that represents 20,000 jobs in France
(mainly in rural areas), favors regional economic
dynamism and contributes €2 billion to French GDP.
● A by-product of rapeseed meals used for livestock
feeds, rapeseed biodiesel contributes to the food
dimension of agriculture and enables France to reduce
its dependence on GM soybean imports. Thanks to
its rapeseed biodiesel, France’s self-sufficiency has
risen from 23% in 1983 (when the Group was founded)
to more than 55% today.
Born in France in the early 1990s, the
biodiesel sector is emblematic of the
excellence, innovation and know-how that
drive our territories. Its development has
enabled the advantages of our agriculture
and the strengths of our industry to come
together and make France a leader in
renewable energies and plant chemistry
in Europe, while at the same time defending
the independence of France and Europe
with respect to vegetable proteins, an
essential component in our livestock feeds.
STÉPHANE YRLÈS
General Secretary
AVR IL — ACTIVITY REPORT 2016
Oils & Condiments
Leading brands in their markets
In an uncertain market environment, the Oils & Condiments
Business Line drew strength from its sectoral organization,
brand reputation and constant innovation dynamic
to consolidate its market positions and accelerate its
international development.
12sites, of which
7 in France
€1,1 Bn
turnover
1.2 M
tonnes of table
oils sold
44,000tonnes
of soap sold
42,000tonnes
of sauces sold
ACTIVITIES
52 53
LESIEUR ACCELERATES
ITS GROWTH IN ALL MARKETS
French market leader in edible oils and third in condiments,
Lesieur continues to launch breakthrough innovations
and to modernize its industrial facilities, while accelerating
its international deployment in North and West Africa,
Asia, the Near East and Middle East. In a stable French
market where industrial margins were under pressure,
Lesieur focused on breakthrough innovations, targeting
new consumption modes and top-quality product ranges
driven by original recipes. After the success of Stop Goutte,
the brand created a buzz with its “easy spread” oil in a
new 150 ml format with an integrated silicone applicator.
The success of its combined oils enabled it to broaden
its range in 2016 with ISIO 4 Touche de Noix and Lesieur
Sunflower & Olive. Puget, which in 2017 will be celebrating
its 160 years of existence, pursued the sustainable growth
of its sales, thank notably to the launch of a squeeze bottle
with a no-drip stopper, and a premium virgin olive oil
(Saveur fruité noir), a 100% French oil with the delicate
flavor of preserved olives. In order to increase its activities
in a strong growth segment, Lesieur also joined forced
with the Italian brand Monini to introduce its organic olive
oils onto the French market. In terms of condiments,
the company produced some new recipes, such as its
Duo mayonnaises (an exclusive Lesieur innovation),
a sweet and sour sauce and other two-phase sauces.
AN INDUSTRIAL UNIT
IN ALGERIA IN 2018
With its products now sold in 65 countries, Lesieur is
accelerating its international deployment by operating
two levers: developing its export activities and setting up
production units in growth markets. Thus Lesieur
developed the export from France of premium products
– notably condiments – whose sales continue to increase
in Asia (particularly China) and in the Middle East, driven
by the French brand name and tailor-made recipes adapted
to market demand. This trend was also seen with respect
to olive oil, through international distribution by Lesieur of
the Italian brand Azienda Olearia del Chianti. At a local level,
Lesieur increased its presence in certain countries through
partnerships, such as the agreement with the Djadi Group
to construct a mayonnaise factory in Algeria, which will be
operational in 2018.
2016 as seen by Romain Nouffert,
General Manager of Lesieur
A revolutionary process
in Coudekerque
A minor revolution is in preparation
at the Lesieur unit in Coudekerque
(Nord), the historical home of the brand.
€22 million are being invested to modernize
and develop both industrial and research
activities at the site. This record investment,
spread over three years, means that
Lesieur Coudekerque will become a
reference in terms of quality, flexibility
and industrial innovation with respect to
both recipes and packaging. On top of all
this, the plant’s capacity will increase to
210 million liters (versus 180 million in
2016), alongside significant reductions
in the amount of plastics used, more
durable bottles and a revamped design,
so as to better respond to the demands
of both customers and consumers.
OLIVIER DELAMÉA
General Manager of the
Oils & Condiments Business Line
To serve our mission,
our brands constitute
a remarkable vector for the
creation of value shared at all
levels of the sector. That is
what makes these brands
leaders in their markets, the
priority being to constantly
improve our products and
ensure our commitment
to responding better to the
demands of consumers.
54 55
AVR IL — ACTIVITY REPORT 2016
EXPUR TARGETS SYNERGIES
TO DIVERSIFY ITS PORTFOLIO
A key actor in the oilseeds market in Romania, Expur
assures the collection of rapeseed and sunflower grains
for Saipol and for its own site in Slobozia, and sells
oilseed meals, edible oils and biodiesel in Romania, which
is the development platform for the entire Black Sea
region and Mediterranean basin. Expur had to operate
in a difficult economic environment in 2016. Falling
petroleum prices and consumption levels, linked notably
to a demographic downturn in Romania, constituted
obstacles to the development of its activities. Despite
this adverse context, and reinforced by investments in
recent years and the mobilization of its staff, Expur was
able to overcome these problems and consolidate its
position in both the local and export markets, achieving
globally dynamic production. Its collection and crushing
activities saw an increase in volumes to 450,000 tonnes
of grain crushed in 2016. With 120,000 tonnes sold
in 2016, biodiesel sustained its progress and saw the
development of growth opportunities throughout the
region. The production of oilseed meals for livestock
feeds reached 200,000 tonnes, thus contributing
50% to the needs of Romanian livestock farmers
for vegetable proteins.
DIVERSIFICATION OF
THE PORTFOLIO
In Oils & Condiments, Expur maintained its commercial
positions, with 100 million liters of sunflower oil produced
in 2016, 95% of it bottled. The development of bulk
supplies for professionals in the agri-food and out-of-
home dining sectors saw excellent growth, increasing
by nearly 30%. As for Untdelemn de la Bunica, work on
renovation, diversification and brand upgrading bore fruit
(see opposite). This is continuing in 2017, with significant
growth of the export volumes sold, notably towards
the Middle East. In parallel, Expur, working in synergy
with Lesieur Cristal, is working on introducing an olive
oil called Zagora onto the Romanian market. In B-to-B,
the diversification dynamic initiated by Expur forms an
integral part of the new Avril Oil & Ingredient Solutions
commercial platform set up by the Oilseeds Processing
Business Line. The aim is to benefit from synergies
within Avril in order to offer vegetable oils, specialty
oils and high quality functional ingredients that will
meet the needs of its customers.
2016 as seen by Pascal Pinson, General Manager of Expur
Bunica confirms
its leadership
Leader in edible oils in Romania, Untdelemn
de la Bunica saw its sales increase in a
market that was nevertheless declining,
to reach record levels: 14 million liters were
sold in 2016, versus 13 million a year earlier,
thus confirming the brand’s leadership in
Romania. This success was made possible
by the complete renovation of its product
ranges and the launch of major innovations
breaking with the habits of Romanian
consumers who previously tended to
prefer sunflower oil. A vitamin D-enriched
sunflower oil and a special frying oil
were thus put on the market successively
during the past two years. This dynamic
is continuing with the launch of the Zagora
olive oil brand and an ambitious program
for innovations under the Untdelemn de la
Bunica brand, underpinned by a marketing
and media plan equal to Expur’s ambitions.
ACTIVITIES
56 57
AVR IL — ACTIVITY REPORT 2016
LESIEUR CRISTAL EXPANDS
ITS EXPORT POTENTIAL
With a portfolio of strong heritage brands in Morocco
(Lesieur, Al Horra, Huilor, El Kef, Taous), Lesieur Cristal
confirmed its leadership in the edible oils and soaps markets.
Its business model, based on a strategy of innovation and
diversification, now largely exceeds the frontiers of Morocco.
Lesieur Cristal had to deal with difficult climatic and economic
conditions in 2016. The year was marked by a particularly
severe episode of drought which had repercussions for
both agricultural production and consumption levels in rural
populations. In this context, Lesieur Cristal nevertheless
succeeded in sustaining its product innovation efforts, while
increasing its growth at export. Structuring innovations were
thus introduced, and notably a range of Taous shampoos,
an extra virgin Al Horra olive oil and a powdered El Kef
household soap sold in dose sachets. This latter product,
a real success in Sub-Saharan Africa, contributed to
considerable growth in export sales of +14% in 2016, all market
segments taken together, thus confirming Lesieur Cristal’s
leadership in North and Sub-Saharan Africa. For 2017,
the company will be focusing on its role as an aggregator
for upstream agriculture, developing its innovation pipeline
and pursuing the conquest of new international markets,
with plans for the USA, Egypt, Ivory Coast and Nigeria.
PERSONAL CAREER
DEVELOPMENT CENTRAL TO
THE COMPANY’S SUCCESS
The subsidiary stood out once again in 2016 for its
commitment to HR innovations and to the career development
of its staff. The accident rate (TF2) fell by 50% in 2016,
enabling Lesieur Cristal to receive first prize in the Moroccan
Accident Prevention Awards for major companies. In parallel,
the “Live my life” operation enabled 40 employees from
different departments to discover, each week for three months,
the lives of their commercial colleagues and thus offer their
support. Another important action concerned “Lesieur Cristal
has talent”, an event which enabled all employees to visit
stands dedicated to the company’s innovations. The company
was also involved in shared initiatives in the context of the
“Performance Challenges” and the “Nourrir la Vie” (“Food
for Life” management program, which each year assemble Avril
employees around an in-house challenge and initiatives that
are simple to replicate and thus drive progress in
the community.
2016 as seen by Samir Oudghiri Idrissi,
General Manager of Lesieur Cristal
Lesieur Cristal, a driver
in relaunching the
oilseed and olive sectors
Since 2013, Lesieur Cristal has been
working alongside the Avril Group to exploit
cultivable land in the context of the Green
Morocco Plan. Its actions to support an
aggregation system involving 900 farmers
enabled an increase in the land sown to
sunflower and rapeseed – almost inexistent
in Morocco in the early 2010s – to more
than 50,000 hectares in 2016. The aim
is to reach 130,000 hectares in 2020,
two-thirds sown to sunflower, with sectors
structured from upstream to downstream.
A dynamic that is contributing to the
vegetable protein independence of
Morocco livestock farmers, thanks to
the concomitant production of oilseed
meals. The olive sector saw the same
mobilization, its revitalization forming
part of an aggregation program involving
more than 200 farmers (500 between
now and 2020) and centered on
sustainable agriculture. Lesieur Cristal
now owns three major olive groves
(more than 350,000 olive trees planted
on 1,500 hectares) and has equipped itself
with a crushing unit with a capacity of
12,000 tonnes at the El Kelaâ des Sraghna
site near Marrakech. The long term
objective is to fulfil 40% of Lesieur Cristal’s
olive oil needs.
ACTIVITIES
58 59
AVR IL — ACTIVITY REPORT 2016
Oleochemicals
A diversified model that creates value
In the adverse environment of 2016, with its activities
threatened by falling petroleum prices, Oleon nevertheless
confirmed its strategic choices: to diversify its portfolio
towards applications with high added value, to strengthen
its knowledge of markets and customers and to invest
in research to prepare the future.
6sites in Europe
and Asia
€632 M
turnover
More than
€10 M
spent on R&D
ACTIVITIES
60 61
Breakdown
of turnover 2016
Europe
Asia
North America
76%13%
11%
CONSIDERABLE CAPACITY
FOR RESILIENCE
A major actor in renewable chemistry, Oleon develops,
manufactures and sells biosourced molecules based on
vegetable oils and fats. Its ambition is to be among the global
leaders in its specialty by consistently offer more added
value to its customers. In the unfavorable macroeconomic
environment of 2016, Oleon achieved a good performance
that demonstrated the resilience of its business model.
By triggering a halt to oil drilling throughout the world,
and particularly in the USA, the fall in petroleum prices had
a serious impact on a major market for Oleon specialties.
It also contributed to intensifying competition between
molecules of fossil origin. To remain competitive, Oleon strives
constantly to improve its productivity by controlling energy
consumption, reducing waste losses and optimizing the supply
chain, etc. This program for continuous improvement, adopted
by all entities in the Group, enabled some major savings.
This is an important advantage if we are to better resist
the strong competition that characterizes the sector, notably
in terms of commodity products such as certain fatty acids.
CONTINUING TO DEVELOP
SPECIALTY PRODUCTS
To reduce its vulnerability to market fluctuations, create more
added value and improve its customer retention rate, Oleon
has for some years chosen to develop more technical products.
This policy has been implemented in both specialty products
and commodities, such as vegetable glycerin, whose quality
and level of purity – certified by numerous bodies – offer
opportunities for new and challenging applications. This is
one of the vocations of the new glycerin packaging facility
that opened in Venette, near Compiègne, in early 2016. With
a design that ensures appropriate environment conditions,
with air treatment and a contained filtration room, it complies
with pharmaceutical and food industry guidelines that
are extremely stringent with respect to hygiene. Another
opportunity to create value is to develop applications driven
by a brand strategy. Oleon has increased its presence
at professional events and fairs, in order to publicize its
know-how and innovations. For example, Jolee®
, a range
of innovative emollients for the cosmetics market, was
presented at the In-cosmetics show in Paris (see opposite).
