Corporate Sustainability Report Agrifirm 2011

Working together on sustainability 2011 Corporate Sustainability Report

link to success

Facts and figures • Cooperative with over 17,500 members

• Managed by a Supervisory Board (12 members) • Head office in Apeldoorn, the Netherlands

• Various subsidiaries operating in the Netherlands, Belgium, Germany,

France, Spain, Romania, Hungary, Poland, the Ukraine, Russia and China

• Revenue: D 2.272 billion

• Profit (EBIT): D 17.5 million Sales volume (x 1,000 tonnes) Compound feed

4,135

Wet feed

2,124

Cereals, potatoes, onions and carrots

663.2

Fertilisers

391

Crop protection products (D millions)

119.5

Composition of personnel complement

As a result of the merger in 2011, the number of employees that left the organisation was higher than planned.

The total number of FTEs in 2011 was 3,054. Below is a summary of the key personnel figures.

Gender

Distribution of total number of employees

26% Female 74% Male

Employment contract

15% Definite 85% Indefinite

Age 23% <29 years 53% 30-50 years 24% 50< years

Job families 4% 41% 13% 2% 38% 2%

Management Commercial Staff, Support and Services Research and Innovation Operations Others

2% 23% 18% 5% 4% 5% 4% 1% 9% 6% 1% 1% 3% 18%

Agrifirm Group Agrifirm Feed Nuscience Group Agrifirm Deutschland Agrifirm Polska Agrifirm Magyarország Zrt Agrifirm Co-products Agrifirm Belgium Agrifirm Plant Abemec Group Oldambt B.V. Exlan Consultants CCL Nutricontrol Agrifirm Winkel B.V.

Preface Behind me, surrounded by scaffolding, is the building that as of June 2012

will become our new head office. An energy efficient building that is entirely

designed for the new way of working. In this present Corporate Sustainability

Report we report on our accomplishments in the area of sustainability in 2011.

Building for the future and contributing to sustainable food production: in this report you will read about Agrifirm’s specific actions in this area.

Sustainability and innovation are important pillars of our strategy.

Collaboration is essential to be successful in this area. Such collaboration

takes many forms: with colleagues, close by or from different parts of the

organisation, with customers and with companies, and with stakeholders within and external to the field of agriculture. In our view, collaboration within the chain is also crucial to achieve breakthroughs in the field of

sustainability. The foundation for all forms of partnerships is our sensible attitude. This is why Agrifirm continuously asks itself: ‘Can our company

exercise significant influence on the relevant subject area.’ Indeed, we can

only make a substantial contribution on the basis of our core competencies.

This report describes the sensible steps we take this way. You will repeatedly come across the green picnic table in various photos as a symbol of consultation and collaboration within the chain. An approach that once again produced results in 2011 that we are justly proud of.

Ton Loman

CEO, Agrifirm

Agrifirm, a link to success Agrifirm is a cooperative in which more than 17,500 Dutch enterprising farmers and horticulturists have bundled their strength.

This bundling provides a sustainable advantage with regard to high quality products such as animal feeds, sowing seeds, fertilisers and crop protection products.

In 2010, the Agrifirm cooperative in Meppel and the Cehave Landbouwbelang

cooperative in Veghel merged to form a single cooperative Agrifirm U.A. After completing its first full year, the new enterprise is on track. The new firm has

Our mission: to create sustainable value for members.

a recognisable profile on the market. We function as a â&#x20AC;&#x2DC;link to successâ&#x20AC;&#x2122; for

farmers and horticulturists and focus on livestock farming, arable farming and horticulture throughout the Netherlands. In addition, we have an

international network of subsidiaries. We supply products and services for feeding animals and cultivating crops. We provide our customers with solutions that produce better results in this respect.

Mission

The role of the Cooperative has of course grown along with developments in the market and in society. The interests of members are decisive in this respect. This is why Agrifirmâ&#x20AC;&#x2122;s mission is as follows: to create sustainable value for members. We do this by collaborating with the right partners,

using fair business practices and delivering quality. We support farmers

and horticulturists with sustainable, profitable concepts for achieving optimal results. The increase in the value of our enterprise, by strengthening our

market position and profitable growth, is returned to our members through profit distribution. Four strategic pillars aid us in achieving our mission:

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Agrifirm

A cooperative with six divisions Farmers and horticulturists have worked together in cooperatives for over 200

years. This makes them stronger in terms

of knowledge development, procurement and sales, for example.

Agrifirm, as a cooperative comprising over

17,500 farmers and horticulturists, is living proof of the strength of this principle. Our

six divisions offer a wide range of products and services for the agricultural sector in the Netherlands and in other countries within Europe.

• Feed Division: production and sale of

animal feeds; consultancy and research.

• Agriculture Division: sale of sowing seeds, fertilisers, crop protection

products; collection and sale of cereals, onions and carrots; consultancy and 1. One Firm

A large enterprise requires an operating structure that enables us to stay

close to our customers. This is why Agrifirm has decided to accommodate its

activities in independent subsidiaries. However, to be successful and to exploit the benefits of a large organisation it is important that we bundle our

knowledge and that we collaborate. This is why we are working on creating a

strong One Firm Agrifirm with a high level of synergy between the companies.

2. Partnerships

The key to success is not only collaboration within Agrifirm, but collaboration

with customers and within partnerships as well. Agrifirm and our independent subsidiaries are consciously seeking out partnerships that make us stronger and contribute to achieving our objectives.

