All our industrial activities are based on the large-scale processing of vegetable raw materials, also known as green biomass. We are organised into five business groups and a number of smaller business units.
Many millions of tonnes of sugar beet are processed into granulated sugar in Suiker Unie’s factories every year. From growing the sugar beet to delivering sugar and other products to its customers at home and abroad, the company insists on high quality and sustainability throughout the supply chain.
In the Netherlands the beet are processed in sugar factories in Dinteloord and Vierverlaten. The company also has two speciality factories: the one in Roosendaal makes mainly liquid products and the one in Puttershoek makes dry specialities. A third sugar factory is located in Anklam in the northeast of Germany. From its home market in the Netherlands, Suiker Unie is spreading its wings ever wider, especially in northwest Europe.
Performance and results in 2018
The abolition of the EU sugar market organisation was expected to hit Suiker Unie’s results and it more than lived up to our fears. The impact was actually far worse than foreseen. The record harvest both in Europe and worldwide in 2017 exerted so much pressure on selling prices in 2018 that contracts were concluded at a loss during the year. European stock levels must be run down even further if price erosion is to be brought to an end. Exports offer little if any comfort in view of the high stock levels and associated low prices on the world market. The situation showed signs of reversing at the beginning of 2019 and it seems unlikely that sugar prices on the world market will fall any further; they may even begin to pick up again. Despite all its preparations for the end of the quota system, Suiker Unie closed the financial year with a loss. The smaller harvest and reduced sugar production in the 2018 campaign are not unwelcome given the need to reduce stock levels but the business group will have to take an even more critical look at how it can keep its costs as low as possible.
New sales markets
Very little use is being made of isoglucose as a substitute for sugar, perhaps because of the low sugar prices, but the trend of using less sugar in soft drinks is continuing. With very little growth expected in European sugar consumption, new sales markets are being explored outside the EU and new applications are being sought for sugar and other sugar beet components. The acquisition of Green Protein, a start-up that extracts protein from beet foliage, is an example of this growth ambition. Vegetable proteins have a promising future, partly as replacements and partly as supplements for animal proteins.
The 2018 growing season will be remembered for its high temperatures and lack of rainfall during the summer. The root crop was disappointing, especially in areas that could not be irrigated. The beet campaign was shorter than initially projected, 120 days in the Netherlands and just 101 days in Anklam in northeast Germany. The sugar yield ultimately came to 13.2 tonnes per hectare in the Netherlands and 11.1 tonnes in Germany. The Dinteloord and Vierverlaten factories processed a total of 6.6 million tonnes of beet into 1.1 million tonnes of sugar. In Anklam, 1.2 million tonnes of beet were processed into sugar and bio-ethanol. Owing to the lower root yield, less beet pulp was available for the livestock market.
Green Energy, the green gas producer at the sugar factories, can look back on a successful year. It produced approximately 25 million m3 of gas at the factory in the Netherlands in 2018 and a further 10 million m3 at the factory in Anklam. Capacity at the two factories will be stepped up in order to sell more green gas.
Performance and results in 2018
Aviko turned in good financial results for the third year in succession. The business group intends to grow further by investing in product and market development and in production capacity. One of its larger investments relates to a new cold store at the French fries factory in Steenderen that is due to come into operation in the course of 2019. Demand for French fries and potato products is growing, especially outside western Europe. Aviko intends to grow in step with the market, serving its customers with a balanced mix of products to achieve its growth targets. The current production facilities are running close to capacity. Several options to expand capacity will be studied this year.