With some twenty patents filed each year, Oleon still makes
major investments in R&D on both its standard products and
on more innovative processes such as biotechnologies. 2017
promises to be an important year for innovations in this field.
The birth of Jolee®
Presented at the In-cosmetics show
in Paris, Jolee®
is a new Oleon Health
& Beauty brand in its Radia®
range.
Jolee®
molecules have multifunctional
properties that are also designed to
facilitate the work of formulators because
they can be used under cold conditions.
This initiative illustrates the strategy
adopted by Oleon Health & Beauty to give
new impetus to its products and solutions:
to focus on specialties while proposing
innovative applications developed
by Oleon’s formulation experts.
MOUSSA NACIRI
General Manager of the Oleochemicals Business Line
In contrasting and unstable
markets, our model will only
remain resilient through
continuing improvements to
our industrial performance,
the broad diversity of our
activities and markets and
very close proximity with
our customers and partners.
PUB oleon
Jolee,
Oleon Health and Beauty’s
new top brand. Meet her at:
www.oleonhealthandbeauty.com
®
Natural emollients
& emulsifiers with
multifunctional
and sustainable
benefits.
AVR IL — ACTIVITY REPORT 2016
Animal nutrition
Defending the values
of French livestock production
In a difficult context for livestock production, Sanders stayed
on course by addressing two challenges: pursuing
its development in a declining animal nutrition market
and contributing to consolidation of this market in order
to gain competitiveness for French sectors.
P 675 C P 280 C C 21 / M 100 / J 0 / N 0 C 100 / M 100 / J 0 / N 22 R 195 /V 0 / B 123 R 0 /V 54 / B 124
28sites, 25 of them
in France
€1.1 Bn
turnover
3.4 M
tonnes of feed produced
using Sanders techniques
ACTIVITIES
64 65
CONTRIBUTING TO MARKET
CONSOLIDATION
In 2016, the animal nutrition market in France experienced
an historic decline of 4.8% or a drop of nearly one million tonnes
of feed in volume terms. This downturn exceeded 10% in the
ruminants market, and notably dairy herds that were penalized
by milk prices. With sales prices lower than their costs, numerous
dairy farmers simply ceased production. To this difficult context
was added a health crisis that affected duck production in
south-western France. Despite these adverse conditions,
Sanders managed to sustain its volumes thanks to both the
alliance signed in 2015 between Avril and the LDC poultry group,
and to the policy on industrial contracts introduced four years
previously with local partners, such as the cooperative groups
Agrial in Brittany or Euralis in the south-west. These agreements
are designed to develop processing activities in order to pursue
investment, modernize factories and gain in competitiveness
for French sectors. In 2016, Sanders acquired from Euralis the
company Nutripalm, specialist in the manufacture of feeds
for farmed livestock, and notably ducks bred and fattened
in south-western France. Other acquisitions are also planned,
with the same objective of consolidating the market.
DAILY SUPPORT FOR BREEDERS
Difficult periods also provide an opportunity to develop
closer ties. By launching Pacte 360° on the ruminants market,
Sanders can offer a new dimension for its technical sales
teams. The aim is to help breeders produce better with
ABERA – Almost 30 pork producers and farmers, members of the 100% French quality label “Engagés dans l’Élevage” and customers
of Sanders Bretagne and Sanders Ouest, visited Abera.
Towards the
Sustainable Health
Management of
livestock units
In adverse economic and health contexts,
Sanders placed its expertise and that
of its partners in the Sustainable Health
Management of livestock units, at the
service of French producers. The goal
is indeed considerable: to reduce the
consumption of antibiotics in livestock
units in order to respond to demands from
society and assure a long-term future for
the sector. Sustainable Health Management
(SHM) is based on a broadened vision
of livestock farming and focuses on five
pillars: the secure management of livestock,
a balanced diet that favors the development
of immunity, biosecurity, the use of natural
alternatives and sustainable medication.
To implement this approach, Sanders
depends on the training of its teams
and the close involvement of its partner
livestock farmers.
GB_AVRIL_ra_170x240_BAT.indd 65GB_AVRIL_ra_170x240_BAT.indd 65 15/06/2017 12:4315/06/2017 12:43
BERNARD MAHÉ
General Manager of the
Animal nutrition Business Line
As the leader in animal
nutrition in France, Sanders
displays its commitment
through important efforts
regarding the sustainable
health management of
livestock units. Our ambition
is to support breeders in
adding value to their products
and satisfying the demands
of consumers.
66 67
less, and to enhance their performance through tailor-made
support. The principle of Pacte 360° is to propose a full
diagnosis of a livestock unit and identify levers that could
improve profitability, after which a progress plan is put in
place with the farmer. To support these recommendations,
technical datasheets have been compiled with MiXscience
which contributes its scientific know-how in animal nutrition
and health. This consulting approach is based on Sanders’
historical expertise in livestock management and on the close
links between technicians and breeders. In 2017, a challenge
will reward the best Pacte 360° operations.
ADDING VALUE TO SUSTAINABLE
PRODUCTION MODELS
One of Avril’s challenges in the animal sectors is to contribute
to developing a sustainable production model that associates
all links in the value chain. The aim is to provide consumers
with products that are guaranteed in terms of animal welfare
and nutritional quality, as well as ensuring a source of income
for farmers. Based on its “Nourrir nous engage” (Food is our
commitment) signature, Sanders is a key player in this approach,
which in 2016 was illustrated by several highlights. First was
the success of the first sector of excellence, “Engagés dans
l’élevage” (Committed to Livestock) which was created in
partnership with Fleury Michon: the pigs are fed a non-GMO
diet of French cereals and raised without antibiotics as from
the end of weaning (the aim between now and 2020 being
to achieve zero antibiotics as from birth). This exclusive sector
already involves 41 enthusiastic breeders who are wholly
dedicated to this production (155,000 pigs), in five French
departments. Thanks to the commitment of all partners, ham
bearing the “J’aime - Engagés dans l’élevage” (I like – Committed
to Livestock) label has become the ham that is preferred by the
French*. For three years, Sanders has been developing a global
approach to livestock management in its sectors – Sustainable
Health Management – in order to reduce the use of antibiotics.
Boosted by the results to date, the brand is now seeking to
promote these good practices to a maximum of breeders (see
opposite). Similarly, in partnership with teams from MiXscience
and Theseo, 200 technicians and veterinarians have worked
together on the theme of water control as a tool for the
technical and health management of livestock units. Finally,
Sanders was one of the first signatories of the Duralim Charter,
a collective approach to improving the sustainability of livestock
feeds, designed to underpin consumer confidence in agriculture
and food.
* UFC-Que Choisir survey of 30 ham products (June 2016).
The international
presence of Sanders
2016 saw the opening of the new SIM
Sanders cattle feed production plant in
Algeria. It has already reached saturation
point, and planned work on its enlargement
will enable it to increase production from
70,000 to 120,000 tonnes. Sanders
produced 100,000 tonnes of feed in 2016
at its international sites, with excellent
results in Algeria and Serbia.
“Engagés dans
l’élevage”: a sector of
excellence that has
proved its worth
In the “Engagés dans l’élevage/J’aime”
(Committed to livestock/I like) sector
of excellence, relationships with breeders,
and the know-how they can contribute,
are crucial. We have long been committed
to an approach free of antibiotics and GMO
feeds, because quality is essential if we are
to add value to our products. In the context
of our partnership with Avril and Fleury
Michon, we know to whom we are entrusting
our animals. We know what will happen
to them and we are also sure that our work
on quality is respected throughout the value
chain. That makes us very proud.
ROLAND LEFEUVRE
Pig breeder in the Côtes-d’Armor region
AVR IL — ACTIVITY REPORT 2016
Avril Animal Specialties
Conquering new markets
Driven by a clear vision and ambitious development strategy,
the most recent Business Line in Avril’s animal sectors achieved
some concrete advances for the future, notably with respect
to innovation and international reputation.
€134 M
turnover
80% nutrition-health
15% biosecurity
5% liquid supplements
12units operating
in 7 countries
ACTIVITIES
Activity Report Group Avril 2016
Activity Report Group Avril 2016
Activity Report Group Avril 2016
Activity Report Group Avril 2016
Activity Report Group Avril 2016
Activity Report Group Avril 2016
Activity Report Group Avril 2016
Activity Report Group Avril 2016
Activity Report Group Avril 2016
Activity Report Group Avril 2016
Activity Report Group Avril 2016
Activity Report Group Avril 2016
Activity Report Group Avril 2016
Activity Report Group Avril 2016
Activity Report Group Avril 2016
Activity Report Group Avril 2016
Activity Report Group Avril 2016
Activity Report Group Avril 2016

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Activity Report Group Avril 2016

  • 2.
  • 3. CONTENTS 2 • Profile 4 • A Group with a sectoral structure 6 • Joint interview with Jean-Philippe Puig and Arnaud Rousseau 8 • Governance 12 • Financial performance 13 • Key figures 18 • Avril’s challenges 20 • Avril 2020: change to enhance our commitment 22 • A strong and competitive Group in its markets that listens to customers 26 • A resolutely international Group set to conquer new markets 30 • Innovation to drive the creation of sustainable value 34 • People committed to serving a federative company project 40 • Sofiprotéol 46 • Oilseeds Processing 52 • Oils & Condiments 60 • Oleochemicals 64 • Animal nutrition 68 • Avril Animal Specialties 72 • Animal precessing 78 • Avril Development 82 • Financial informations OVERVIEW OF ACTIVITIES INTRODUCTION 2016 ESSENTIALS
  • 4. AVR IL — ACTIVITY REPORT 2016 Avril, a collective dynamic 7,200employees €5.9Bn turnover in 2016 21countries OUR MISSION Creating sustainable value in the oils and proteins sectors, thus contributing to better food for humans and preservation of the planet. OUR ORIGINALITY The Avril Group was born of a collective approach. It was set up in 1983 at the initiative of farmers in order to develop the French production of oilseeds (rapeseed, sunflower, olive, soybean, etc.) and protein crops (pea, field bean, lupin, etc.). By federating all actors in these sectors and developing their markets, in a little more than 30 years Avril has become a major industrial and finance group, active in France and internationally in sectors as diverse as agri-foods, livestock nutrition and expertise or renewable energies and chemistry, owning a portfolio of market brand leaders such as Sanders, Lesieur, Puget, Matines, Diester® , Bunica, Taous… The Group has grown, and still operates, according to an original model: a sectoral organization, from grain to processed products, where each activity creates value for all links in the chain. To drive this model, Avril builds on the complementarity of its two core skills: industrial activities organized around plants and animals, and investments through Sofiprotéol, its finance and development arm. The originality of this model thus makes Avril a singular Group characterized by a well-established shareholder base, strong agricultural and territorial roots and the systematic reinvestment of all profits in the development of national sectors in all the countries in which it operates.
  • 5. NEARLY ONE THIRD OF TURNOVER ACHIEVED INTERNATIONALLY IN 2016 2 3 GLOBAL BREAKDOWN OF EMPLOYEES IN 2016 STRONG TERRITORIAL ROOTS IN FRANCE 1% Americas 15% Africa 3% Asia Industrial sites Commercial offices 81% Europe 84sites in the world of which: 29 sites in oilseed sectors 55 sites in animal sectors 44 sites in animal sectors 15 sites in oilseed sectors Réunion Island
  • 6. AGroupwitha sectoralstructure, fromgraintothe processedproduct Avril draws strength from its original sectoral organization that combines the excellence of French agriculture and industry. This organization was set up in the early 1980s, in response to a US embargo on soybean exports and emerging proof of the dependence of our agriculture with respect to vegetable proteins. Rapeseed producers thus mobilized their forces to set up a French oilseeds and proteins sector that could restore the country’s independence. Farmers from all French regions, working through Sofiprotéol, thus contributed to the construction of an industrial and finance group that could assure long-term and sustainable markets for their harvests. Avril was born. Through this exemplary commitment, they created conditions for the emergence of new opportunities to valorize their products, such as rapeseed for biodiesel, an innovation initiated by French agriculture. Thanks to this renewable energy, called Diester® , the rapeseed meals cultivated throughout France now represent one of the principal sources of proteins for livestock farms. And thanks to their pioneering and entrepreneurial vision, they built a model centered on creating shared value for all actors in the sector – all closely intertwined throughout French territories and beyond, in all the countries where the Group operates. From grain to processed products, from human foods to livestock feeds, and not forgetting expertise in livestock management, renewable energies and plant chemistry.