3. Innovation

Innovation is an important condition for making progress. Innovation forms

the basis on which agricultural entrepreneurs justify their existence. Agrifirm

research.

• Co-products Division: processing of dry

residual products from the food industry into (raw materials for) animal feeds.

• Specialties Division: production of

premixes, mineral mixes, protein-rich

raw materials and nutritional concepts for animal feed.

• Services Division: sale of agricultural machines; technical and legal

agricultural advice, laboratory research for the foodstuffs production chains;

production and sale of artificially dried fodder legumes and straw products;

sale of agricultural consumer products.

• Participations Division: minority interests in several companies.

can and wants to play a key role in this respect. Research & Development

Awards for Agrifirm

it can produce results-oriented innovations, now and in the future.

Agrartechnik Service Award this year. This

consequently occupies a central position within our organisation so that

4. Growth in revenues and results

We remain a healthy and strong organisation due to our national and

international growth. Growth makes us an attractive company for well-

educated and motivated professionals who produce results and provide

expert advice within Agrifirm and for our customers. Growth also produces cost savings, procurement benefits and it strengthens our collective innovative strength.

Abemec Veghel was presented with the

international award assesses companies in the agricultural equipment sector in terms of their strategy, marketing and service, as well other aspects. Agrifirm Hungary won the Super Brand Award 2011 for its ‘Kabai’ brand. The award is presented for ‘strong brands’ that position them-selves in excellent ways within their sector.

AgriFirm

5

Opting for sustainability

Sustainability and innovation represent key brand equity for Agrifirm and are the pillars of its strategy. It is our ambition to be part of sustainable food chains with our business operations and to contribute in this way to a healthy world for future generations.

In addition, we view investing in sustainability as an important precondition for continuity. For our own enterprise, as well as that of farmers and horticulturists.

Sustainable solutions must be financially profitable as well. This sharpens our focus.

Our farmers and horticulturists operate in highly competitive markets.

Prices for dairy, meat, eggs, cereals and other products are set on

international markets with strong competition. Sustainable solutions must therefore be financially profitable as well. This basic premise does not

represent an obstacle to our ambition; instead it sharpens our focus. Most certainly also because our innovation strategy supports our sustainability strategy: efficient production of food using healthy plants, healthy soil,

healthy animals and the optimal use of residual flows from the food industry.

Links in the chain

Characteristic of Agrifirmâ&#x20AC;&#x2122;s sustainability strategy is that we not only

scrutinise our own operations, we also aim to take all links in the chain into

account: from the cultivation of raw materials right through to the point at

which the food is served to the consumer. Within every link there are issues and opportunities for increasing the level of sustainability. For example in the area of energy consumption, emissions and impact on biodiversity.

6

Agrifirm

Agrifirm’s sustainability policy comprises four themes.

Working on sustainable raw materials

Efficient production and logistics

Enabling plant and animal performance

Contributing to a sustainable consumer supply

Our employees: the foundation for success

Agrifirm tackles the subject areas to which it can contribute on the basis of the four overarching themes and its core activities. Aside from this,

our employees have a key role to play in our sustainability strategy. Their

safety, commitment and motivation form the core of sustainable enterprise.

Collaboration with stakeholders

Agrifirm operates in a large number of markets/market segments.

Collaborating with our stakeholders in these markets and involving them in

our policy is of key importance in order to be able to optimally fulfil our role.

We do this in various ways, for example, by participating in partnerships, entering into short-term agreements as well as long-term agreements,

organising meetings and workshops and by participating in research projects.

Our key stakeholders are the cooperative’s members and our customers.

However, suppliers and other chain partners, ranging from raw materials to

Collaborating with our stakeholders and involving them in our policy is of key importance in order to be able to optimally fulfil our role.

consumer products, are also indispensable. Aside from this we collaborate with various research organisations.

Anchoring policy

Our goal is to anchor our sustainability policy in the core activities of

our organisation. Agrifirm’s operating companies have been given the

responsibility to actually realise this. Innovations are realised in collaboration with the Agrifirm Innovation Centre and other innovation departments

within Agrifirm’s subsidiaries. The Corporate Affairs Department operates as

the driver in this respect. Furthermore, this department is also responsible for carrying out strategic initiatives at the corporate level.

Agrifirm

7

Working on sustainable raw materials Sustainable production starts at the front of the chain: with the procurement of sustainable raw materials.

Agrifirm stimulates the sustainable cultivation of soy

and explores alternative sources of protein. In addition,

we process large quantities of residual products released

by the food industry into high quality animal feeds. We also consult with suppliers about the sustainable use of raw

materials and the production of crop protection products in the agricultural sector. In terms of activities in the area of producing sustainable raw materials it is important

that they produce demonstrable environmental gains.

Working on sustainable raw materials

Sustainable soy throughout the entire chain The entire production chain for animal products in the Netherlands is

collaborating as part of the ‘Chain Transition to Sustainable Soy’ project

to migrate to 100% sustainable soy effective 1 January 2015. Animal feed

producers, livestock farmers, the dairy, meat and egg sectors and producers of foodstuffs are joining hands. Agrifirm is closely involved in this project

The parties involved in the animal products production chain will collaborate through to the end of 2014 with the objective of fully migrating to the use of sustainable soy by 2015.

via the Nevedi sector organisation. In total, the companies, together with

the Initiatief Duurzame Handel (Sustainable Trade Initiative) are investing several million euros in creating a sustainable chain.

