VION Food Group Nuffield CSC VION Food Group, profile - PowerPoint PPT Presentation

VION Food Group Nuffield CSC

VION Food Group, profile International food company Turnover € 8,9 billion 27,000 employees Head Office Eindhoven, the Netherlands Mission VION wants to be the reliable partner in the food chain, offering our customers and consumers high- quality food and ingredients of agricultural origin. Objective VION wants to become a leader in (selected) food, ingredients and service market segments Motto Passion for Better Food Page 2

VION, one shareholder, farmer listed ZLTO/NCB Ontwikkeling Supervisory board Executive board FOOD INGREDIENTS Core activities Pork, beef, poultry, lamb Ingredients (i.e. Fat, Proteine, Gelatine) Convenience products NL DE UK Int. Int.

VION Locations VION Food Netherlands VION Food Germany VION Food UK VION Food International VION Ingredients

VION products Fresh Meat Convenience Ingredients

VION tools to interact with (primary) sourcing VION Food VION Ingredients MIXING SYSTEM FOR RAW MATERIALS VION has developed a mixing system named BASICS which is suitable in all product areas: various sausages and cold meats. The benefits: .. Standardization of raw materials .. Exact amounts and fat levels. FARMINGNET IS AN AUTOMATED .. Optimum freshness. SYSTEM It provides pig breeders with a speedy and .. Time savings through process clearly structured supply of abattoir data via optimization. the internet. .. Savings in de-boning and With Farmingnet, the farmers obtain – processing. among other things – valuable feedback, including slaughter and slaughter results data and the option of a free benchmark with other pig breeders, i.e. management data which will be of considerable financial benefit for them and help increase the business success of their pig-breeding operations.

VION’s position in the Pork Chain ‘Creating value on raw materials’ 40% 40% 40% Marketing Retail Farmers Sourcing Processing & Foodservice Sales Food Industry 60% Increasing energy efficiency Reduction of Reduction of failure costs failure costs

Farmer listed spearheads 1. Bottom line management: Improve bottom line result of farmers by use of FarmingNet and advise 2. Programme ‘Partnership in business’. Programme aimed at strengthening our relations with suppliers and other stakeholders. 3. Supply chain management: Improve supply chain efficiency 4. Conceptmanagement Convert societal demands regarding sustainability and animal welfare into attractive (triple P) market concepts. 5. Active Public Affairs / CSR policy Convert societal issues in effective supply chain policies

Assisting producers to become the best

Reduction in the failure costs Faster exchange of information = gain profit  VION in business together with farmers  Profit Meetings (2x year): practical, educational  Face to face management assistance  FarmingNet

Working with suppliers to ‘reduce failure cost’ VION ‘FarmingNet’ an IT system  providing rapid internet feedback to producers on the previous days kill. KPI’s on weight, grade and health plus  trend and benchmarking data are provided Figures are all related to price per kilo  aimed at driving improvements – a better pig to meet retail needs. And their impact on price Too fat Too light Too heavy

Development of Manure Processing Excess manure in the Netherlands   High costs  Future limit for pig production Feasibility study for a Manure processing  60.000 manure 125,000 ton/year 50.000 processing plant, including 40.000 digestion 30.000 20.000 10.000 Ecoson decreases costs  - for farmers for manure 2007 2008 2009 2010 2011 2012 disposal

Unique concept Biodiesel Refinery Glycerin Manure Digester Electricity Electricity Effluent Waste water C1 processing plant treatment plant Solids

Business models in pork supply chain From farmer listed to listed Valorisation ‘Byproducts’ 40% 40% 40% Pig farmer (NL/DE/UK) Marketing Retail (Europe) Cattle farmer (NL/DE/UK) Sourcing Foodservice (Europe) Processing & Poultry farmer (UK) Sales Food Industry (World) Sheep farmer (AS/UK) 60% Vegetable / Potato grower (NL/PL) Integrated supply chain Processing, Marketing & Sales Coöps Listed: - Danish Crown (Coöperative) - Unilever Listed: - Nestlé - Smithfield (Vertical integration) Farmer listed: - VION (Strategic shareholder)

Competitor benchmark global top 3 pork players 9,6 Danish Crown Smithfield 7,8 VION 7,5 7,4 7,1 7,1 6,7 6,5 6,5 6,3 6,3 6,0 5,9 5,9 5,4 5,4 4,0 2,9 2003 2004 2005 2006 2007 2008 249 251 234 233 223 Smithfield 208 205 Danish Crown 174 VION 161 153 118 114 97 85 -26 2003 2004 2005 2006 2007 Source: 2007 Annual report, SEC 2007

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