  • 7. Collection of oilseed and protein grains Involvement of Sofiprotéol, finance and development company Seeds, biotechnology; other inputs and services 100,000 agricultural producers Crushing Food Food Renewable energies Animal nutrition, Biosecurity Proteochem® GB_AVRIL_radd_170x240_rabat_BAT.indd R2-4GB_AVRIL_radd_170x240_rabat_BAT.indd R2-4 15/06/2017 12:4815/06/2017 12:48
  • 8. Collection of oilseed and protein grains Involvement of Sofiprotéol, finance and development company Seeds, biotechnology; other inputs and services 100,000 agricultural producers Crushing Food Food Renewable energies Animal nutrition, Biosecurity Proteochem® GB_AVRIL_radd_170x240_rabat_BAT.indd R2-4GB_AVRIL_radd_170x240_rabat_BAT.indd R2-4 15/06/2017 12:4815/06/2017 12:48
  • 9. Genetics and animal health, other inputs and services Oleochemicals Milk, meat Poultry Livestock farmers Eggs, pork GB_AVRIL_ra_170x240_BAT.indd 5GB_AVRIL_ra_170x240_BAT.indd 5 15/06/2017 12:4215/06/2017 12:42
  • 10. AVR IL — ACTIVITY REPORT 2016 What is your assessment of 2016? A. ROUSSEAU: For the second year running, Avril had to deal with a difficult economic context. The convergence of several factors unfavorable to its primary activities damaged its results: the collapse of petroleum prices, poor rapeseed harvests, very low milk prices and changes affecting customer demand for shell eggs. J.-P. PUIG: In this context, some of our entities nevertheless managed to break records for growth, such as Sofiprotéol, Bunica, Abera, Sopral and Terrial. Despite a downturn in income we held our course, investing more than in 2015. We also pursued our recruitment plan: 200 new managers in 2016, 20% of them arising from internal mobility. You changed the Group’s organization; for what purpose? J.-P. PUIG: Our aim was to simplify our managerial organization and broaden the scope of the Comex so that our decision-making could be more rapid and operational managers could react accordingly. This has been a success. Our Group is still in its consolidation phase, and this year saw further structural advances in the implementation of common management tools and the modernization of our information systems. All these projects take time. 2017 should mark a real turning point in this respect. What is your assessment just a year after launching the Avril 2020 strategic plan? J.-P. PUIG: We made progress in all areas. By improving our cost structure, we achieved further savings. Another reason for satisfaction was the improvement in our customer relations, Guided by its new strategic plan, Avril is pursuing its transformation in a difficult economic context. The structural advances achieved in 2016 have laid future foundations for a Group that remains loyal to its mission. A critical analysis by Jean-Philippe Puig, CEO of Avril, and Arnaud Rousseau, Chairman of Avril Gestion. JEAN-PHILIPPE PUIG CEO of Avril We have enhanced our relations with customers and developed partnerships that will allow us to better exploit the advantages of our sectoral organization. Combining resilience and long-term vision
  • 11. 6 7 with partnerships enabling us to better valorize our know-how. I would mention two initiatives whose success exceeded our expectations: the high-quality pork sector developed with Fleury Michon, and the joint enterprise with AVF which means that Avril is now making an active contribution to ensuring that French pork will return to our supermarket shelves. We also made progress in developing our international activities, with some important projects offering real opportunities for the future. We now aim to further accelerate efforts in this area. A. ROUSSEAU: Avril and our sector were also very active in terms of innovation. The Group’s approach was particularly audacious in proteins, developing real market opportunities for agricultural producers. The birth of Evertree in Proteochem® (protein chemistry) is a good illustration, and there are also interesting prospects in foods. Our crops that supply vegetable proteins have a key role to play in our future diet. How have Avril’s employees felt about this period of transformation? J.-P. PUIG: I would like to extend my thanks to all our colleagues who have invested so much energy in these efforts over the year. The success of the employee shareholder plan, launched in 2016, testifies to their commitment and demonstrates the trust our teams have in the future. We also set up a Comex for young people which offers us a very interesting viewpoint, working notably on topics such as the digital revolution or the organization of work at the future Avril Campus, which will open in July 2018 in Bruz, near Rennes. In my opinion, this is highly symbolic of Avril’s identity: an innovative, sustainable and open-minded group which welcomes the views of its teams and maintains close links with the farming world. How is 2017 looking? A. ROUSSEAU: 2017 will be a turning point with some important milestones, notably regarding the future of the biodiesel market. We remain confident because we benefit from some major advantages. Working together, we shall be able to exploit the pertinence of our approach and the strength of our sectoral model in support of France’s farm. J.-P. PUIG: This year has started much better. Thanks to the stabilization of crude oil prices, our biodiesel activities have resumed growth. We are pursuing our development and transformation, with three priorities for 2017: 1. Security; 2. Customers; 3. Economic performance. Avril Gestion has a new Chairman. What will his role be? A. ROUSSEAU: Loyal to the legacy of Xavier Beulin, with all the Administrators and in continuity of the Avril 2020 plan, my mission is to support the Group’s main strategic orientations. And in line with the principles that guided its creation, to cultivate the strong links that federate farmers in our sectors and Avril’s talents around common plans for the future, which have already demonstrated that in an open economy and in direct response to market fluctuations, there is strength in unity that can broaden the scope for opportunities. I also want to emphasize the value and transmit to new generations the highly original nature of Avril, its agricultural roots and its mission to act in the interests of all. Working together, we shall be able to exploit the pertinence of our approach and the strength of our sectoral model in support of France’s farm. ARNAUD ROUSSEAU Chairman of Avril Gestion
  • 12. AVR IL — ACTIVITY REPORT 2016 7 BUSINESS LINES OILSEEDS PROCESSING ANIMAL NUTRITION AVRIL ANIMAL SPECIALTIES ANIMAL PROCESSING OLEOCHEMICALS AVRIL DEVELOPMENT TERRES UNIVIA FIDOP EMPLOYEES FOP OILS & CONDIMENTS Collegial governance with strong agricultural roots XAVIER BEULIN, AN IMPORTANT LEADER IN AGRICULTURE Xavier Beulin died suddenly on 19 February 2017, at the age of just 58 years. He had been Chairman of the Avril Group since 2000. Involved from an early age in agricultural unionism, he steadily climbed the ladder to become Chairman of the FOP in 1999, and then of the FNSEA. We remember a profoundly committed man, a lover of the land and a visionary, who worked unceasingly to develop French farming. He was a central driving force behind the Avril Group, giving it the stature of a national leader.
  • 13. The Board GOVERNANCE FORGED FOR THE FUTURE In 2015, Avril equipped itself with a new governance structure and the status of a limited partnership with share capital (Société en Commandite par Actions, SCA). This structure can separate the power of shareholders (the limited partners or associés commanditaires which include the FIDOP(3) , FOP(4) and the Fondation Avril, recognized as a public utility) from that of the manager (Avril Gestion, the general partner or associé commandité). This helps to ensure that the founder shareholders in the Group remain central to its growth strategy. The partners work through a Supervisory Board with eight members, who include two staff representatives from the Avril Group, elected by their peers. This Board is chaired by Antoine Henrion, who is also Chairman of Terres Univia(5) . The Board of Avril Gestion appoints the manager of the SCA and decides upon the major strategic and financial orientations of the Avril Group. This Board comprises nine members: four from the FOP, three qualified personalities and two former CEOs or corporate officers of the Group. In February 2017, the Officers of Avril Gestion elected Arnaud Rousseau to serve as the Chairman of its Board. (1) Agropol: Interprofessional Association for Promotion and International Cooperation of the French Vegetable Oils and Proteins Sector. (2) Terres Inovia: Technical Institute for Oilseed Crops, Grain Legumes and Industrial Hemp. (3) FIDOP: Interprofessional Development Fund for the Oilseeds and Proteins Sector. (4) FOP: French Federation of Oilseed and Protein Crop Producers. (5) Terres Univia: Interprofessional organization for oilseeds and protein crops. 8 9 BERNARD DE VERNEUIL Member of the Board and Administrator of the FOP PIERRE PRINGUET Vice-Chairman of Pernod Ricard ARNAUD ROUSSEAU Chairman of Avril Gestion, Chairman of the FOP JEAN-PIERRE DENIS Chairman of Crédit Mutuel Arkea and Crédit Mutuel de Bretagne SÉBASTIEN WINDSOR Vice-Chairman of the FOP and Chairman of Terres Inovia(2) SYLVIE RUCAR Consultant GÉRARD TUBÉRY Chairman of Agropol(1) ANNE LAUVERGEON CEO of ALP Services and Chair of Sigfox ALAIN MIROT Former CFO of Sofiprotéol
  • 14. AVR IL — ACTIVITY REPORT 2016 1 - PAUL-JOËL DERIAN Research, Innovation, Development Vice-President (VPRID) 2 - PHILIPPE LAMBLIN Human Resources Vice-President (VPHR) 3 - STÉPHANE YRLÈS General Secretary 4 - YVES DELAINE Deputy CEO 5 - BERNARD MAHÉ General Manager of the Animal nutrition Business Line 6 - MOUSSA NACIRI General Manager of the Oleochemicals Business Line 7 - MICHEL BOUCLY Deputy CEO 2 51 74 63 The Executive Committee
  • 15. 10 11 8 - JEAN-PHILIPPE PUIG Chairman and Executive Officier (CEO) 9 - OLIVIER DELAMÉA General Manager of the Oils & Condiments Business Line 138 12109 11 10 - JEAN-BAPTISTE BACHELERIE General Manager of the Oilseeds Processing Business Line 11 - AYMERIC MONGEAUD Chief Financial Officer (CFO) 12 - GABRIEL KRAPF Industrial and International Development Vice-President (VPIID) 13 - ÉRIC PHILIPPE Deputy CEO To support changes to the managerial structure, the Executive Committee was extended on 1st January 2016 to include the Group’s main business lines and the Innovation Division. It also welcomed two new members in 2017: Olivier Delaméa, General Manager of the Oils & Condiments business line, and Paul-Joël Derian, Director of Research, Innovation & Development.
  • 16. AVR IL — ACTIVITY REPORT 2016 Deciphering the year Despite a market context that was unfavorable to most of its activities in 2016, the Group maintained its strategic course in line with the Avril 2020 plan. It intends to sustain this momentum in 2017 so as to accelerate its transformation. herds. Animal activities were also hit hard by the extremely rapid evolution in consumption modes, a good example being the egg branch, where farmers were forced to commit to introducing “alternative” methods to battery cages, and have struggled ever since. On its side, the poultry sector pursued its consolidation, in line with the industrial structuring actions completed with success during the previous two years. Although our recapture of the domestic market is now under way, exports were still faced with fierce competition, and repeated outbreaks of avian influenza had serious impacts on certain products. In the pig branch, 2016 saw an improvement in market indicators, and a rise in selling prices. The efforts made to ensure the differentiation of French pork in terms of quality, and its return to the shelves of supermarkets, started to bear fruit. On the plant side, although arable – and particularly cereal – harvests in the Black Sea region, USA or Argentina were very abundant, French famers experienced their worst wheat harvest for 40 years, mainly because of unfavorable weather conditions. Unlike their European competitors, French oilseed harvests What is your analysis of 2016? A. M.: After a difficult year in 2015, we had to deal with a further deterioration in our environment. Nearly all our activities suffered from a combination of unfavorable factors. Prices of raw materials, as well as marked volatility, squeezed our margins. In particular, the fall in petroleum prices, down to almost $27 in February – its lowest level for 12 years – penalized biodiesel. In parallel, our commercial negotiations with major retailers in 2016 did not allow us to pass on abrupt rises of up to 16% that notably affected the prices of rapeseed and olive oils. The “price war” and repeated demands from retailers for deflation worsened this situation, highlighting a profound gap with economic reality in the sector. Finally, the unprecedented crisis that affected our sectors spread to involve all parts of French agriculture, which had repercussions on our activities. How were the group’s activities affected? A. M.: Animal sectors remained in the front line of the crisis affecting farming. In the wake of the end of milk quotas, falling milk prices and increased competition within Europe had serious effects on livestock breeders, who reduced their AYMERIC MONGEAUD CFO of the Avril Group, Deputy CEO of Sofiprotéol
  • 18. AVR IL — ACTIVITY REPORT 2016 Investments €207M invested in 2016, including: €38 M of investments devoted to the Group’s information systems €73 M of industrial investments in oilseeds sectors €42 M of industrial investments in animal sectors €54 M of investments by Sofiprotéol, the finance and development company
  • 19. reached record levels and the scope of its activities broadened to new sectors, such as milk and ingredients. What do you anticipate for the future? A. M.: With equity reaching €1.78 billion and a debt level that remained low and under control, the Group benefited from financial solidity that allowed it to sustain its level of investment, essential to consolidating its business model, the competitiveness of its industrial facilities and achieving the goals laid out in Avril 2020. In this context, the Group raised €880 million in 2016 through a deal club centralized by its holding company and a program for the securitization of customer debts, the latter being important because it secured the funding of our strategic plan and confirmed the confidence of our financial partners. This operation also enabled the Group to accelerate its transformation to achieve operational excellence and the modernization of its infrastructures, processes and information systems, the first practical results of which were seen in 2016: the creation of a Performance Monitoring Division, the gradual deployment of SAP solutions to all our entities, and the grouping of all accounting teams in a shared services center (SSC) which started by welcoming payroll staff in early 2016. – and notably those of rapeseed – were disappointing, which caused an increase in the use of imported grain. As a result, our crushing margins shrank under the triple effects of lower yields, higher grain prices and stronger competition. How did the Avril Group perform in 2016? A. M.: Turnover was slightly down, at €5.9 billion, and the Ebitda fell to €143.8 million. The first six months were problematic, but the year nevertheless benefited from a marked upturn during the final quarter. However, net results were severely impacted by a depreciation of assets in our crushing, refining and esterification activities, and in the shell egg branch, and reached minus €51.6 million. In this particularly adverse market environment affecting all our activities, these figures illustrate the resilience of the Group and fully validate the pertinence of our strategic plan, Avril 2020. The main objectives are therefore to: ● reduce the exposure of our industrial activities to external risks, notably by developing the growth of our specialty products with global markets; ● pursue the dynamic of activities by the finance and development company, which achieved excellent performances as both an investor and financial manager in 2016. Its commitments The Group benefited from financial solidity that allowed it to sustain its level of investment, essential to consolidating its business model. 14 15
  • 21. Driven by a long-term vision built on forward planning, Avril’s ambitions for 2020 focus on four strategic areas. A review of progress in 2016.