Soy meal, the portion of the soybean left over after pressing to extract the

vegetable oil, is a key raw material for producing high-protein animal feeds.

The demand for soy for use in food, animal feed and as a biofuel is sharply

increasing throughout the world. This is increasing the area cultivated with

soy, particularly in South America. It is important that this cultivation is not at the expense of the tropical rain forest.

Sustainably cultivated soy consists of soy cultivated in accordance with the

principles of the Round Table on Responsible Soy (RTRS). Agrifirm is a member

Alexander Romme (l), Bonda Quality Manager and Marcel Lipsch (r), Bonda Sales Manager, at the table at Agrifirm’s subsidiary Profarm in Veghel. In the background are raw materials for animal feeds made from residual products from the food industry.

of this organisation. The parties involved in the animal products production chain will collaborate through to the end of 2014 with the objective of fully migrating to the use of sustainable soy for the production of meat, dairy, eggs and other foodstuffs in the Netherlands by 2015. The companies

involved intend to purchase increasingly higher volumes of sustainably produced soy: 500,000 tonnes in 2012, 1,000,000 tonnes in 2013 and 1,500,000 tonnes in 2014.

Local soy cultivation trials Agrifirm is actively involved in trials involving the cultivation of soy in the Netherlands. The harvest until now is very reasonable, but not yet competitive with wheat. However, increasing numbers of farmers are interested in experimenting with soy cultivation themselves. Once success is achieved in making soy varieties even more suitable for the North-Western European climate, the yields in the near future will more closely approach

Financieel rendement

those of wheat. Local soy cultivation can then become a sustainable alternative for soy from South America.

Wheat

Soy

2012

2015

2018

2021

Co-products as raw materials for animal feeds

Kernvoerconcept (poultry concentrated feed concept): use locally cultivated wheat

In developing new feed concepts, Agrifirm devotes attention to the smart use of raw materials. An example is Agrifirm Feed’s ‘Kernvoerconcept’

(concentrated feed concept) for broilers. This concept has been available in the market for approximately four years.

In developing new feed concepts, Agrifirm devotes attention to the smart use of raw materials.

‘Kernvoer’ consists of concentrated compound feed. Broiler farmers are

supplied with this feed and supplement it themselves with locally cultivated wheat until the appropriate proportion is achieved. This means that the

wheat no longer needs to be imported from other countries. Furthermore, it is no longer necessary to process it in the factory.

This adjustment yields significant savings in the form of the number of

kilometres of transport and energy consumption: 1,378 ton CO2-eq per year.

This is equivalent to a 2.4% saving in comparison to the average for the

production of broilers in the Netherlands. For animals, ‘Kernvoer’ mixed with wheat is just as healthy as regular feed.

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Agrifirm

Reuse of co-products from the food industry

46.3%

of all dry raw materials that Agrifirm

processes into livestock feeds consists of

co-products that originate from the food

industry. These are left over as part of the

production of, for example, bread, cookies, margarine, beer and sugar. A large share of these products is also derived from the biofuels industry. Aside from this,

producers are faced with a large number of residual batches. These products,

provided they are mixed to create an

optimal composition, are extremely well suited as raw material for animal feeds.

Percentage co-product per animal type

Healthy chickens thanks to new raw materials package

66.0% Dairy cattle

Agrifirm continuously researches the possibilities of using more sustainable

raw materials in animal feeds. In 2011 this resulted in a new feed concept for laying hen farmers: VIGOR. The innovative package of raw materials for this

feed not only has a low carbon footprint, it is also proving to be very healthy

for the chickens. This makes it a good example of how innovation can produce double sustainability gains.

35.9% Pigs

VIGOR promotes intestinal health, digestion and feed utilisation among laying hens. Recent research conducted by the Animal Health Service

furthermore shows that VIGOR has a demonstrably favourable effect on chronic gastroenteritis among chickens. Intestinal health problems can

represent a major loss item for laying hen farmers. Chronic gastroenteritis

32.7% Laying hens

causes a high failure rate and lower production.

On an annual basis, this feed concept reduces CO2 emissions by 3.1%

throughout the entire chain in comparison to traditional feeding methods.

42.3% Broilers AgriFirm

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Efficient production and logistics Efficiently processing raw materials and transporting products

to customers are core Agrifirm competencies. Reducing energy consumption is the spearhead of our sustainability policy in this link. Particularly in the area of transport and logistics

we have been achieving significant savings by using smarter scheduling and driving more efficiently. We will continue

our efforts in this domain over the coming years. In addition, the development and use of renewable energy sources is

important. The precondition Agrifirm applies in this respect is that this energy is not extracted from biomass that can also be used as food or animal feed.

Efficient production and logistics

Overview of energy consumption We introduced the ‘Energy Efficiency Index’ in 2011 to enable us to identify the energy consumption per unit of product at the production sites that consume the highest levels of energy. The index identifies the energy

efficiency of a certain year in comparison to the reference year. By repeating

The use of the Energy Efficiency Index provides a good picture of the results produced by efficiency measures.

this survey on an annual basis the energy efficiency trend at each site becomes evident. Agrifirm Belgium already made a successful start on this in 2010. The use of the Energy Efficiency Index provides a good picture of the results that efficiency measures can produce. The following specific measures to reduce energy consumption were taken in 2011:

• Agrifirm Polska acquired new steam boilers for its Szamotuly and Topola sites that consume about 10% less energy than the old ones. Agrifirm Belgium already invested in a new steam boiler in 2010 for its Grobbendonk site.

