Analysis Insights
New CEO Agrifirm faces radical choices
The impending departure of Dick Hordijk as CEO of Agrifirm comes as a surprise in some ways, but not in others. After leading one of the largest agricultural cooperatives in the Netherlands for eight years, the Supervisory Board deems it time for new leadership. He leaves his successor with some significant challenges that, according to the outgoing CEO, sometimes require radical choices.
In theory, a third four-year term for Hordijk as CEO of Agrifirm would have been possible, but it will not come to that. After two terms, it was mutually agreed between Hordijk and the cooperative's supervisors that it is better to part ways, as stated in the announcement released on Monday afternoon. The announcement of his departure at the end of this year was made public before a successor is known. This has provided clarity that a change in leadership is imminent.
Generalist
From a distance, Hordijk was an enthusiastic connector who led Agrifirm as a generalist. Not so much an expert who knew the ins and outs of feed, fertilizers, or crop protection products that Agrifirm delivers to farmers. He experienced both good and challenging years. Particularly in 2023, it was tough when Agrifirm had to deliver negative figures for the first time since the 2010 merger. However, he did not shy away from interviews, nor was he hesitant to share his views in national media during the farmers' protests. He also advocated for farmers' business models by investing in projects like ValleiVarken.
Reorganization Initiated
Earlier this year, Hordijk initiated a reorganization to align costs with revenues. However, he will not have the opportunity to implement the new strategy - scheduled to start in 2025. The exact form of the new strategy is not yet known to the public. This is logical as the successor to Hordijk will also have a say in this matter.
Agrifirm faces some tough strategic challenges. The use of fertilizers and crop protection products is a subject of considerable societal debate. But perhaps the biggest challenge is how they plan to cope with the shrinking livestock population. In recent years, Agrifirm's feed sales often declined faster than the market, which is expected to further decrease in size in the coming years. In 2023, Agrifirm sold over 30% less feed (including by-products) than in 2016 when Hordijk took office. This is quite significant, although according to him, there is no understaffing in the factories.
The feed activities in the also shrinking Belgian market require attention. Half a year ago, Hordijk mentioned that he does not rule out an exit from Belgium, similar to what ForFarmers did last year. "We should not be afraid to make radical choices in advance," as he stated. Agrifirm's performance in China is also below par, although they intend to remain active in that market. The cooperative's foreign activities are sometimes a topic of discussion among the Dutch members.
Successor Already Identified
The announcement of who will succeed Hordijk is likely to come soon, as Agrifirm hopes to communicate this within a few weeks. The contract has not been finalized yet, but this expectation suggests that the new CEO is already identified. It will be their task, alongside the relatively new CFO Stefan Bulthuis, to lead the green-yellow feed cooperative through challenging times in the coming years.