  • 22. AVR IL — ACTIVITY REPORT 2016 ESSENTIALS Avril’s challenges Loyal to its mission – to contribute to better foods for humans and preservation of the planet – Avril is positioning the future of the oils and proteins sector in order to respond to the major food, environment and societal issues of the 21st century. Meeting protein requirements – in France, Europe and throughout the world To feed a population that will reach more than 8.4 billion in 2030, the contribution of vegetable proteins is becoming a major issue. Protein requirements are likely to increase by 40% between now and 2030* because of two trends: the increasing enthusiasm in developed countries for vegetable proteins as an alternative to meat, and marked growth in the demand for meat linked to rising living standards in emerging countries. To respond to this dual challenge, Avril’s strategy is to increase its production of protein-rich oilseed meals for use as livestock feeds, and to develop new processes and products for vegetable proteins that can be used for human foods. Solving the food- climate equation How to feed the planet while reducing the impacts of climate change on natural resources is one of the principal challenges faced by agricultural sectors in the future. Africa is emblematic of this problem, combining important demographic growth with intense exposure to climate change. The structuring of strong sectors, from agriculture upstream to industry downstream, and the sharing of know-how in the context of trusting partnerships, both constitute practical and constructive responses to this challenge. The aim is to facilitate the response of local sectors to the needs of their markets and consumers, while at the same time implementing integrated agricultural and livestock practices that are coherent with their environment. A commitment to respond to demands from society Health and environmental issues are affecting the eating habits of our societies. Consumers are now aware of the origin of products, their traceability and natural sourcing. Producing better with less, consuming responsibly and favoring local sectors have become central values, as have animal welfare or the sustainable health management of livestock units. Because of its integrated sectors and strong territorial roots, the Avril model can play a structuring role in the response to these expectations: by establishing the link between grain and finished products, by developing livestock sectors where traceability is totally controlled and by supporting farmers and livestock breeders to adapt their production to these new challenges. * BIPE survey – Avril Group, 2014
  • 23. MICHEL BOUCLY Deputy CEO 18 19 The future of our sectors is based on a global vision of plants and a balanced exploitation of their two by-products: oils and proteins. We must continue to develop markets for these two inseparable resources that will benefit to all our regions.
  • 24. Avril 2020: change to enhance our commitment To assure a long term future for its activities, develop new markets and better respond to the demands of its customers, Avril is pursuing and accelerating its transformation into an ever more competitive, diversified, international and innovative group. It will continue to operate these levers so it can take up the challenges of today and the future. ACCELERATING GROUP TRANSFORMATION A year after its initiation, the pertinence of the Avril 2020 strategic plan has been wholly validated. The problems encountered by commodities trading, subject to fluctuations in raw materials prices, have necessitated an acceleration of its deployment. This plan aims to address to two essential priorities: first of all, to further improve operational excellence so that the Group will be better prepared, more competitive and more flexible in an unstable economic environment. In this respect, the consolidation initiated four years ago has enabled some major advances, and this progress is ongoing. The second challenge is to find new opportunities for growth. This involves greater focus on specialty products with high added value, and the development of brands and international activities. In all these areas, decisive milestones were reached in 2016. In plant sectors, where first-stage processing has evolved towards product diversification for global industrial customers, and in livestock sectors, thanks to two major acquisitions: Salus in Brazil, which offers the Group access to the third largest global market in livestock feeds, and Ewabo in Germany, which means that Avril has become European leader in livestock unit biosecurity. Pivotal to these changes has been the Group’s focus on customers. Avril has shifted from a supply approach, driven by its mission to exploit agricultural markets, to a customer-driven demand culture, designed to better adapt its sectors to their expectations. A good example is the initiative that has enabled the return of 100% French pork to the shelves of Lidl, thus benefiting both livestock farmers and local employment. REAFFIRMING ITS VOCATION While looking to the future, Avril nevertheless remains loyal to its founding principles: to reduce the dependence of French sectors, notably with respect to vegetable proteins which are an essential component in livestock feeds. Protein remains central to the Group’s strategic orientations regarding a new growth area: human foods. Avril made considerable progress in 2016 through advances in its research programs, notably regarding the utilization of rapeseed and sunflower proteins in agri-food markets. It is the same commitment to vegetable proteins which led the Group to mobilize its forces in favor of a sustainable and 100% French soybean sector, which by definition is non-GMO. In 2016, this resulted in plans for the first processing unit to produce pig feeds for south-western France (see opposite). AVR IL — ACTIVITY REPORT 2016 ESSENTIALS
  • 25. 20 21 A SUSTAINABLE AND 100% FRENCH SOYBEAN SECTOR Having contributed to revitalizing the French soybean sector, with more than 144,000 hectares planted in 2016, Avril is pursuing its efforts to organize the sector. It is working with the Carrefour Group, the Euralis cooperative group, FIPSO and Sanders-Euralis which have all signed a partnership agreement on the creation of a long-term program for the production of 100% French soybean. Within this context, the mission in 2017 for Sojalim, the Avril/Euralis joint enterprise, will be to operate a processing plant for non-GMO French soybean in Vic-en-Bigorre (Hautes-Pyrénées). Turned into oilseed meal, this soybean will be used to feed pigs reared in the south-west by breeders committed to the Carrefour Quality Line. This is an excellent example of Avril’s sectoral approach and its strong territorial roots, working to serve France’s farm. The view from upstream agriculture Vegetable oils and proteins make a significant contribution to dealing with food, climate, energy, social and territorial challenges in the modern world. Through the know-how, excellence and creativity of our sector, we benefit from some major advantages that will enable us to pursue our commitment to combine the economic growth of our production and the sustainable development of our regions. Avril’s model and its actions to serve the sector offer a practical illustration of which we, farmers, are very proud. The Group’s strategic orientations are more than ever playing a structuring role, creating value and competitiveness for France’s farm and its actors: arable farmers, livestock breeders, industry and consumers. And the international reputation of the Group’s activities – and hence of our sectors – offers a strong signal for the future; it demonstrates the pertinence of a model imagined some 35 years ago by French oilseed and protein crop producers. ARNAUD ROUSSEAU Chairman of Avril Gestion and Chairman of the FOP KRISTELL GUIZOUARN Director of Sustainable Development Sustainable development, a vector for change and differentiation 2016 saw a broadening to all our original activities and beyond of deploying a sustainable development policy loyal to the principles of our founders. In direct line with our mission, this deployment offers a crucial lever for the transformation and differentiation by which Avril constantly determines its new challenges, through the formalization of demanding policies and commitments with respect to animal welfare, responsible purchasing and supplies of sustainable palm oil. This is also achieved through the practical structuring achievements of our subsidiaries, such as the “Commitment to livestock” approach and an emblematic partnership with Fleury Michon with respect to French pork.
  • 26. Strategic Area #1 A strong and competitive Group in its markets that listens to customers The constant attention paid to health and safety issues, optimizing purchasing and the supply chain, enhancing our customer culture, improving the competitiveness of our industrial assets and also developing sectors thanks to investments by Sofiprotéol, are all levers that allow the Group to confirm its leadership and prepare optimally for the future. AVR IL — ACTIVITY REPORT 2016 ESSENTIALS
  • 27. 22 23 In an adverse environment, Avril has continued to control its costs. To preserve the profitability and long-term future of its activities, the Group has based itself on an ambitious operational and strategic excellence approach (EOS) that has achieved savings worth more than €70 million since it was introduced in 2013. SAFETY, THE ABSOLUTE PRIORITY Since 2013, the accident rate (TF2) has fallen by more than 60%. This performance has been favored by a continuous progress approach called “EOS Safety”, which targets a zero accident rate throughout the Group. Actions implemented in this context include site safety visits (VST), a tool used by all staff which ensures that safety is always central to everyday activities. In three years, more than 700 employees have been trained and more than 9,300 safety visits completed. OPERATIONAL EXCELLENCE AT ALL LEVELS While continuing to mutualize purchasing, the Group also initiated a Supplier Relationship Management program (SRM) called “Win-Win Way”. The introduction of online negotiation was one of the key achievements of 2016. In parallel, the Group launched the gradual deployment of an ERP (SAP) solution designed to facilitate the management of finance, purchasing and operations, the aim being to improve our response to the demands of internal and external customers and interactions with suppliers and partners. In terms of industrial performance, Avril pursued the deployment of Lean Six Sigma methods to optimize processes and develop skills, generating nearly €22 million of value. Consolidation of the EOS approach was also extended to the supply chain through the structuring of a dedicated Division responsible for aligning the Group with the best global standards. To serve this ambition, Avril pursued the sustained rhythm of its industrial investments. Nearly €210 million were thus committed in 2016 to fund major development projects, notably in industrial sites. In Algeria, this involved the construction of a Lesieur mayonnaise factory and an increase in the capacity of the Sim Sanders cattle feed plant. In Tunisia, structuring of the rapeseed sector was pursued. In Morocco, new olive groves were acquired. And in France, new activities and installations were launched: at the Lesieur site in Bassens (Gironde), Matines in Brugnens (Gers) and Ovoteam in Plaintel (Côtes d’Armor). Last but not least, work started on the “Avril Campus” which will open in 2018 near Rennes. Operational excellence is the life blood of our success. In an adverse market context, consolidation of our EOS program has more than ever become a differentiating advantage which aligns the Group with the best global standards. Competitiveness as seen by Gabriel Krapf, Industrial and International Development Vice-President €70M savings achieved through the EOS program since 2013 €760M of investments since 2013
  • 28. A SAFETY DAY FOR STAFF In line with consistent efforts to raise the awareness of employees to their safety, the Group organized the first “Avril Safety Day” in 2016. At each site, all staff met in working groups to review the actions carried out and opportunities for further improvements. Workshops offered reminders of basic safety rules, checks on equipment and the training of staff in the use of particular devices (fire extinguishers, defibrillators, etc.). Solutions were also proposed by staff employees to prevent certain risks, improve results and ensure that the Group moves even closer to its goal of a zero accident rate. Strategic Area #1 / Key facts DEVELOPING INTERNATIONAL SYNERGIES Progress with the EOS program should enable Avril to confirm its leadership in France and to develop synergies between its activities in order to conquer new international markets. In this context, two new operational zones were opened up in 2016: the USA and Africa. This extended organization will enable Avril not only to reinforce the presence of its subsidiaries in these regions but also to enhance their competitiveness. This represents a crucial advantage in providing better support for customers in these regions. OPERATIONAL EXCELLENCE CENTRAL TO AVRIL’S COMPANY PLANS The EOS approach focuses on six principal areas: health and safety at work, industrial performance, optimized purchasing, adapting production facilities to market conditions, optimizing support functions and reducing working capital requirements. Since it was launched in 2013, work on EOS has been gathering pace, with numerous projects under way or completed that have affected activities throughout the Group. 2016 was a further illustration of these efforts, with more than 500 projects initiated; a figure that should more than double in 2017. AVR IL — ACTIVITY REPORT 2016 ESSENTIALS
  • 29. 24 25 WHEN SUPPLIERS CAN IMPROVE SAFETY During its second Supplier Day, Avril gave “Supplier Safety Awards” to four of its suppliers in recognition of their significant contributions to improving safety within the Group. Aon France and Generali France collaborated with Avril in a fire risk management program for production units. Delattre Levivier Morocco (DLM) set up a system for awareness and safety monitoring in industrial environments at Lesieur Cristal. In the context of its strategic partnership with Oleon, G4S devised a safety procedure for working in confined spaces, accompanied by evacuation equipment specially designed for Avril. The fourth award went to SAP and its partner Augusta Reeves, who developed two new digital apps intended to achieve a zero accident rate: an “Immediate Accident Communication” (CIA) tool to notify accidents in a structured manner, and a “Digital Safety Visit” (VSD) tool to facilitate the follow-up of actions decided upon in the context of site safety visits.