• CCL Nutricontrol better coordinated the operation of its equipment, for

example, a steam boiler that consumes a great deal of energy, with shift working hours. Furthermore, the company paid better attention to the lighting and heating of the building.

• Oldambt B.V. at the Opeinde site now dries the alfalfa cultivated by suppliers

Agrifirm colleagues Marc Leirs (l), Jocelin Lemahieu (m), Patrick deReyck(r) - Technician, Technical Manager and Maintenance Technician, respectively in discussion at the Grobbendonk production site where Agrifirm in 2010 installed a steam boiler designed to reduce energy consumption.

first on the land and only then artificially. This saves on the energy consumed by the dryer.

The Nuscience Group (Belgium) improved the quality of feed pellets in 2011.

This resulted in an increase in energy consumption, which is reflected in the elevated Energy Efficiency Index.

Energy Efficiency Index

103

86 94 95

108

86 100 118

124 119

96

96 92

Agrifirm Polska Margonin Szamotuly Topola

Agrifirm Deutschland Neuss

Agrifirm Magyarország Zrt Kaba Gyor Bocs

Nuscience Group Drongen Baasrode

CCL Nutricontrol Veghel

Oldambt B.V. Oldambt Opeinde

140 120 100 80 60 40 20 0

Agrifirm Belgium Grobbendonk

The index, by production site, identifies how the 2011 energy efficiency compares to the 2010 reference year.

In 2011 Agrifirm Feed Nederland, at the initiative of Nevedi, participated in a national energy scan. The data from this scan will only be available in 2012.

Smart energy savings

Agrifirm 2011 energy consumption

The following quantities of energy were used by the companies in the

Agrifirm Group last year: Gas (m3) 8,732,903, Gas (kg) 19,414. Gas (l) 244,728, Electricity (kWh) 123,306,678, Coal (tonnes) 11,837, Heating Oil (l) 1,141,623,

Diesel (l) 5,518,940 and Petrol (l) 211,472. These figures are partially based on estimates.

We promote the use of renewable energy, however, we do not invest in power generation plants ourselves.

Renewable energy

The development and use of renewable energy sources is an essential

element in using energy efficiently. Agrifirm realises the importance of this and where possible wants to make a contribution. At the same time, we do

not consider the large-scale generation of energy one of our core activities.

This means that we do not invest in plants that generate power or heat. On

the other hand, we do encourage our subsidiaries to make use of renewable energy. In this respect we consider it important that if an energy source consists of biomass, it cannot be used as food.

Belgium is a front runner within the Agrifirm Group. In 2011 the company

exclusively purchased green energy. In 2011, in Texel, Agrifirm Plant made

roof surface area available for the installation of solar panels. For Agrifirm as a whole, 3.5% of all energy consumed was derived from renewable sources in 2011.

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Agrifirm

Feed miles and land use Agrifirm each year calculates the number of kilometres of transport (‘feed miles’) and the area of agricultural land (‘land use’) required for the production of a

kilogram of milk, pig meat, poultry meat

and eggs. The calculation includes all links in the chain, from the cultivation of raw materials for animal feeds up to and including the products produced by

livestock farmers. The average land use

for feed production remained virtually the same as it was in 2010. On the other hand the average distance travelled by raw

materials clearly declined in 2011. Greater distances were only travelled for the pig

sector, due to the increase in the import of cheaper cereals from South America.

Additional information about the

calculation of land use and feed miles is available at www.agrifirm.com.

5 4 3 2

Transport

1.0 m2/kg

4.0 m2/kg

4.5 m2/kg

1.1 m2/kg

Milk

and make improvements where possible.

Broilers

Pig meat

the quality of management operations. We monitor logistics processes

4.8 m2/kg

Excellence programme was introduced throughout Agrifirm to improve

4.4 m2/kg

to organise transport efficiently, including energy efficiently. The Business

Eggs

3.9 m2/kg

total energy consumption and CO2 emissions. It is therefore important

4.0 m2/kg

1

Transport and logistics are responsible for a significant portion of the

At Agrifirm Belgium this resulted in an efficiency improvement of loading and waiting times, travelling times, transport distances and fuel consumption.

An initial measurement was also carried out at Agrifirm Plant to enable the

company to monitor transport efficiency. The company has been working for

years on logistics improvements. This measurement makes the effects of this work more visible.

2011

2010

2,174 km/kg

2,021 km/kg

6,526 km/kg

5,700 km/kg

7,407 km/kg

have an Energy Label A.

6,780 km/kg

will have to drive greater distances. From now on they will do so in cars that

4,147 km/kg

efficient car lease. Due to the merger and the head office’s new location they

4,593 km/kg

At Agrifirm’s head office in Apeldoorn, 34 colleagues have signed an energy

15

Enabling plants and animals to perform The third link, i.e. enabling plant and animal

to perform, also forms the core of our business

strategy. By facilitating farmers to enable plants

and animals to perform optimally on the basis of

our products, we contribute to reducing the food

productionâ&#x20AC;&#x2122;s ecological footprint. The good health of animal, plant and soil is a precondition for this.

The Agrifirm Innovation Centre and the other R&D departments have a pivotal role in developing

product innovations in this area together with research institutes and actual practice.