Aviko consolidated its position in the main European foodservice markets during the year. It became a market leader in central and eastern Europe, where it profited from the strong growth of consumption. It is difficult to foresee what impact Brexit may have. World consumption of potato products looksset to increase. Exports of French fries to the world market remain an attractive option to Aviko. There are some concerns, though, about protectionist measures in South America. SuperCrunch Fresh was successfully launched during the year. These fries were developed especially for the foodservice and snack bar segment with the promise that they will stay crunchy longer than other fries: ‘Fries to take home’. The specialities factory in Amberger, Germany, was closed towards the end of 2018. Several interventions had failed to improve the factory’s results and make it a profitable part of Aviko. The Aviko Snow Valley joint venture in northeast China was dissolved at the end of the year. The company was performing well but it was proving difficult to work with the Chinese partner in this very promising growth market. Aviko now has its hands free to pursue its own strategy in China. Aviko Rixona performed well. The drum dryer in Venray came into full operation in 2018. The potato flakes factory in Gansu, China, also made a strong contribution to the result.
The investment in the new cold store in Steenderen will cut Aviko’s logistics costs and improve its customer service. A new store for chilled and fresh products will serve the same goal. Water treatment has been improved at Rain am Lech in Germany. This will enable an increase in production capacity and be of benefit to the environment. An investment is planned for Aviko Norden to consolidate its position in added value products. Aviko is investing not only in tangible assets but also in safety in and around its factories and in training for all members of staff.
Buying and selling policy
Aviko buys most of its raw material, potatoes, on contract. This practice gives Aviko supply security and price stability on the one hand and growers a guaranteed price for their products on the other. Aviko has noticed that potato growers are changing from suppliers to partners in the supply chain. It is therefore strengthening its ties with contract growers. Position and risk management of raw material supplies remain an Aviko priority. On the selling side, Aviko is increasingly positioning itself as an added value producer. The strong Aviko brand contributes to the stability of selling prices. The combination of this buying and selling policy has led to a steady increase in the financial result over the past three years. Aviko has the ambition to continue this trend.
Sensus produces and supplies the innovative food ingredients inulin and oligofructose. These are prebiotic fibres that are perfectly suited to replace sugar and fats in foodstuffs that are essential to a healthy and nutritious diet. The company has two production facilities, in Roosendaal and Zwolle, where it makes not only standard products but also completely new concepts and applications in cooperation with its customers. The customers are professional buyers in the food industry in Europe, North America and Asia, working mainly in the bread and pastries, dairy, breakfast cereal and baby food industries.
Performance and results in 2018
The European tendency to reduce sugar consumption has boosted inulin sales in Europe. Sales in the United States were lower than expected. The Food and Drug Administration’s recognition of inulin as a dietary fibre will lift sales among existing customers and generate interest among new ones in 2019. The US remains an attractive sales market for Sensus. Increased competition in the US, however, exerted pressure on the margin and reduced Sensus’s result. Sensus is constantly seeking new inulin applications, often in collaboration with its customers. The verifiable sources of its inulin and the inulin’s natural, vegetable-based pedigree are valued by consumers and are therefore growing in importance to Sensus’s professional customers. In Asia, a steady growth market, inulin is finding its way to the infant formula market and is being applied in specific products as a prebiotic fibre. China is a particularly promising market for further sales growth.
The extreme growing season in the Netherlands delayed the growth of chicory roots. The subsequent long, hot and very dry summer reduced the root and inulin yield. The chicory campaign lasted 16 weeks and was concluded before the end of the year. The reduced area under chicory brought the stock of inulin more into line with market demand. An increase in the growing area is required for 2019 and more hectares have been contracted. Sensus is making good progress to achieving its goal of producing 10 tonnes of inulin per hectare by 2023. This prospect is encouraging growers to keep chicory in their crop plans and ensuring that Sensus will continue to receive enough raw materials of sufficient high quality and quantity.
Sensus is working with several parties and stakeholders, including provincial and municipal authorities to study ways to permanently reduce the carbon footprint of the inulin production chain. Its studies cover alternative energy sources, biomass digesters, more sustainable growing methods, tillage techniques and pesticide use. Investments in the sustainability of production and processing reflect market demand and match the group’s sustainability agenda. With a view to the future, Sensus will continue to prioritise growth and market share. Growth will be achieved through the development of new customers and new applications that accentuate the proven origins and natural properties of inulin.