  • 30. Strategic Area #2 A resolutely international Group set to conquer new markets Avril has a strong strategic objective to search for international growth areas and seize new opportunities, starting with the African continent, a priority in the Avril 2020 strategic plan. AVR IL — ACTIVITY REPORT 2016 ESSENTIALS
  • 31. 26 27 ACCELERATING DEVELOPMENT IN AFRICA Avril’s plan for Africa is to invest in oilseed sectors as a response to the strong increase in local food demand. By helping African farmers to produce more and better, the Group aims to contribute to reconquering food independence, as it is doing in France. Its approach is to share its know-how in order to revitalize local sectors, along the lines of the Moroccan model where for the past four years the Group’s subsidiary Lesieur Cristal has been supporting development of the oilseed sector and restoration of the olive sector in the context of the Green Morocco Plan. In 2016, Avril reinforced its presence in the Maghreb countries through its local partners. In Tunisia, a milestone was reached with development of a 100% Tunisian rapeseed sector (see on p. 28). In Algeria, the Group is already planning to double the capacity of the new SIM Sanders cattle feed plant, which came into service in 2016, to produce up to 120,000 tons of feed a year. In the same country, Avril has already launched the construction of a mayonnaise production unit with its partner, the Djadi Group, so as to respond to strong local demand. CONQUERING NEW MARKETS Avril is also developing new international growth opportunities thanks to increasing importance of specialty areas, acquisitions and a brand policy focused resolutely on exports. Among achievements in 2016, the Oilseeds Processing Business Line set up Avril Oil & Ingredient Solutions (AOIS), a B-to-B commercial platform targeting industrial customers in both France and internationally, and opened a branch office in Singapore to sell Saipol products on the Asiatic market. The Avril Animal Specialties line will achieve its objective of attaining international turnover of 50% in 2017, thanks to two major acquisitions in the animal nutrition and health market: Salus in Brazil and Ewabo in Germany. With olive, sunflower and rapeseed in Morocco, rapeseed in Tunisia and peanut in Senegal, we are working in the context of projects to structure and develop efficient and sustainable agricultural sectors, from upstream agriculture to downstream industry. Avril wishes to place its experience and know-how at the service of all African oilseed producers. International growth as seen by Yves Delaine, Deputy CEO
  • 32. STRUCTURING OILSEED SECTORS IN SENEGAL In 2013, the Avril and Castel Groups set up Copeol, a joint enterprise focused on developing oilseed sectors in West and Central Africa. Copeol Senegal owns a peanut processing plant in Kaloack which benefits fully from Avril’s expertise in terms of sectoral structuring and development. There is also close involvement upstream: in the context of a partnership with a leading peasant farmer organization (ASPRODEB), a major program on contractual arrangements with producers with products was initiated. In 2016, Copeol Senegal supported more than 15,000 farmers growing 22,500 hectares of peanut, a figure that should double in 2017. From upstream to downstream, Copeol also focuses on developing local markets through Oleosen, a refining and packaging plant for grain oils – notably soybean – and mayonnaise, based in Dakar. Traditional 1, 3 and 5 liter PET bottles delivering 25 cl “doses” are particularly appreciated in Senegal, and products from this factory are sold under the Jaara and Lesieur brands. LAUNCH OF A RAPESEED SECTOR IN TUNISIA In early 2017, the Tunisian government, Avril and its subsidiary Cristal Tunisia inaugurated a local rapeseed sector. Initiated in 2014, introduction of this crop first saw the development of an upstream sector involving more than 100 farmers cultivating more than 3,000 hectares. The sector was then structured both upstream and downstream around local partners in order to produce 100% Tunisian Lesieur-branded rapeseed oil, with rapeseed meal to be exploited by Sanders Tunisia as feed for livestock throughout the country. The rapeseed is processed by the local Carthage Grain crushing plant, and refining is assured by a Tunisian refinery. Cristal Tunisia manages the bottling and marketing of the oil. TARGETING SUB-SAHARAN AFRICA Lesieur Cristal, leader in the Moroccan table oils market, achieved a record year in terms of developing its export sales, principally to Sub-Saharan Africa. In addition to major growth in Asia, the Near East and Middle East, Lesieur entered the Ethiopian market in 2016, selling 500,000 liters of Lesieur oil within a few months, thanks to its strong reputation. Other projects are planned for 2017. Strategic Area #2 / Key facts AVR IL — ACTIVITY REPORT 2016 ESSENTIALS
  • 33. AVRIL, A PARTNER IN THE INITIATIVE ON THE ADAPTATION OF AFRICAN AGRICULTURE In the context of the COP22, which was held in Marrakech in November 2016, Avril and its subsidiary Lesieur Cristal mobilized their forces to support the Adaptation of African Agriculture (AAA) initiative. Launched in 2016 under the sponsorship of the Moroccan Minister for Agriculture and Maritime Fisheries, this initiative places African agriculture at the center of negotiations on the climate and proposes innovative solutions to resolving the food and climate equation. The challenge: between now and 2050, the African continent will see its population double to reach nearly 2.5 billion people. It will therefore be necessary for it to triple its agricultural productivity while reducing the impacts of climate change on its natural resources. One of the solutions is based on the ability of agricultural sectors to feed more people while implementing sustainable farming and livestock practices that are consistent with their environment, in a context of ecologically intensive agriculture. This vision is shared by Avril, which presented a good example of successful adaptation in Africa in the form of its efforts to revitalize the Moroccan oilseed and olive sectors.
  • 34. Strategic Area #3 Innovation to drive the creation of sustainable value During the past three years, Avril has been turning increasingly towards vegetable proteins to diversify markets in its sector and respond to the challenge of feeding the planet. 2016 was a year of considerable progress in this area, and the Group Research, Innovation and Development Division (RID Division) was notably involved in collaborative projects to structure the future. AVR IL — ACTIVITY REPORT 2016 ESSENTIALS
  • 35. PROTEIN, A CENTRAL THEME OF INNOVATION Valorizing vegetable proteins is a central theme for work by Avril’s RID. The aim is use grain to produce concentrates (containing 60% protein) and isolates (90%) in order to develop specialty products for three types of market: animal nutrition, food products and Proteochem® (protein chemistry). In the area of human foods, Avril aims to play a leading role in the development of vegetable protein-based foods that will be attractive to consumers. Rapeseed is the full package. It is a valuable protein from a nutritional point of view that can meet considerable demands in volume terms, and it benefits from a highly positive image. In 2016, research on the development of rapeseed protein isolates and derivatives made some major advances. This work is now at the stage of pilot trials being performed by the IMPROVE* platform, and the first production plant is scheduled for 2019. A VECTOR FOR CHANGE WITHIN THE GROUP For Avril, this swing towards protein involves the development of tools and skills in first-stage processing. Upstream, in order to optimize the extraction of protein, which is more fragile than oil, and downstream to market a portfolio of specialty products in a broad diversity of markets. At the industrial level, the production of protein isolates from rapeseed grain requires the implementation of specific technologies. This implies either adjustments to current crushing processes, or the development of radically different methods. In either case, industrial facilities will have to change so as to ensure that all grain components can be determined and preserved under a biorefining approach and thus exploit all parts of the plant. * Institut Mutualisé pour les PROtéines VEgétales (Joint Institute for Vegetable Proteins). Born of efforts to reconquer the independence of France’s farm with respect to vegetable proteins, mainly for animal nutrition, Avril was initially based on the valorization of oils. Today, we are opening a new chapter in the history of our Group and its sector by exploiting the protein fraction of grains for direct use in human foods. 15patents filed each year 5main RID centers in France, Morocco and Malaysia 250research scientists 30 31 Avril’s RID Division has joined a European consortium of industrial partners in order to implement a research project with Wageningen University in the Netherlands. The aim is to develop new techniques for the production of meat analogues using plant raw materials, in order to achieve results that are similar to meat in terms of texture and flavor. The markets targeted are human foods and pet products. Avril’s mission is to supply protein ingredients from rapeseed and sunflower. Towards a new generation of vegetarian steaks Innovation as seen by Paul-Joël Derian, Research, Innovation & Development Vice-President
  • 36. PROGRESS WITH BIOTFUEL The BioTfueL project, supported by ADEME, aims to develop a series of processes that can deal with a broad range of biomass resources (agricultural and forestry wastes) in order to produce a second- generation biofuel that will complement the first generation. The project involves six partners that are leaders in their sectors. At the end of 2016, a demonstrator was opened in Dunkirk, dedicated to the gasification and purification of biomass which was previously “roasted” at Avril’s site in Venette. Development of the biomass roasting process at Avril’s site opens the way to numerous opportunities for valorization, notably as energy, and constitutes a development lever for other Group activities. With Plant-Based Solutions, Everyone Breathes EASY Without any added investment, there are four benefits to adding plant-based chemical solutions to your wood-based panel manufacturing process: • Reduce fossil-based chemicals. • Reduce significantly the use of formaldehyde based resins. • Help dispersion, speeding up your plant and improving productivity. • There is better bonding and moisture resistance, for a final product with the same or better quality. With Evertree, you, your employees and your customers breathe easy. To find out more: evertree-technologies.com PLANT-BASED CHEMICAL SOLUTIONS Strategic Area #3 / Key facts Using rapeseed meal as its starting material, Evertree aims to target all markets involving the application of Proteochem® , where it can procure both health and environmental benefits for consumers. EVERTREE, A NEW MARKET FOR RAPESEED PROTEIN Avril, Bpifrance and an Israeli start-up, Biopolymer Technologies, set up Evertree in 2016. Its mission is to develop biosourced solutions based on rapeseed protein as alternatives to chemical products of fossil origin that generate VOC (volatile organic compounds). These compounds, such as formaldehyde, are harmful to both health and the environment, but they are important components in resins, glues, paints and materials used for numerous industrial applications. Evertree has opened up a new pathway for Avril: Proteochem® , or protein chemistry. The first industrial application that is currently being targeted is an additive with high added value used for the manufacture of wood-based composite panels. It can reduce or even avoid the presence of formaldehyde – and exposure to this substance. An initial pilot unit should open during 2017 at the P.I.V.E.R.T. (“Picardie Innovations Végétales, Enseignements et Recherches Technologiques”, Picardy Plant-based Innovations, Teaching and Technological Research) center in Compiègne, with hopes of industrialization as early as 2018. AVR IL — ACTIVITY REPORT 2016 ESSENTIALS
  • 37. 7FOUNDER PARTNERS OF THE CONSORTIUM: ● Avril ● Limagrain ● Neovia ● Roquette ● Tereos ● Terrena ● Vivescia Supported by the Industries & Agro-Ressources (IAR) Competitiveness Cluster. MAKING FRANCE A FUTURE LEADER IN PROTEINS France has all the advantages to become an international agricultural and industrial leader in the production of proteins, notably those of vegetable origin. This is the conviction of the seven leading French companies in the sector, including Avril, which have joined forces in the context of the France Proteins Consortium. Their aim is to make protein a spearhead for the French economy. An agreement was signed with the government during the SIAL Food Exhibition in 2016, which defined a strategic program for development of the French protein sector in the context of investments worth €1 billion over five years. This program, which supplements the Vegetable Protein Plan for France 2014-2020, includes proposals on support tools for research, development and industrialization. 5MISSIONS: ● To structure the French sector ● To support R&D ● To accelerate industrial investment ● To encourage the creation and growth of start-ups ● To support product innovation 32 33
  • 38. Strategic Area #4 People committed to serving a federative company project The men and women of Avril contribute every day to the development of strong national sectors. They are mobilized by a collective project and a federative vision of common values, around which the Human Resources Division deploys new initiatives that will drive structural change. AVR IL — ACTIVITY REPORT 2016 ESSENTIALS
  • 39. In 2016, this dynamic was marked by a particular focus on welfare and health. As a true vector for cohesion, it was notably through sport that the Group supported this change. And with success, as testified by the actions that have involved an increasing number of colleagues, such as the Mont Saint-Michel marathon, in which more than 130 staff participated in 2016. It was in the same spirit that December 2016 saw the inauguration of a “Fitness center” for staff at the Lesieur plant in Coudekerque, northern France. Equipped with exercise bikes, treadmills, exercise benches and table soccer, this center offers staff an opportunity to relax during their breaks or after work. This initiative, developed with the social partners, should provide a model for others in the near future. CONSOLIDATING A COMMON CULTURE A European Works Council (EWC) was set up to develop the social cohesion of teams and to consolidate a common culture. Meeting for the first time in June 2016, it counts employee representatives elected for four years who come from Avril entities in Germany, Belgium, France, the UK, Poland and Romania, as well as an observer member from Morocco. Along the same lines, Avril also launched an intranet platform for use by its employees. Called Yellow, in 2016 it attracted more than 3,500 staff members from French Group entities who were interested in its different resources, communities, applications and information. In 2017, Yellow will be pursuing its deployment in international subsidiaries. DEVELOPING TRAINING AND ACCESS TO EMPLOYMENT In January 2016 the Group signed a partnership with the French government in the context of the Enterprises and Quartiers Charter. Between now and 2018, the Group will host at all its sites – both in France and internationally – 400 young people in vocational day release training. Sites employing more than 30 people will also have at least 6% of disabled staff. In parallel, Avril is pursuing its efforts to develop skills, exemplified by the launch of the Avril Academy in January 2016. This in-house “university” now groups all the Group’s training facilities and constitutes an efficient vector for the dissemination of culture and knowledge. A first training course was set up in 2016; called “Weedo”, it is intended for our 450 local managers and focuses on basic management skills. At completion, a professional certificate is issued by the Polytechnic College. Together, we want to enhance our collective commitment to Avril’s singular company culture. We want each employee to be proud to contribute to developing agro-food and agribusiness sectors for tomorrow. 34 35 Avril’s HR initiatives as seen by Philippe Lamblin, Human Resources Vice-President
  • 40. 3,000 JOBS IN AGRICULTURE AND THE AGRO-FOOD INDUSTRY A totally new approach in the French agricultural and agro-food industries has been adopted: for the first time, fifteen companies and federations have worked together to create a platform dedicated to employment in the sector. The result: 3,000 job opportunities were listed by the partner companies in France. Under the impetus of Xavier Beulin, the Avril, Bel, Danone, Nestlé/Nespresso Groups and the InVivo, Tereos and Terrena cooperatives, ANIA, FC2A and ANEFA organized a “job dating” session in the context of the 2017 Salon international de l’Agriculture in Paris. Their aim was simple: to facilitate contacts between companies in the sector and those seeking employment. Several hundred people participated in this initial event. Strategic Area #4 / Key facts AN EXECUTIVE COMMITTEE FOR YOUNG PEOPLE: LET THE YOUNGER GENERATION SPEAK Ensuring the more active participation of young managers in changes to the Group and its strategy was the aim of the Executive Committee for young people, launched by Avril. It comprises sixteen members, all younger than 35 years of age and including at least eight males and eight females working in different parts of the Group, such as Saipol, Matines, Lesieur, Lesieur Cristal, Expur, Sanders or Ovoteam, etc. Appointed for a period of two years, these young colleagues will be able to express their views on strategic subjects relative to operational affairs, such as internal changes with respect to the digital revolution or working practices. The first meeting took place in September 2016. A SUCCESS FOR AVRIL’S EMPLOYEE SHARE OWNERSHIP SCHEME In February 2016, Avril signed a collective agreement on a Group Savings Plan (GPS) which would enable employees of the French subsidiaries to invest in the Group by acquiring shares in an open-end company mutual fund (FCPE). Nearly 50% of staff based in France participated in this operation, which was far more than had been anticipated. This plan underlines the Group’s desire to involve employees in its profits over the long term, to stimulate the understanding of its teams regarding the challenges we face in the future and to develop a sense of belonging and loyalty to the company’s plans. Employees were able to invest in the FCPE Avril as from May 2016. AVR IL — ACTIVITY REPORT 2016 ESSENTIALS
  • 41. AN AVRIL CAMPUS IN RENNES FOR 2018 The Group has just launched construction of the Avril Campus. Based at the ZAC de Ker Lann in Bruz, south of Rennes, it will employ nearly 600 people. Covering a total of 13,000 m2 on three levels, and surrounded by 28,000 m2 of grounds, this collaborative facility will cover the vast range of skills required by all the Group’s activities, from plant sectors to animal sectors, and will also centralize certain support functions. The Avril Campus will open in 2018. In line with the rural roots of the Group, it has a landscaped design, being constructed around a solar greenhouse that will contain the Avril Campus. 36 37
  • 43. Avril’s activities are organized around its two complementary skills: that of an investor through Sofiprotéol and its industrial activities structured in seven business lines. An overview and some highlights of the year.