Enabling plants and animals to perform

Sustainability scan: people, planet, profit To make the role played by innovation in relation to sustainability tangible, Agrifirm developed a sustainability scan in 2011. This scan illustrates

the contribution to people, planet and profit made by one hundred key

innovation projects. The scan shows that these innovation projects not only have a positive effect on the farmer’s yield (profit), but also, for example, on people’s and animal’s health (people), biodiversity and the emission

The total overview of the scores identifies the sustainability issues to which Agrifirm’s innovations make a contribution.

of greenhouse gases (planet).

The key sustainability issues for Agrifirm were defined for the scan.

Each project was subsequently assigned a score of 1 or 0 for each issue (project demonstrably contributes to an issue or not). The total overview of the scores identifies the sustainability issues to which Agrifirm’s innovations make a contribution. Over the coming years, the tool will be deployed to evaluate the innovation policy as well.

Dairy farmer Albert Albers (seated left) receives Agrifirm colleagues Aaldrik Venhuizen (standing left), Agrifirm Plant R&D Manager, Alexander Drees (standing right), Business Excellence Director and Albert van den Belt (seated right), Agrifirm Innovation Centre R&D Manager.

The scan demonstrates which themes are priorities within our sustainability policy. For the Agrifirm Feed and Agrifirm Co-products divisions that are

supported by the Agrifirm Innovation Centre in terms of research, this consists of reducing the use of antibiotics and reducing the phosphate surplus in

livestock farming. Agrifirm Plant is focused on improving biodiversity by paying attention to soil health and soil fertility. Reducing the carbon footprint is becoming an increasingly more important theme Agrifirm-wide.

Contribution of innovation projects to sustainability The graph below identifies the percentage of Agrifirm innovation projects that make a contribution to Agrifirm’s key sustainability issues.

People Planet

Avoiding antibiotic resistance in humans Improve animal/farm phosphate efficiency

Agrifirm Innovation Center (at the service of Agrifirm Feed and Agrifirm Co-products)

Biodiversity: improve soil phosphate efficiency Biodiversity: improve soil nitrogen efficiency

Agrifirm Plant

Biodiversity: reduce the use of crop protection products

Agrifirm Business Excellence

Carbon footprint: reduce the emission of greenhouse gases Carbon footprint: improve feed conversion Carbon footprint: reduce energy consumption Profit

Reduce the cost of Agrifirm/member operations Promote internal collaboration Promote collaboration within the chain 0

20

40

60

80

100

% of projects

Animal, plant and soil health Performing optimally using the right feed

Agrifirm has the right feed for each type of livestock. The development of feed concepts is ideally suited to innovation and consequently to

sustainability. This is one of our most important activities. The challenge is to keep animals as healthy as possible and to enable them to perform optimally.

An example is the 100-day approach for dairy cattle. This approach ensures that cows get through the dry period in optimal condition, do not have any calving problems, smoothly start up and quickly are in calf again. The

approach consists of an optimal ration during the dry period, combined

with proper care and accommodation during calving and special feeds for the start-up period.

Aside from feed concepts, Agrifirm also offers various advisory modules that

The development of feed concepts is ideally suited to innovation and consequently to sustainability.

enable farmers to optimise feeding themselves. For example, for pig farmers we have introduced the â&#x20AC;&#x2DC;Voerwinstâ&#x20AC;&#x2122; (Feed profit) computational module.

The farmer, together with a specialist, enters the data about his farming

operation. On the basis of different variables, the program subsequently

calculates the feeding schedule that produces the best results. Dairy farmers can make use of the MelkNavigator (MilkNavigator) evaluation and advisory tool. The livestock farmer in advance determines what he/she wants to

achieve, for example, more milk or increased number of grams of milk fat or protein. The program then precisely calculates which nutrients the farmerâ&#x20AC;&#x2122;s

cows require in larger doses in order to achieve the desired result. The farmer adjusts the feed accordingly.

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Agrifirm

Reducing nitrogen and phosphates in manure

2011

37,863 kg reduction

2011

308,876 kg reduction

2010

247,680 kg reduction

2009

145,528 kg reduction Biodiversity: a healthy and fertile soil

Agrifirm Plant is working on no less than 22 projects designed to reduce the use of chemical crop protection products; for example by applying

2008

30,788 kg reduction

precision agriculture. This has a positive impact on a number of aspects,

Reducing the amount of nitrogen and

financial returns. Agrifirm Plant is working on introducing and optimally using

important theme for livestock farmers

such as the quality of surface waters and soil life, as well as on the grower’s new fertilisers with the same objective.

Aside from this, Agrifirm Plant is one of the supporting partners in the

Stichting Veldleeuwerik (Skylark) foundation, a foundation for sustainable

agricultural production. In this foundation, arable farmers collaborate with

the business community on achieving sustainable production. Maintaining groundwater quality and soil fertility are key aspects in this regard.

Participants develop a sustainability and cultivation plan that establishes a

well-coordinated sequence of crops and soil improvement measures. On the basis of this project Agrifirm Plant, together with Heineken Nederland and

Holland Malt, wants to further develop the cultivation of sustainable brewing barley in the Netherlands over the next three years.

Groenvoerdrogerij Oldambt B.V. is a member of the Stichting Grauwe

Kiekendief (Montagu’s Harrier) foundation. The fields with alfalfa constitute excellent breeding grounds for this bird of prey, which is very rare in the

Netherlands. The company provides its utmost cooperation in preserving the nests with breeding pairs.