SVZ supplies high quality fruit and vegetable ingredients to food manufacturers all over the world. It produces purees, juices and concentrates for a variety of applications in drinks, dairy products, ice cream, jam, cakes, soups and baby food. The company has more than 150 years of experience processing fruit and vegetables. This wealth of experience in combination with modern factories and sustainability initiatives guarantee the consistent high quality of SVZ’s ingredients. SVZ tailors its services and products to meet the customers’ wishes.
Performance and results in 2018
SVZ’s result for the year was lower than that for 2017. The extreme heat and drought also affected this business group. The carrot harvest, for example, was disappointing. The dry, hot summer in Europe was favourable for the growth of red fruit but the very large harvest of raspberries and other fruit depressed selling prices and margins. Conditions were more favourable in SVZ’s second home market, the United States, than in Europe. Crop yields and selling prices were more stable. The processing capacity of the factory in the northwest of the US is being expanded and it is due to come on stream in the third quarter of 2019, in time to process the vegetable harvest.
SVZ is an accredited supplier of sustainable fruit and vegetable ingredients and is aiming for 100% sustainable procurement by 2030. Biodiversity and water management are becoming more prominent issues in the areas that grow SVZ’s raw materials. SVZ works with its growers and provides them with training courses on, for example, food and product legislation and growing techniques that increase the yield per hectare and that make less use of pesticides. SVZ wants to prevent waste and is working on the complete and optimal use of raw materials. SVZ will widen its cooperation with customers in the fields of product development and innovation in the year ahead. With more than 150 years’ experience in the supply chain, the production process and its sales markets, SVZ can respond alertly to the growing public demand for organic products and greater transparency in the food industry. SVZ is also working on ways to enter new sales markets, for example by marketing smaller packages and matching products.
Performance and results in 2018
Duynie Group celebrated its 50th anniversary with its staff, suppliers and customers in 2018. The group highlighted its many talents and its ambitions. Financially, Duynie Group’s contribution to the result was in line with expectations. Food companies supply their co-products to Duynie, which processes and sells them in a wide range of market segments. Duynie Group has positioned itself as a very professional player in its markets. Suppliers are increasingly turning to Duynie for advice on how they can upgrade their co-products into more useful applications with higher added value.
The market’s recognition of Duynie’s added value is helping to consolidate the company’s standing in the market. All efforts are geared to strengthening the market position. The investment programme is also directed at this goal. Construction of a CO2-neutral factory for Duynie Ingredients in Cuijk is making steady progress; the factory is designed to meet the growing demand for responsibly produced, high quality pet food. Novidon is now also making starch products for use in food applications for human consumption. Duynie is studying the extraction of protein from vegetable raw materials. It is working with other Cosun business groups that are active in the same area.
Duynie Group has opened a sales office in southwest Poland to serve the regional animal feed market. The production facility in the Czech Republic was closed in 2018 and the plant was transferred to Wrexham in the United Kingdom. With a viewto the uncertainty surrounding Brexit, it is advisable to have sufficient production capacity in the UK.
Sustainable energy consumption
Duynie Group has two sustainable energy operations. AgriBioSource (ABS) supplies components to companies that are active in the biomass digester market. Duynie Group has also developed a heat recovery concept that will be trialled at the Aviko site in Proven (Belgium) in 2019. The concept comprises a heat pump that captures low energy heat and converts it into usable energy so that less ‘external’ energy is required. If the system proves its worth in practice, Duynie Group intends to introduce it at several of its suppliers and so substantially reduce the carbon footprint in the supply chain. Further digitisation remains a priority. Digital trading platforms are developing rapidly and more data are being collected on location. Digitisation allows Duynie Group to perform stock management for both its suppliers and customers and optimise logistics in the supply chain. This, too, can help reduce the carbon footprint.