Working together on sustainability2011 Corporate Sustainability Report

link to success

Facts and figures

Composition of personnel complement

• 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

Distribution of total number of employees

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

Gender

26% Female74% Male

Employment contract

15% Definite85% Indefinite

Age

23% <29 years53% 30-50 years24% 50< years

Job families

4% Management41% Commercial13% Staff, Support and Services2% Research and Innovation38% Operations2% Others

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.

2% Agrifirm Group23% Agrifirm Feed18% Nuscience Group5% Agrifirm Deutschland4% Agrifirm Polska5% Agrifirm Magyarország Zrt4% Agrifirm Co-products1% Agrifirm Belgium9% Agrifirm Plant6% Abemec Group1% Oldambt B.V.1% Exlan Consultants3% CCL Nutricontrol18% Agrifirm Winkel B.V.

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 LomanCEO, Agrifirm

Preface

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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 a recognisable profile on the market. We function as a ‘link to success’ 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.

MissionThe 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 Agrifirm’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:

Our mission: to create sustainable

value for members.

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1. One FirmA 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. PartnershipsThe 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. InnovationInnovation is an important condition for making progress. Innovation forms the basis on which agricultural entrepreneurs justify their existence. Agrifirm can and wants to play a key role in this respect. Research & Development consequently occupies a central position within our organisation so that it can produce results-oriented innovations, now and in the future.

4. Growth in revenues and resultsWe 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.

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 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.

A cooperative with six divisions

Awards for AgrifirmAbemec Veghel was presented with the Agrartechnik Service Award this year. This 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.

Opting for sustainability

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Sustainable solutions must be financially

profitable as well. This sharpens our focus.

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.

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 chainCharacteristic of Agrifirm’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.

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

Anchoring policyOur 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.

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

Agrifirm’s sustainability policy comprises four themes.

Our employees: the foundation for success

Working on sustainable raw materials

Contributing to a sustainable consumer supply

Enabling plant and animal performance

Efficient production and logistics

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

Working on sustainable raw materials

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.

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.

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 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 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.

Sustainable soy throughout the entire chain

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

Local soy cultivation trials

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Co-products as raw materials for animal feeds

Kernvoerconcept (poultry concentrated feed concept): use locally cultivated wheatIn 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.

‘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.

In developing new feed concepts, Agrifirm

devotes attention to the smart use of

raw materials.

AgriFirm 11

Healthy chickens thanks to new raw materials packageAgrifirm 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.

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 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.

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.

46.3%

Percentage co-product per animal type

66.0% Dairy cattle

35.9% Pigs

32.7% Laying hens

42.3% Broilers

Reuse of co-products from the food industry

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

Efficient production and logistics

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 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 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.

Overview of energy consumption

The use of the Energy Efficiency Index provides a good picture of the results

produced by efficiency measures.

Energy Efficiency Index

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.

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118 124

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

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.

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Agrifirm 2011 energy consumptionThe 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.

Renewable energyThe 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.

We promote the use of renewable energy, however,

we do not invest in power generation plants ourselves.

Smart energy savings

15

TransportTransport and logistics are responsible for a significant portion of the total energy consumption and CO2 emissions. It is therefore important to organise transport efficiently, including energy efficiently. The Business Excellence programme was introduced throughout Agrifirm to improve the quality of management operations. We monitor logistics processes and make improvements where possible.

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.

At Agrifirm’s head office in Apeldoorn, 34 colleagues have signed an energy efficient car lease. Due to the merger and the head office’s new location they will have to drive greater distances. From now on they will do so in cars that have an Energy Label A.

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.

Feed miles and land use

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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 production’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

Enabling plants and animals to perform

The total overview of the scores identifies the

sustainability issues to which Agrifirm’s innovations make

a contribution.

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 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.

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.

Sustainability scan: people, planet, profit

Contribution of innovation projects to sustainability

Avoiding antibiotic resistance in humans

0 20 40 60 80 100

Agrifirm Innovation Center

Agrifirm PlantAgrifirm Business Excellence

% of projects

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

Improve animal/farm phosphate efficiency

Biodiversity: improve soil phosphate efficiency

Biodiversity: improve soil nitrogen efficiency

Biodiversity: reduce the use of crop protection products

Carbon footprint: reduce the emission of greenhouse gases

Carbon footprint: improve feed conversion

Carbon footprint: reduce energy consumption

Reduce the cost of Agrifirm/member operations

Promote internal collaboration

Promote collaboration within the chain

People

Planet

Profit

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

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.

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Performing optimally using the right feedAgrifirm 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 enable farmers to optimise feeding themselves. For example, for pig farmers we have introduced the ‘Voerwinst’ (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 farmer’s cows require in larger doses in order to achieve the desired result. The farmer adjusts the feed accordingly.

The development of feed concepts is ideally

suited to innovation and consequently to sustainability.

Animal, plant and soil health

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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 precision agriculture. This has a positive impact on a number of aspects, such as the quality of surface waters and soil life, as well as on the grower’s financial returns. Agrifirm Plant is working on introducing and optimally using 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.

Reducing the amount of nitrogen and phosphates released via manure is an important theme for livestock farmers 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’.

Reducing nitrogen and phosphates in manure

201137,863 kg reduction

2011308,876 kg reduction

2010247,680 kg reduction

2009145,528 kg reduction

200830,788 kg reduction

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

Contributing to a sustainable consumer supply

The graphs below illustrate the CO2-eq number of kilograms of emissions released during the production of a kilogram of milk, meat or eggs produced using Agrifirm Feed’s feeds.

The carbon footprint of milk, meat and eggs

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.

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 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. The cultivation of raw materials for organic livestock farming producesfewer 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.

CO2 emissions in the entire chain

Total without LULUC

20112010

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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.

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Organic feeds and cerealsThe 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 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.

“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.”

A wide and responsible choice

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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 foodIt 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 information. In the event of a crisis it is possible to trace back within a few hours where potentially infected food was delivered. The entire livestock feed production process and plant operations of all Agrifirm’s European production 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.

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 ‘Sustainable Cultivation of Brewing Barley’ 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 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.

Brewing barley constitutes an addition to the cereals segment for sustainable arable farmers in the 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.

Beer from sustainable brewing barley

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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. 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 surveyAgrifirm 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 employee’s own position, manager, working environment and safety, personal development and communication.

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.

Our employees: the foundation for success

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Almost seventy percent of 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.

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

Young Employees learn from PorscheThe ‘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.

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. 82

Exlan Consultants 604

CCL Nutricontrol 489

Agrifirm Winkel B.V. 260

Agrifirm Total 546

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

In 2011, effort was expended on implementing Performance Management within all companies 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.

Performance management

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Any accident is one too many. Unfortunately, 37 incidents involving bodily injury took place in 2011. This still keeps Agrifirm within the normal guidelines for industries. Next year we are aiming to 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)).

Accidents and absence due to illness

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

New job classification systemDuring the 2010 merger, each of the two companies had its own personnel policy. One of the priorities in 2011 consequently was to create clarity 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 regulationsAgrifirm 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 properfit 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 planthat contains the regulations and provisions that apply in the event of a collective dismissal.

Corporate social responsibilityAt the initiative of the employees themselves, Agrifirm regularly contributesto 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.

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

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

• Rate of absence due to accidents: 0.7%

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

2011 Stakeholder consultations

Management statementAgrifirm 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.

ColophonEditors: 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 1a7324 AE Apeldoorn, The NetherlandsT +31 (0)88 488 10 00 info@agrifirm.comwww.agrifirm.com