  • 44. AVR IL — ACTIVITY REPORT 2016 ACTIVITIES Sofiprotéol The trusted partner of French sectors With its new organization and increased resources, Sofiprotéol broadened the scope of its actions in 2016 to serve the growth and structuring of French agricultural and agri-food sectors. The Avril Group’s finance and development arm, Sofiprotéol increased the value of its investments so as to consolidate growth initiatives while preparing to face the agricultural challenges of the future. €275 M invested in 5 years €54 M invested in 2016
  • 45. 40 41 For more than 30 years, Sofiprotéol has been supporting companies in the European agricultural and agri-food sectors through minority stakes and loans. Its aim is to support their long-term growth and assure the future for these sectors in France. This mission in the general interest was reaffirmed in 2015, in line with the Group’s new governance structure. Sofiprotéol’s activities benefited from a new organization and increased resources, its capital base rising to €330 million. A new fund was set up in 2016 called Sofiprotéol Dette Privée (see on p. 44) to provide a supplementary funding tool for companies in the form of bonds. This new configuration offers greater margin for maneuver and improved market visibility, and it confirms Sofiprotéol’s position as a driver of growth in national sectors, alongside its interprofessional partners. DIVERSIFIED SECTORS OF ACTIVITY In the context of the Avril 2020 strategic plan, Sofiprotéol is aiming to invest more than €250 million between 2016 and 2020, versus the €215 million achieved between 2011 and 2015. The scope of its intervention has also More than 100companies given support, representing 110,000 jobs 6areas of intervention 52stakeholdings
  • 46. MICHEL BOUCLY Deputy Manager of Sofiprotéol Sofiprotéol offers an original business model that can serve the general interest. Its actions are based on sustainable and responsible investments that will create value for our partners and all agricultural and agri-food sectors in our regions.
  • 47. 42 43 broadened to new activities, as an extension to French agricultural sectors. For the future, three areas have been identified for action: ● upstream agriculture, and notably support for the development of new seed varieties and products for plant protection and nutrition, which will enable farmers to produce more efficiently and competitively, while respecting the environment; ● ingredients, notably those made from vegetable proteins, through two stakeholdings: in Solina, the European leader in ingredient-based tailor-made solutions for the agri-food industry, and in Inveja, in collaboration with the cooperative group Terrena (see on p. 45). ● the dairy sector, the leading consumer of rapeseed meals in France, in the context of the crisis affecting French livestock farmers but structural growth in global demand. This strategic choice is once again targeting a long-term investment that will consolidate the French dairy sector and draw value from rapeseed proteins produced in France. Breakdown of commitments in 2016 Agricultural and food processing and by-products Upstream plant production Upstream animal production Sustainable innovations, investment funds, other Food products and consumer goods Debt fund 41% 10% 9% 21% 14% 5% A renewed partnership with Vivescia Industries In line with the initial investment made in 2014 at the issue of convertible bonds, Sofiprotéol took a minority stake in the capital of Vivescia Industries in August 2016. A subsidiary of the Vivescia cooperative group, Vivescia Industries federates firms specialized in the processing of cereals, mainly for food uses. The capital stake by Sofiprotéol aims to support the funding of structuring projects in the milling, malting and baking sector, and particularly international activities for the subsidiaries, NutriXo and Malteurop. Total €240 M
  • 48. AVR IL — ACTIVITY REPORT 2016 A RECORD LEVEL OF INVESTMENT IN 2016 In 2016, Sofiprotéol invested nearly €54 million in different companies to consolidate the agricultural and agri-food sectors (not including support for innovation), which was a record level (against €36 million in 2015). In the first-stage processing sector, the Group’s finance and development arm pursued its strategy to support firms through different initiatives. It took a minority stake in the capital of Vivescia Industries to enable the funding of international projects in the milling, malting and bakery sector. It pursued its efforts to revitalize a sustainable and competitive non-GMO soybean sector for France, notably through a partnership with the Euralis and Fipso cooperatives and the major retailer Carrefour. Sofiprotéol established new alliances designed to consolidate French livestock sectors. After supporting Terrena in its takeover of Doux, Sofiprotéol and Unigrains backed the acquisition by Arterris of Dufour Sisteron and Ovimpex in the beef and lamb sectors. These acquisitions will enable Arterris, working in collaboration with the cooperative Agneau du Soleil, to develop and consolidate the French lamb sector by reinforcing the value chain downstream and thus cover the collection of animals, their slaughter, cutting and then processing. In parallel, Sofiprotéol participated in the takeover of Medria, which specializes in solutions to monitor and control the health of dairy cows. Medria’s CapAgro Innovation doubles in size Since it was set up in 2014 by Sofiprotéol, Tereos and Bpifrance (amongst others), the first French venture capital fund focused on financing innovative start-ups in the agriculture and agri-food sectors has seen growing success. During its first thirty months, and using its initial endowment of nearly €60 million, CapAgro achieved 15 investments in sectors central to today’s challenges and creators of value and jobs, or a rate that was higher than the initial goal. These companies include the manufacturer of robots for agriculture, Naïo Technologies, and Prêt à Pousser, a European pioneer in indoor vegetable gardening. Driven by this enthusiasm, the fund has issued a call for new subscribers and hopes to reach a value of nearly €150 million; it will thus become the leading fund in Europe specialized in innovation in the agricultural and agri-food sectors. Sofiprotéol Dette Privée, bonds for the food and agri-food sectors Faced with increasingly numerous requests from companies in the agricultural and agri-food sectors, Sofiprotéol set up a private debt fund that could respond to their specific requirements. To achieve this, Sofiprotéol joined forces with a French leader in asset management, Tikehau IM, to set up Sofiprotéol Dette Privée. This fund is designed to support the development of companies in the sector through interest-only loans or the leverage funding of acquisitions. It offers a tool that will complement the capital operations already carried out by Sofiprotéol. Funded initially by Sofiprotéol and Tikehau Capital with a group of leading institutional investors, its first closing achieved capital of more than €120 million, the aim being to reach commitments worth nearly €200 million by the end of 2017. ACTIVITIES
  • 49. 44 45 aim is to develop new data processing solutions that will further improve the technical and economic efficiency of dairy farms, both in France and internationally. PREPARING THE AGRICULTURAL CHALLENGES OF THE FUTURE To help French sectors to structure their activities and face the challenges of the future, Sofiprotéol pursued its partnership with CapAgro Innovation, the leading venture capital fund in France dedicated to agriculture. Fifteen innovative start-ups have thus received support (see opposite) since the fund was set up in 2014. In parallel, in the context of managing FASO (the Strategic Oilseeds and Pulses Action Fund), Sofiprotéol and the BearingPoint consultancy published a study on development strategies for digital agriculture, market prospects in France and internationally, and the positions of different actors in the sector. It appears that four key levers need to be operated in response to the demands of farmers and enable the large-scale development of digital agriculture: to demonstrate a return on investment in products and services for farmers, to propose tools that are simple to use, to find appropriate marketing channels and to offer flexible solutions that can adapt to a changing environment. Sofiprotéol aims to contribute actively to addressing these challenges by playing a central role in developing the excellence of these new activities, in order to serve sustainable agriculture. Avril and Terrena, common ambitions for structuring projects Sharing many common values, such as the development of sustainable farming and the consolidation of agricultural sectors around quality approaches, Sofiprotéol and the Terrena cooperative group have further strengthened their links. Partners since 2014 in the creation of Ekoranda, which assures the extrusion cooking of oilseed and protein grains for animal feeds, the two companies set up Inveja in 2016. This firm specializes in vegetable protein-based ingredients that are used by the baking and pastry sectors. The objective is to foster the emergence of a French leader in the European market between now and 2025. Sofiprotéol also provided support for Terrena in its takeover of the poultry company Doux, their agreement being finalized in March 2016. The objective is to pursue consolidation of the poultry market in France, contribute to the recovery of Doux and assure long-term export positions for the French sector. Sofiprotéol continues to pursue its missions at the service of agriculture, with the consistent aim of developing markets for French products, constructing strong sectors for the future and encouraging innovation. CLAIRE MAINGON Director of Investment, Deputy Director of Commitments PIERRE DABBADIE Technical Sales Manager at Sanders Euralis – France GB_AVRIL_ra_170x240_BAT.indd 45GB_AVRIL_ra_170x240_BAT.indd 45 15/06/2017 12:4315/06/2017 12:43
  • 50. AVR IL — ACTIVITY REPORT 2016 Oilseeds Processing Driven by diversification and innovation In a difficult context, the Oilseeds Processing Business Line improved its resilience and accelerated its transformation, evolving its business model to serve the French sector: more customer-oriented, innovative, diversified and international. 11sites, 7 of them in France 1.7 M tonnes of biodiesel produced €2.9 Bn turnover 2.2 M tonnes of oilseed meal produced 4 M tonnes of grain crushed ACTIVITIES
  • 51. 46 47 A COMPLEX YEAR BUT CONSTRUCTIVE FOR THE FUTURE Upstream of the oils and proteins sector, the Oilseeds Processing Business Line has two activities: the industrial processing of oilseed grains (crushing, esterification, refining) and the sale of oils, biodiesel, oilseed meals and proteins. During the past two years, these activities have evolved in a highly unstable economic environment, whose volatility further increased in 2016. Between petroleum prices which reached their lowest level of $27 per barrel in February 2016, and the sustained prices of raw materials linked to poor European rapeseed and sunflower harvests, first-stage processing margins found themselves under considerable pressure. In the biodiesel market, the “scissors effect” was compounded at the start of the year by strong competition within Europe. These unfavorable conditions weighed on activities and profits in the business line. Biodiesel losses were minimized thanks to an upturn in petroleum prices and a strong resumption of production at the end of the year. As for crushing, the anticipated recourse to grain imports, and the good management of grain-oils-meals trading meant that a satisfactory balance could be maintained. In a context of smaller French harvests during the past two years, imports of rapeseed proved essential to ensuring the sustained activity of sites and guaranteeing markets within the French sector. In order to return to profitability, and to sustainably adapt its activities, the Oilseeds Processing Business Line implemented its new strategic approach, together with an action plan combining savings and value creation which should generate more than €40 million between now and 2020. Opening of the Avril Oil & Ingredient Solutions platform A highlight of the diversification of efforts by the business line, this new commercial platform will enable the grouping and structuring of certain activities in oils and ingredients. Organized along B-to-B lines, it targets customers in the agri-foods, cosmetics and health industries who are offered vegetable oils, specialty oils and functional ingredients produced by Saipol, Lesieur, Kerfoot and Expur. Already highly active, this platform is notable because of the Group’s commitment to launching sunflower lecithin, a natural food emulsifier that can replace soy lecithin. Industrial investments have been made at Saipol and Expur so that production can start in 2017, and Avril will become the leading producer in Europe. Another important event was the Group’s entry into the market of by-products rich in plant sterols.