In order to reduce the use of fertilisers Agrifirm intermediates in the provision of liquid and stackable fertiliser. In 2011 Agrifirm traded 387,574 tonnes of

liquid and 27,448 tonnes of stackable fertiliser. In addition, we supplied 150,336 tonnes of compost produced from organic waste fractions, for instance.

phosphates released via manure is an in the Netherlands. Agrifirm is

developing feed concepts that enable animals to utilise more nitrogen and phosphate so that less is released in

manure: Air Line and P feeds for pigs

and nP feeds for cattle. The contribution of these feed concepts to reducing the total phosphate surplus is calculated each year. The cattle sector’s

contribution was calculated for the first time this year. These contributions are increasing due to continuous product

improvement and rising sales figures.

Based on European standards, the

livestock farming sector has agreed to

reduce emissions in the Netherlands by a total of 10 million kilograms via the

pig feed track and 10 million kilograms via the cattle feed track. In October Feed NL, in collaboration with the

Dutch Federation of Agriculture and

Horticulture (LTO) and Nevedi, signed

the ‘Reduction in Phosphate Production via Livestock Feeds Agreement’.

AgriFirm

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Contributing to a sustainable consumer supply The impact of food production on our planet and

the well-being of animals and people is increasingly

receiving attention. The demand for healthy consumer products produced in sustainable ways is increasing.

We consider it important that our customers can provide the consumer with a wide range and responsible choice of products. This is why Agrifirm has a broad product

range and why we are actively collaborating with chain partners on the development and implementation of new concepts.

Contributing to a sustainable consumer supply

CO2 emissions in the entire chain The independent firm, Blonk Milieu Advies, each year calculates the CO2

emissions throughout the entire chain for Agrifirm: from cultivation and the production of raw materials for animal feeds through to the farm.

The figures show where improvements can be made. This year for the first time we determined the carbon footprint of our feed operations in the

This year for the first time we determined the carbon footprint of our feed operations in the Netherlands. Agrifirm Plant also worked on developing a system designed to measure the footprint.

Netherlands. Agrifirm Plant, together with a group of farmers and Dacom, an agricultural IT specialist, also worked on developing a system designed to measure the footprint.

The increase in the footprint of pigs fed with dry feed in 2011 is largely due

to the increase in the import of cereals from South America. The transport

distances are greater and the yield per hectare is lower. While liquid feeds are showing a decline, it is still minor. This is because, in addition to liquid feed, pigs are fed additional feed that has a relatively high footprint.

The footprint of organic milk and eggs is virtually the same as that of the

non-organic varieties. The difference in the footprint between organic and traditional pig meat is primarily determined by the production system.

Dore van Hintum (l), Jumbo employee, at the table with Maurice van den Boom (r), Agricultural Cultivation Specialist at Agrifirm Plant, at the Jumbo supermarket in Veghel.

The cultivation of raw materials for organic livestock farming produces

fewer greenhouse emissions due to the fact that no chemical synthetic

crop protection products and fertilisers are used. This benefits the footprint.

The fact that emissions for organic pig meat are higher is due to the use

of extensive and animal friendly livestock production methods resulting in lower yields and lower feed conversion.

The carbon footprint of milk, meat and eggs The graphs below illustrate the CO2-eq number of kilograms of emissions released during

Carbon footprint of food in 2010 and 2011

Carbon footprint of organic and traditional (non-organic) food in 2011

5

5

4

4

CO2 -eq / kg product

CO2 -eq / kg product

the production of a kilogram of milk, meat or eggs produced using Agrifirm Feedâ&#x20AC;&#x2122;s feeds.

3 2 1 0

Milk

Pig meat Dry

2011

2010 Total without LULUC

Pig meat Wet

Broilers

Eggs

3 2 1 0

Traditional

Organic

Milk

Transport

Traditional

Organic

Pig meat

Livestock farming

Traditional

Organic

Eggs

Compound feed Roughage

A wide and responsible choice

Organic feeds and cereals

The sale of our organic products continues to grow. In 2011 we sold 32,000 tonnes of organic feeds, compared to 30,000 tonnes in 2010 and 20,000

“By 2020, supermarkets in the Netherlands will only have sustainable meat on their shelves. This way they create market security that offers cattle farmers the opportunity of transforming their operations into ‘conscientiously intensive’ operations.”

tonnes in 2008. In addition, Agrifirm Plant plays a key role in the Dutch

market for organic cereals. Approximately 75% of the organically cultivated

baking wheat, oats, barley, rye and spelt is traded via our grain pool. Normally we collect 12,000 tonnes in this pool every year, however, we are expecting smaller volumes this year due to poor harvesting conditions. The cereals are used to make a variety of products, such as organic bread.

Van Doorn Commission

‘By 2020, supermarkets in the Netherlands will only have sustainable meat on their shelves. This way they create market security that offers cattle farmers the opportunity of transforming their operations into ‘conscientiously

intensive’ operations.’ That was the conclusion of the Van Doorn Commission, which was appointed by the Province of Brabant in 2010 with the objective of issuing recommendations concerning the future of livestock farming.

In September 2011, the findings of the Commission resulted in the ‘Den Bosch Pact’: an acceleration agenda that specifically identifies how the sector should develop itself along sustainable lines over the coming years.

