Avril is planning to expand sunflower seed crush capacity in France
Posting group EBITDA of €356m (US$385m), a jump of +46% on the prior year, along with a revenue hike of 19%, at €6.9b, the company announced plans yesterday [April 14] to expand its sunflower oil and meal output. It wants to reduce reliance on Black Sea imports and will look to increase its sunflower seed crushing capacity in France.
"In the processing of more than one million tons of sunflower seeds, over 50% of the French agricultural production of sunflower would be valorized by the group."
Avril, which is France’s largest animal feed and biodiesel producer, also reaffirmed its long-term growth strategy despite the ongoing market volatility and the Black Sea conflict. “The crisis in Ukraine heightened the already high tensions on world markets. From energy to agricultural raw materials, the war is driving up costs.”
And, against such a background, the group additionally revealed that it is set to provide a once-off aid package of €6m for French livestock farmers. The funds, which will be available from July, will be directed towards newly established livestock farmers, also enabling the transfer of farms, along with modernization and sustainability of farming operations.
Gains for oilseed processing business, feed losses
The French group noted an “exceptional performance” in 2021 for its oilseed processing and renewable energies division, which includes seed crushing operations as well as the production of oilseed meal, refined oils, and biofuels. EBITDA for those operations reached €171m.
However, an EBITDA of €13m (-57%) reflected a poor performance for its agricultural division, said Avril. The division comprises its animal feed business unit, Sanders, feed additives unit, MiXscience, fertilizer specialist, Terrial, and raw material purchasing unit, Feed Alliance.
Sanders, it confirmed, was hit by the surge in raw material prices and by its inability to pass on all of the increases to farmers.
MiXscience, a producer of animal specialties for livestock feed, managed to limit losses as a result of a market push in Africa, and a solid sales performance. However, restrictions on raw material supplies, trade constraints linked to COVID-19, and unfavorable weather conditions penalized the business, in particular, its Brazilian unit, Salus.
Pork, egg operations
Terrial, though, was able to successfully adapt its commercial strategy to preserve its margins in the face of the pressure on raw materials, said Avril.
The company’s egg business, which involves the packaging and manufacture of egg products, and which is still in the process of being sold, once again sharply widened its losses. However, it said its pork business, Abera and Porcgros, which it divested in January 2022, performed well in 2021.
In January 2022, the group announced the acquisition of Solteam, one of France's leading importers of traced and guaranteed ‘deforestation-free’ non-GMO soy. “Once confirmed by the French Competition Authority, this investment will be instrumental in achieving our goal of obtaining 100% of our soy and palm oil supplies from sustainable sources by 2030.”