French vegetable oil and biodiesel group Avril has announced it is planning to expand its sunflowerseed crushing capacity to reduce its reliance on imports, with the conflict in Ukraine impacting sunflower oil and meal shipments from the European Union’s main suppliers.
Taken together, Russia and Ukraine account for about 80% of global exports of sunflower oil.
“The aim is to become more independent in terms of sunflower oil and oilseed meal... In the processing of more than 1M tonnes of sunflowerseeds, over 50% of the French agricultural production of sunflower would be valorised by the group,” the company said in the 13 April statement announcing its 2021 results.
“This project would also contribute to the expansion of this crop, which is expected to increase in surface area by 900,000 ha or 30% compared to 2021.”
The decision to boost production had been taken before tensions in the Black Sea region mounted but plans were accelerated recently, Avril chief executive Jean-Philippe Puig was quoted as saying in a Reuters report on 14 April.
Avril reported a 155% rise in net profit in 2021 to US$163.3M (€150M), helped by capital gains, and a 46% rise in full-year earnings before interest, tax, depreciation and amortisation (EBITDA) to US$387M (€356M).
The group’s sales grew 19% to US$7.5bn (€6.9bn) last year, mainly due to an increase in commodities prices.
Avril’s Oilseed Processing & Renewable Energies sector recorded earnings before interest, tax, depreciation and amortisation (EBITDA) of US$186M (€171M).
Its Saipol division recorded high sales prices for its oils, oilseed meals, and biofuels, the company said.
Within the Specialties area, which produced speciality ingredients for European and global industry including Oleon, Kerfoot, Novastell and Lecico, 2021 saw improved growth, with earnings before interest, tax, depreciation and amortisation (EBITDA) of US$104M (€95.7M), after a slowdown the previous year due to the economic slump caused by the COVID-19 pandemic.
In January, the group confirmed the acquisition, through its Feed Alliance business unit, of Solteam, one of France's leading importers of non-genetically-modified (non-GM) soya.
Looking ahead, Avril anticipated the growth dynamic to continue this year and beyond, despite the difficult global economic and geopolitical context.
“Indeed, the crisis in Ukraine heightened the already high tensions on world markets, from energy to agricultural raw materials. The war is driving up costs for all economic players and requiring manufacturers to transfer these increases on to their end clients,” the company said.