  • 52. JEAN-BAPTISTE BACHELERIE General Manager of the Oilseeds Processing Business Line 2016 was characterized by a dual trend: our ability to resist the crisis thanks to improved risk management, a very strong orientation towards innovation, and diversified responses to the demands of our customers.
  • 53. 48 49 IMPROVING OUR CONTROL OF RISKS 2016 was a good illustration of this: mastery of external and internal uncertainties is crucial to success in this business line. Faced with market fluctuations, our trading activities (grain, oils, meals, biodiesel) implemented appropriate measures: a redesigned organization and new tools for the management of trading risks and performance appraisal. Internally, the supply chain constitutes the link between executing a trading contract, operational planning and customer satisfaction; it is the cornerstone of work flow management. In 2015, the department was reorganized around two objectives: to reduce transport costs under a multi-mode approach (maritime, river, road and railroad) and to optimize all work flows, from grain to finished products, in order to gain in flexibility. In 2017, the challenge will be to base improvements around the Group’s efforts with respect to the digital revolution. Finally, reducing industrial costs was more than ever on the agenda, focused on three areas for improvement: mastery of production processes, optimized energy consumption and efficient maintenance. ADAPTING OUR BUSINESS MODEL To define its strategic policy, the business line has based itself on Avril’s mission which is to create new sources of added value in terms of both agricultural supplies and products from its factories: refined oils, ingredients, proteins, etc. This supposes an adaptation of our approach in order to shift from that of large volumes to diversified and profitable niche markets. This has marketing, commercial and industrial implications: segmentation between different products, formats and qualities; the definition of a product portfolio in line with customer requirements; the adaptation of industrial know-how and product logistics. Important, well-structured and sustained innovations are being introduced throughout the business line. Already under way, the diversification of activities was illustrated in 2016 by structuring initiatives: optimization of the portfolio of refined oils under a strongly customer-oriented approach based on new applications thanks to the recruitment of technical sales teams, and creation of the Avril Oil & Ingredient Solutions platform (AOIS; see on p. 47). The line also continues to focus on its international efforts to find new outlets, with the operational launch of Saipol Asia (see opposite). Saipol targets Asia To reinforce its international efforts and diversify its markets, Saipol has opened an office in Singapore to sell its products on the Asiatic market. The aim is to seize new opportunities in different human and animal food markets. Several projects are already under way: the sale of rapeseed meals from Romania in Vietnam, and the supply of high-quality edible oils in China (sunflower and high-oleic sunflower oils) that place value on their French origin. A new management structure for the business line ORGANIZED IN 5COMMERCIAL PLATFORMS: ● Biodiesel ● Crushing ● Oilseed meals and proteins ● Refined oils and ingredients ● Specialty oils AND 3MAIN REGIONS: ● Western Europe and Asia ● Eastern Europe, from Poland to Russia ● Northern Europe, from Ireland to Scandinavia and including the UK
  • 54. AVR IL — ACTIVITY REPORT 2016 A CHAOTIC YEAR FOR RAPESEED BIODIESEL To the oil crisis that triggered a very low price per barrel at the start of the year, causing strong competition within Europe, was added greater competition among HVO (Hydrotreated Vegetable Oil) biofuels, favored by the lower cost of palm oil imports. Avril was thus forced to adjust its biodiesel production activities temporarily in 2016. With the upturn in petroleum prices, the situation improved in the autumn and biodiesel sales experienced an upturn, sustained by favorable incorporation rates: up to 8% in French diesel (7% in Europe) and 4%, which is now obligatory, in off-road diesel. PRESERVING A SECTOR THAT CREATES VALUE Following the pioneering efforts of France in the area of renewable energies, Europe played a decisive and leading role in the development of first-generation biofuels. But in recent months, the European Commission has been proposing a reduction in the share of this renewable energy in transport fuels, its aim being to foster the growth of second-generation biofuels. In this context, the French vegetable oils and proteins sector, alongside all European actors in biofuel production, remains mobilized to preserve the market for first-generation products. Resulting from the commitment of historical actors in their first generation, second generation biofuels complement their predecessors and will enable Europe to achieve its objectives with respect to renewable energies. Although over-capacity of the market and regulatory uncertainties have weakened one of the principal markets for farmers producing rapeseed, Avril remains confident in the future of a French sector that creates value and has unquestionable environmental and industrial advantages: Figures on the French biodiesel sector 20,000jobs in regions throughout the country 1L = 1.5Kg For one liter of biodiesel, the equivalent of 1.5 kg of rapeseed meal is produced for animal feed 100,000farmers grow rapeseed €1.5Bn annual savings in the import of fossil diesel and oilseed meals for livestock feeds €2Bn contribution to French GDP FOCUS Preserving the French rapeseed biodiesel sector ACTIVITIES
  • 55. 50 51 ● Biodiesel is one of the only renewable energies available at present that can easily replace petroleum-based fuels. It generates greenhouse gas emissions that are 60% lower than those of fossil diesel, and its incorporation causes a significant reduction in emissions of pollutant particles: up to 43% fewer particles with a B30 diesel (IFPEN study – 2016). ● Rapeseed biodiesel comes from an agricultural and industrial sector that represents 20,000 jobs in France (mainly in rural areas), favors regional economic dynamism and contributes €2 billion to French GDP. ● A by-product of rapeseed meals used for livestock feeds, rapeseed biodiesel contributes to the food dimension of agriculture and enables France to reduce its dependence on GM soybean imports. Thanks to its rapeseed biodiesel, France’s self-sufficiency has risen from 23% in 1983 (when the Group was founded) to more than 55% today. Born in France in the early 1990s, the biodiesel sector is emblematic of the excellence, innovation and know-how that drive our territories. Its development has enabled the advantages of our agriculture and the strengths of our industry to come together and make France a leader in renewable energies and plant chemistry in Europe, while at the same time defending the independence of France and Europe with respect to vegetable proteins, an essential component in our livestock feeds. STÉPHANE YRLÈS General Secretary
  • 56. AVR IL — ACTIVITY REPORT 2016 Oils & Condiments Leading brands in their markets In an uncertain market environment, the Oils & Condiments Business Line drew strength from its sectoral organization, brand reputation and constant innovation dynamic to consolidate its market positions and accelerate its international development. 12sites, of which 7 in France €1,1 Bn turnover 1.2 M tonnes of table oils sold 44,000tonnes of soap sold 42,000tonnes of sauces sold ACTIVITIES
  • 57. 52 53 LESIEUR ACCELERATES ITS GROWTH IN ALL MARKETS French market leader in edible oils and third in condiments, Lesieur continues to launch breakthrough innovations and to modernize its industrial facilities, while accelerating its international deployment in North and West Africa, Asia, the Near East and Middle East. In a stable French market where industrial margins were under pressure, Lesieur focused on breakthrough innovations, targeting new consumption modes and top-quality product ranges driven by original recipes. After the success of Stop Goutte, the brand created a buzz with its “easy spread” oil in a new 150 ml format with an integrated silicone applicator. The success of its combined oils enabled it to broaden its range in 2016 with ISIO 4 Touche de Noix and Lesieur Sunflower & Olive. Puget, which in 2017 will be celebrating its 160 years of existence, pursued the sustainable growth of its sales, thank notably to the launch of a squeeze bottle with a no-drip stopper, and a premium virgin olive oil (Saveur fruité noir), a 100% French oil with the delicate flavor of preserved olives. In order to increase its activities in a strong growth segment, Lesieur also joined forced with the Italian brand Monini to introduce its organic olive oils onto the French market. In terms of condiments, the company produced some new recipes, such as its Duo mayonnaises (an exclusive Lesieur innovation), a sweet and sour sauce and other two-phase sauces. AN INDUSTRIAL UNIT IN ALGERIA IN 2018 With its products now sold in 65 countries, Lesieur is accelerating its international deployment by operating two levers: developing its export activities and setting up production units in growth markets. Thus Lesieur developed the export from France of premium products – notably condiments – whose sales continue to increase in Asia (particularly China) and in the Middle East, driven by the French brand name and tailor-made recipes adapted to market demand. This trend was also seen with respect to olive oil, through international distribution by Lesieur of the Italian brand Azienda Olearia del Chianti. At a local level, Lesieur increased its presence in certain countries through partnerships, such as the agreement with the Djadi Group to construct a mayonnaise factory in Algeria, which will be operational in 2018. 2016 as seen by Romain Nouffert, General Manager of Lesieur A revolutionary process in Coudekerque A minor revolution is in preparation at the Lesieur unit in Coudekerque (Nord), the historical home of the brand. €22 million are being invested to modernize and develop both industrial and research activities at the site. This record investment, spread over three years, means that Lesieur Coudekerque will become a reference in terms of quality, flexibility and industrial innovation with respect to both recipes and packaging. On top of all this, the plant’s capacity will increase to 210 million liters (versus 180 million in 2016), alongside significant reductions in the amount of plastics used, more durable bottles and a revamped design, so as to better respond to the demands of both customers and consumers.
  • 58. OLIVIER DELAMÉA General Manager of the Oils & Condiments Business Line To serve our mission, our brands constitute a remarkable vector for the creation of value shared at all levels of the sector. That is what makes these brands leaders in their markets, the priority being to constantly improve our products and ensure our commitment to responding better to the demands of consumers.