22

Agrifirm

Beer from sustainable brewing barley

Agrifirm Plant, together with companies and farmers is working on sustainable

agricultural practices within the Stichting Veldleeuwerik foundation. One specific initiative initiated by a group of participating companies is the

â&#x20AC;&#x2DC;Sustainable Cultivation of Brewing Barleyâ&#x20AC;&#x2122;

project. Agrifirm Plant, in partnership with Heineken Nederland and Holland Malt, wants to promote a sustainable barley malt beer chain by further developing the market for sustainable brewing barley over the next three years.

The initiative is designed to encourage Agrifirm was actively involved in the Van Doorn Commission and signed the Den Bosch Pact together with 28 parties from the retail, processing and livestock feed industries.

Safe and healthy food

It is evident that food must be safe. This is why Agrifirm, together with 86 animal feed companies in the Netherlands and Belgium, is involved in the TRUST FEED organisation. This organisation inspects suppliers and raw materials and looks after the centralised registration and exchange of

growers to develop a sustainability plan in accordance with the methodology

developed by the Stichting Veldleeuwerik foundation. The intent is to enable the sustainable chain to grow to 10,000

tonnes by 2014. To achieve this, the project partners want to introduce a premium incentive for participating brewing barley cultivators.

information. In the event of a crisis it is possible to trace back within a few

Brewing barley constitutes

production process and plant operations of all Agrifirmâ&#x20AC;&#x2122;s European production

for sustainable arable farmers in the

hours where potentially infected food was delivered. The entire livestock feed sites are certified in accordance with one or more internationally recognised food safety systems, such as GMP+, HACCP, ISO 9001, ISO 22000, QS and SKAL. The trade in organic manure is ISO 9001 certified.

To prevent antibiotic resistance, Agrifirm, in accordance with agreements within Nevedi, as of 1 August 2011 entirely stopped producing feeds that

contain antibiotics. Moreover, together with ZLTO, Topigs and VION, Agrifirm is training its specialists to discuss reductions in the use of antibiotics in the livestock farming industry.

an addition to the cereals segment

Netherlands. Cereals are an essential and indispensable element in the

cultivation plan of any sustainable

farmer. The development of sustainable cereal cultivation in the Netherlands is consequently of major importance, including to future arable farmers,

and supports food production over the long term.

AgriFirm

23

Our employees: the foundation for success Expert, motivated employees are indispensable to the success of the company.

This is why Agrifirm invests in its employees. We offer them suitable terms and conditions of employment, training and career advancement opportunities.

Almost seventy percent of the employees rate their satisfaction with Agrifirm as an employer at a score of between 7 and 10.

Many employees consider their own involvement in making improvements and realising organisational objectives positive.

Furthermore, we are devoting increased attention to performance

management; this now occupies a central position in our HR policy. And this is bearing fruit. For example, 65% of our managers was promoted from another position within the company.

Employee opinion survey

Agrifirm highly values the opinion of its employees. This is why we conducted an employee opinion survey, the Agrifirm Employee Opinion Survey (AEOS),

among all European subsidiaries in 2011. The survey identified how employees think about their working environment, working conditions and the

organisation. Participation was completely anonymous. In total, almost 2,000 employees expressed their opinions; a response rate of 65%. From now on, the survey will be conducted every two years.

The results provide insight into employee satisfaction, motivation,

commitment and loyalty. There also were specific questions about themes such as an employeeâ&#x20AC;&#x2122;s own position, manager, working environment and safety, personal development and communication.

24

Agrifirm

Employee training budget Average amount spent on training per employee by company in 2011.

Company

Amount

Agrifirm Group

938

Agrifirm Feed

598

Nuscience Group

1060

Agrifirm Deutschland

28

Agrifirm Polska

449

Agrifirm Magyarország Zrt

140

Agrifirm Co-products

475

Agrifirm Belgium

524

Agrifirm Plant

418

Abemec Group

1048

Oldambt B.V.

Almost seventy percent of employees rate their satisfaction with Agrifirm as an employer at a score of between 7 and 10. Many employees consider

82

Exlan Consultants

604

CCL Nutricontrol

489

Agrifirm Winkel B.V.

260

Agrifirm Total

546

their own involvement in making improvements and realising organisational objectives positive.

There are key areas for attention in the field of communications, managers and personal development; factors that are often closely interrelated.

Agrifirm companies are developing improvement plans on the basis of the

Performance management

AEOS results. This makes it clear to all employees that their opinion matters.

In 2011, effort was expended on

Young Employees learn from Porsche

Management within all companies

The ‘Young Employees Agrifirm’ consists of higher educated employees up to the age of 35 who regularly meet to take courses and expand their network.

In 2011 they organised two conferences, including a three-day visit to Leipzig.

These initiatives were carried out in the context of the ‘Business Excellence’ theme: a quality program for the entire business operation. Part of the

conference was a visit to the Porsche factory. The German car manufacturer operates on the basis of ‘Lean Management’ principles; a management philosophy that aims to avoid waste.

implementing Performance

that are part of the Agrifirm Group.

This involves the structured conduct of planning, performance and

career meetings. This year, 64% of all employees participated in one or more of these meetings. This

percentage will sharply increase over the coming years.

AgriFirm

25

Accidents and absence due to illness Any accident is one too many.

Unfortunately, 37 incidents involving bodily injury took place in 2011. This still keeps

New job classification system

industries. Next year we are aiming to

policy. One of the priorities in 2011 consequently was to create clarity

Agrifirm within the normal guidelines for improve incident registration and taking

preventive measures designed to keep the number of incidents as low as possible.

The Agrifirm Employee Opinion Survey (AEOS) also indicated that this area needs to be given more attention.