  • 59. 54 55
  • 60. AVR IL — ACTIVITY REPORT 2016 EXPUR TARGETS SYNERGIES TO DIVERSIFY ITS PORTFOLIO A key actor in the oilseeds market in Romania, Expur assures the collection of rapeseed and sunflower grains for Saipol and for its own site in Slobozia, and sells oilseed meals, edible oils and biodiesel in Romania, which is the development platform for the entire Black Sea region and Mediterranean basin. Expur had to operate in a difficult economic environment in 2016. Falling petroleum prices and consumption levels, linked notably to a demographic downturn in Romania, constituted obstacles to the development of its activities. Despite this adverse context, and reinforced by investments in recent years and the mobilization of its staff, Expur was able to overcome these problems and consolidate its position in both the local and export markets, achieving globally dynamic production. Its collection and crushing activities saw an increase in volumes to 450,000 tonnes of grain crushed in 2016. With 120,000 tonnes sold in 2016, biodiesel sustained its progress and saw the development of growth opportunities throughout the region. The production of oilseed meals for livestock feeds reached 200,000 tonnes, thus contributing 50% to the needs of Romanian livestock farmers for vegetable proteins. DIVERSIFICATION OF THE PORTFOLIO In Oils & Condiments, Expur maintained its commercial positions, with 100 million liters of sunflower oil produced in 2016, 95% of it bottled. The development of bulk supplies for professionals in the agri-food and out-of- home dining sectors saw excellent growth, increasing by nearly 30%. As for Untdelemn de la Bunica, work on renovation, diversification and brand upgrading bore fruit (see opposite). This is continuing in 2017, with significant growth of the export volumes sold, notably towards the Middle East. In parallel, Expur, working in synergy with Lesieur Cristal, is working on introducing an olive oil called Zagora onto the Romanian market. In B-to-B, the diversification dynamic initiated by Expur forms an integral part of the new Avril Oil & Ingredient Solutions commercial platform set up by the Oilseeds Processing Business Line. The aim is to benefit from synergies within Avril in order to offer vegetable oils, specialty oils and high quality functional ingredients that will meet the needs of its customers. 2016 as seen by Pascal Pinson, General Manager of Expur Bunica confirms its leadership Leader in edible oils in Romania, Untdelemn de la Bunica saw its sales increase in a market that was nevertheless declining, to reach record levels: 14 million liters were sold in 2016, versus 13 million a year earlier, thus confirming the brand’s leadership in Romania. This success was made possible by the complete renovation of its product ranges and the launch of major innovations breaking with the habits of Romanian consumers who previously tended to prefer sunflower oil. A vitamin D-enriched sunflower oil and a special frying oil were thus put on the market successively during the past two years. This dynamic is continuing with the launch of the Zagora olive oil brand and an ambitious program for innovations under the Untdelemn de la Bunica brand, underpinned by a marketing and media plan equal to Expur’s ambitions. ACTIVITIES
  • 61. 56 57
  • 62. AVR IL — ACTIVITY REPORT 2016 LESIEUR CRISTAL EXPANDS ITS EXPORT POTENTIAL With a portfolio of strong heritage brands in Morocco (Lesieur, Al Horra, Huilor, El Kef, Taous), Lesieur Cristal confirmed its leadership in the edible oils and soaps markets. Its business model, based on a strategy of innovation and diversification, now largely exceeds the frontiers of Morocco. Lesieur Cristal had to deal with difficult climatic and economic conditions in 2016. The year was marked by a particularly severe episode of drought which had repercussions for both agricultural production and consumption levels in rural populations. In this context, Lesieur Cristal nevertheless succeeded in sustaining its product innovation efforts, while increasing its growth at export. Structuring innovations were thus introduced, and notably a range of Taous shampoos, an extra virgin Al Horra olive oil and a powdered El Kef household soap sold in dose sachets. This latter product, a real success in Sub-Saharan Africa, contributed to considerable growth in export sales of +14% in 2016, all market segments taken together, thus confirming Lesieur Cristal’s leadership in North and Sub-Saharan Africa. For 2017, the company will be focusing on its role as an aggregator for upstream agriculture, developing its innovation pipeline and pursuing the conquest of new international markets, with plans for the USA, Egypt, Ivory Coast and Nigeria. PERSONAL CAREER DEVELOPMENT CENTRAL TO THE COMPANY’S SUCCESS The subsidiary stood out once again in 2016 for its commitment to HR innovations and to the career development of its staff. The accident rate (TF2) fell by 50% in 2016, enabling Lesieur Cristal to receive first prize in the Moroccan Accident Prevention Awards for major companies. In parallel, the “Live my life” operation enabled 40 employees from different departments to discover, each week for three months, the lives of their commercial colleagues and thus offer their support. Another important action concerned “Lesieur Cristal has talent”, an event which enabled all employees to visit stands dedicated to the company’s innovations. The company was also involved in shared initiatives in the context of the “Performance Challenges” and the “Nourrir la Vie” (“Food for Life” management program, which each year assemble Avril employees around an in-house challenge and initiatives that are simple to replicate and thus drive progress in the community. 2016 as seen by Samir Oudghiri Idrissi, General Manager of Lesieur Cristal Lesieur Cristal, a driver in relaunching the oilseed and olive sectors Since 2013, Lesieur Cristal has been working alongside the Avril Group to exploit cultivable land in the context of the Green Morocco Plan. Its actions to support an aggregation system involving 900 farmers enabled an increase in the land sown to sunflower and rapeseed – almost inexistent in Morocco in the early 2010s – to more than 50,000 hectares in 2016. The aim is to reach 130,000 hectares in 2020, two-thirds sown to sunflower, with sectors structured from upstream to downstream. A dynamic that is contributing to the vegetable protein independence of Morocco livestock farmers, thanks to the concomitant production of oilseed meals. The olive sector saw the same mobilization, its revitalization forming part of an aggregation program involving more than 200 farmers (500 between now and 2020) and centered on sustainable agriculture. Lesieur Cristal now owns three major olive groves (more than 350,000 olive trees planted on 1,500 hectares) and has equipped itself with a crushing unit with a capacity of 12,000 tonnes at the El Kelaâ des Sraghna site near Marrakech. The long term objective is to fulfil 40% of Lesieur Cristal’s olive oil needs. ACTIVITIES
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  • 64. AVR IL — ACTIVITY REPORT 2016 Oleochemicals A diversified model that creates value In the adverse environment of 2016, with its activities threatened by falling petroleum prices, Oleon nevertheless confirmed its strategic choices: to diversify its portfolio towards applications with high added value, to strengthen its knowledge of markets and customers and to invest in research to prepare the future. 6sites in Europe and Asia €632 M turnover More than €10 M spent on R&D ACTIVITIES
  • 65. 60 61 Breakdown of turnover 2016 Europe Asia North America 76%13% 11% CONSIDERABLE CAPACITY FOR RESILIENCE A major actor in renewable chemistry, Oleon develops, manufactures and sells biosourced molecules based on vegetable oils and fats. Its ambition is to be among the global leaders in its specialty by consistently offer more added value to its customers. In the unfavorable macroeconomic environment of 2016, Oleon achieved a good performance that demonstrated the resilience of its business model. By triggering a halt to oil drilling throughout the world, and particularly in the USA, the fall in petroleum prices had a serious impact on a major market for Oleon specialties. It also contributed to intensifying competition between molecules of fossil origin. To remain competitive, Oleon strives constantly to improve its productivity by controlling energy consumption, reducing waste losses and optimizing the supply chain, etc. This program for continuous improvement, adopted by all entities in the Group, enabled some major savings. This is an important advantage if we are to better resist the strong competition that characterizes the sector, notably in terms of commodity products such as certain fatty acids. CONTINUING TO DEVELOP SPECIALTY PRODUCTS To reduce its vulnerability to market fluctuations, create more added value and improve its customer retention rate, Oleon has for some years chosen to develop more technical products. This policy has been implemented in both specialty products and commodities, such as vegetable glycerin, whose quality and level of purity – certified by numerous bodies – offer opportunities for new and challenging applications. This is one of the vocations of the new glycerin packaging facility that opened in Venette, near Compiègne, in early 2016. With a design that ensures appropriate environment conditions, with air treatment and a contained filtration room, it complies with pharmaceutical and food industry guidelines that are extremely stringent with respect to hygiene. Another opportunity to create value is to develop applications driven by a brand strategy. Oleon has increased its presence at professional events and fairs, in order to publicize its know-how and innovations. For example, Jolee® , a range of innovative emollients for the cosmetics market, was presented at the In-cosmetics show in Paris (see opposite). With some twenty patents filed each year, Oleon still makes major investments in R&D on both its standard products and on more innovative processes such as biotechnologies. 2017 promises to be an important year for innovations in this field. The birth of Jolee® Presented at the In-cosmetics show in Paris, Jolee® is a new Oleon Health & Beauty brand in its Radia® range. Jolee® molecules have multifunctional properties that are also designed to facilitate the work of formulators because they can be used under cold conditions. This initiative illustrates the strategy adopted by Oleon Health & Beauty to give new impetus to its products and solutions: to focus on specialties while proposing innovative applications developed by Oleon’s formulation experts.
  • 66. MOUSSA NACIRI General Manager of the Oleochemicals Business Line In contrasting and unstable markets, our model will only remain resilient through continuing improvements to our industrial performance, the broad diversity of our activities and markets and very close proximity with our customers and partners.
  • 67. PUB oleon Jolee, Oleon Health and Beauty’s new top brand. Meet her at: www.oleonhealthandbeauty.com ® Natural emollients & emulsifiers with multifunctional and sustainable benefits.
  • 68. AVR IL — ACTIVITY REPORT 2016 Animal nutrition Defending the values of French livestock production In a difficult context for livestock production, Sanders stayed on course by addressing two challenges: pursuing its development in a declining animal nutrition market and contributing to consolidation of this market in order to gain competitiveness for French sectors. P 675 C P 280 C C 21 / M 100 / J 0 / N 0 C 100 / M 100 / J 0 / N 22 R 195 /V 0 / B 123 R 0 /V 54 / B 124 28sites, 25 of them in France €1.1 Bn turnover 3.4 M tonnes of feed produced using Sanders techniques ACTIVITIES
  • 69. 64 65 CONTRIBUTING TO MARKET CONSOLIDATION In 2016, the animal nutrition market in France experienced an historic decline of 4.8% or a drop of nearly one million tonnes of feed in volume terms. This downturn exceeded 10% in the ruminants market, and notably dairy herds that were penalized by milk prices. With sales prices lower than their costs, numerous dairy farmers simply ceased production. To this difficult context was added a health crisis that affected duck production in south-western France. Despite these adverse conditions, Sanders managed to sustain its volumes thanks to both the alliance signed in 2015 between Avril and the LDC poultry group, and to the policy on industrial contracts introduced four years previously with local partners, such as the cooperative groups Agrial in Brittany or Euralis in the south-west. These agreements are designed to develop processing activities in order to pursue investment, modernize factories and gain in competitiveness for French sectors. In 2016, Sanders acquired from Euralis the company Nutripalm, specialist in the manufacture of feeds for farmed livestock, and notably ducks bred and fattened in south-western France. Other acquisitions are also planned, with the same objective of consolidating the market. DAILY SUPPORT FOR BREEDERS Difficult periods also provide an opportunity to develop closer ties. By launching Pacte 360° on the ruminants market, Sanders can offer a new dimension for its technical sales teams. The aim is to help breeders produce better with ABERA – Almost 30 pork producers and farmers, members of the 100% French quality label “Engagés dans l’Élevage” and customers of Sanders Bretagne and Sanders Ouest, visited Abera. Towards the Sustainable Health Management of livestock units In adverse economic and health contexts, Sanders placed its expertise and that of its partners in the Sustainable Health Management of livestock units, at the service of French producers. The goal is indeed considerable: to reduce the consumption of antibiotics in livestock units in order to respond to demands from society and assure a long-term future for the sector. Sustainable Health Management (SHM) is based on a broadened vision of livestock farming and focuses on five pillars: the secure management of livestock, a balanced diet that favors the development of immunity, biosecurity, the use of natural alternatives and sustainable medication. To implement this approach, Sanders depends on the training of its teams and the close involvement of its partner livestock farmers. GB_AVRIL_ra_170x240_BAT.indd 65GB_AVRIL_ra_170x240_BAT.indd 65 15/06/2017 12:4315/06/2017 12:43
  • 70. BERNARD MAHÉ General Manager of the Animal nutrition Business Line As the leader in animal nutrition in France, Sanders displays its commitment through important efforts regarding the sustainable health management of livestock units. Our ambition is to support breeders in adding value to their products and satisfying the demands of consumers.
  • 71. 66 67 less, and to enhance their performance through tailor-made support. The principle of Pacte 360° is to propose a full diagnosis of a livestock unit and identify levers that could improve profitability, after which a progress plan is put in place with the farmer. To support these recommendations, technical datasheets have been compiled with MiXscience which contributes its scientific know-how in animal nutrition and health. This consulting approach is based on Sanders’ historical expertise in livestock management and on the close links between technicians and breeders. In 2017, a challenge will reward the best Pacte 360° operations. ADDING VALUE TO SUSTAINABLE PRODUCTION MODELS One of Avril’s challenges in the animal sectors is to contribute to developing a sustainable production model that associates all links in the value chain. The aim is to provide consumers with products that are guaranteed in terms of animal welfare and nutritional quality, as well as ensuring a source of income for farmers. Based on its “Nourrir nous engage” (Food is our commitment) signature, Sanders is a key player in this approach, which in 2016 was illustrated by several highlights. First was the success of the first sector of excellence, “Engagés dans l’élevage” (Committed to Livestock) which was created in partnership with Fleury Michon: the pigs are fed a non-GMO diet of French cereals and raised without antibiotics as from the end of weaning (the aim between now and 2020 being to achieve zero antibiotics as from birth). This exclusive sector already involves 41 enthusiastic breeders who are wholly dedicated to this production (155,000 pigs), in five French departments. Thanks to the commitment of all partners, ham bearing the “J’aime - Engagés dans l’élevage” (I like – Committed to Livestock) label has become the ham that is preferred by the French*. For three years, Sanders has been developing a global approach to livestock management in its sectors – Sustainable Health Management – in order to reduce the use of antibiotics. Boosted by the results to date, the brand is now seeking to promote these good practices to a maximum of breeders (see opposite). Similarly, in partnership with teams from MiXscience and Theseo, 200 technicians and veterinarians have worked together on the theme of water control as a tool for the technical and health management of livestock units. Finally, Sanders was one of the first signatories of the Duralim Charter, a collective approach to improving the sustainability of livestock feeds, designed to underpin consumer confidence in agriculture and food. * UFC-Que Choisir survey of 30 ham products (June 2016). The international presence of Sanders 2016 saw the opening of the new SIM Sanders cattle feed production plant in Algeria. It has already reached saturation point, and planned work on its enlargement will enable it to increase production from 70,000 to 120,000 tonnes. Sanders produced 100,000 tonnes of feed in 2016 at its international sites, with excellent results in Algeria and Serbia. “Engagés dans l’élevage”: a sector of excellence that has proved its worth In the “Engagés dans l’élevage/J’aime” (Committed to livestock/I like) sector of excellence, relationships with breeders, and the know-how they can contribute, are crucial. We have long been committed to an approach free of antibiotics and GMO feeds, because quality is essential if we are to add value to our products. In the context of our partnership with Avril and Fleury Michon, we know to whom we are entrusting our animals. We know what will happen to them and we are also sure that our work on quality is respected throughout the value chain. That makes us very proud. ROLAND LEFEUVRE Pig breeder in the Côtes-d’Armor region
  • 72. AVR IL — ACTIVITY REPORT 2016 Avril Animal Specialties Conquering new markets Driven by a clear vision and ambitious development strategy, the most recent Business Line in Avril’s animal sectors achieved some concrete advances for the future, notably with respect to innovation and international reputation. €134 M turnover 80% nutrition-health 15% biosecurity 5% liquid supplements 12units operating in 7 countries ACTIVITIES