Agrifirm’s absence due to illness is 4.1% and is just below the national average of 4.2% (source: Statistics Netherlands (CBS)).

Average absence due to illness

%

Agrifirm Group

1.0

Agrifirm Feed

5.5

Feed Transport

5.3

Nuscience Group

4.3

Agrifirm Deutschland

4.4

Agrifirm Polska

3.2

Agrifirm Magyarország Zrt

3.3

Agrifirm Co-products

3.2

Agrifirm Belgium

0.7

Agrifirm Plant

3.0

Abemec Group

2.9

Oldambt B.V.

4.6

Exlan Consultants

3.2

CCL Nutricontrol

5.0

Agrifirm Winkel B.V.

3.9

Agrifirm Total

4.1

•A ccident frequency: 8 incidents per 1,000,000 working hours.

•A verage duration of absence due to accidents: 29 working days.

• Rate of absence due to accidents: 0.7%

26

AgriFirm

During the 2010 merger, each of the two companies had its own personnel concerning the staffing and classification of positions. Under the name

‘Scales’, the HR departments and managers therefore developed a new job

classification system for all positions that fall outside the CLA. This provides clarity concerning job requirements, remuneration and opportunities for promotion.

The new job classification system also makes it easier to recruit new

personnel. In addition, it will make it easier for people to transfer among Agrifirm companies. Finally, the new system makes the classification and remuneration of jobs easier to compare with other companies.

Codes and regulations

Agrifirm voluntarily abides by the Netherlands Corporate Governance Code.

This code is mandatory for companies listed on the stock exchange and

contains principles and provisions that regulate the relationship between the

Executive Board, the Supervisory Board, shareholders and the Annual General Meeting of Shareholders.

In the case of Agrifirm the code has been adapted so as to provide a proper

fit with Agrifirm’s cooperative character. Furthermore, the company has a Fair Business Practices code of conduct. This is a guideline designed to promote conscious and ethical actions under all circumstances. For example in

situations involving a conflict of interest or competitive methods. Employees

who report abuse are protected by the Whistle-blower Scheme. One report of

discrimination was received under this scheme in 2011. This report was settled with the parties involved.

The rights of our employees in the Netherlands and Belgium, i.e. 85% of the total personnel complement, are documented in the form of a CLA. Due to

reorganisations related to the merger, Agrifirm also developed a social plan that contains the regulations and provisions that apply in the event of a collective dismissal.

Corporate social responsibility

At the initiative of the employees themselves, Agrifirm regularly contributes to local or national charitable causes. For example, the Nuscience Group last

year supported a number of organisations, including Cliniclowns, the Stichting KiKa foundation and the Fonds Emilie Leus fund (for the prevention of traffic accidents). Agrifirm Hungary donated moneys to various local projects.

Agrifirm encourages these initiatives. This is another way in which we,

together with our employees, make a contribution to the environment in which we operate.

2011 Stakeholder consultations Theme

Stakeholders

Use of antibiotics in animal feed

• Pig farming chain partners • Pig and broiler farmers

Phosphate reduction

• Nevedi • Pig and cattle farmers • ZLTO • Participation in Low Phosphorus Covenant • Befema

Reducing the carbon footprint

• Nevedi • Product Board Animal Feed (PDV) • FAO/FEFAC

Reducing energy consumption

• Long-term Nevedi agreements

Creating sustainable supermarket products

• Active participation in the Stichting Veldleeuwerik foundation • Flanders Food • KU Leuven (Louvain University)

Sustainable protein-rich raw materials

• Netherlands Meat Association (COV) • Friesland Campina • Sustainable Trade initiative • LTO Nederland • Stichting Natuur en Milieu foundation • Nevedi • Product Board for Margarine, Fats and Oils • Product Board for Poultry and Eggs • Solidaridad • Superunie purchasing organisation • World Wide Fund for Nature (WWF) • RTRS • Dutch growers

Biodiversity

• (Local) governments and provinces • District water boards • ZLTO • LTO North • WUR (Wageningen University & Research centre) • Growers and several suppliers

Management statement Agrifirm in this Corporate Sustainability Report reports on its sustainability policy and the accomplishments realised in this domain in 2011. The report is published yearly and concerns all companies within the Agrifirm Group, unless indicated otherwise for specific components. The previous report was published in April 2010. The guideline used in preparing the report is the Global Reporting Initiative (GRI), the international guideline for sustainability reporting. This report was prepared at the GRI B Level. The GRI Table with references to all reported information is available on our website www.agrifirm.com under the header ‘Corporate Social Responsibility’.

Ernst & Young has conducted an audit of the reliability of the information and the information systems used. We will use the findings of this audit to make further improvements in the quality of the data.

For additional information about Agrifirm’s sustainability policy, please contact Ruud Tijssens, Corporate Affairs Director, r.tijssens@agrifirm.com, tel.: +31 (0)88 488 29 00.

Colophon Editors: Corporate Affairs Department of the Agrifirm Group, Communications Department of the Agrifirm Group. Concept and realisation: Schuttelaar & Partners. Photography: Marcel Bekken With special thanks to Mr A. Albers and Jumbo Supermarket, Veghel, for extending their cooperation to the photography used in this report.

Agrifirm Group, Boogschutterstraat 1a 7324 AE Apeldoorn, The Netherlands T +31 (0)88 488 10 00 info@agrifirm.com www.agrifirm.com