Groupe Euralis

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Groupe Euralis

Avenue Gaston Phoebus
Lescar, 64231
France
Telephone: (33 05) 59 92 38 38
Fax: (33 05) 59 92 39 89
Web site: http://www.euralis.fr

Cooperative
Incorporated: 1936
Employees: 3,100
Sales: EUR 829 million ($995 million) (2006)
NAIC: 424510 Grain and Field Bean Merchant Wholesalers; 424520 Livestock Merchant Wholesalers; 424590 Other Farm Product Raw Material Merchant Wholesalers; 424910 Farm Supplies Merchant Wholesalers

Groupe Euralis is one of the top 15 agricultural cooperatives in France and the top such cooperative in the French southwest. The result of the grouping of several cooperatives, Euralis has expanded from its original base as a corn producers’ cooperative to establish itself in three primary divisions: Gastronomy, Seeds, and Agricultural Products and Distribution. The group’s Gastronomy division includes its Euralis Gastronomie subsidiary, France’s leading producer of foie gras in the world. That division, which also includes sales of duck meat, markets its products under several brand names, including consumer brands Montfort and Bizac, and Rougie, targeting the industrial and export markets. The Gastronomy division is Euralis’s largest division.

The Agricultural Products and Distribution division is responsible for the group’s cereal sales, especially corn; vegetable production, including sweet corn, green beans, peas, and broccoli; chicken and poultry, marketed under the Sud-Ouest, Gers, Landes, and other labels; milk and dairy products; feed; as well as the group’s Point Vert retail and wholesale store chain. This division also distributes agricultural supplies, equipment, and products. The Seeds division focuses on the markets for corn, sunflower, and colza. Groupe Euralis, which posted revenues of EUR 829 million ($995 million) in 2006, employs some 3,100, and represents more than 15,000 farmer-members. The cooperative is led by president and chairman (and farmer) Christian Pees, as well as by director general Michael Depierre.

1936 ORIGINS

Euralis stemmed from a cooperative formed in 1936 by a group of farmers in the Bearn region, in the southwest of France. Hard hit by the economic difficulties of the time, the founding farmers decided to band together to achieve economies rather than abandon their farms. Called the Coopérative de Blé du Bassin de l’Adour, the co-op originally focused on a core of wheat production. By the 1950s, however, the farmers’ group had decided to diversify into other cereals, and especially into the production of corn, as the first hybrid corn varieties were just then arriving from the United States. In 1951, the co-op changed its name, to Coopérative de Céréales du Bassin de l’Adour.

The expansion into corn became a determining factor in the group’s growth over the next two decades. By the early 1970s, the cooperative had launched its own production of seeds in order to supply its own members’ needs, as well as for the general market. The cooperative also became among the first in Europe to establish a research and development wing in order to develop its own corn varieties. At the same time, the cooperative put into place a number of irrigation initiatives, in order to ensure a steady supply of water to the highly water-intensive crop. By the late 1960s, in support of its members’ steadily increasing corn production, the cooperative had begun adding a number of specialized corn silos to its holdings.

The mid-1970s marked a new period of expansion for the group, as it expanded its reach farther north along France’s southwest coast. By the end of that decade, the co-op had made a major acquisition of another group specializing in the collection of corn. That takeover raised Euralis to the rank of the top corn collector in the country.

The group’s steadily expanding corn operations also paved the way for its entrée into the foods sector. This effort was launched in 1975, when the cooperative reached an agreement to supply sweet corn for the Green Giant brand. The success of this operation soon encouraged the group to add other vegetable varieties, notably green beans, sweet peas, and broccoli. The co-op also developed its service component during this period. In 1977, the co-op launched its own farm supply network, opening the first of its Maison du Paysan retail outlets.

In recognition of its broader base of operations, the cooperative changed its name, to Coop de Pau, in 1985. Over the next decade, the group continued to seek new expansion opportunities. Acquisitions formed an important part of the co-op’s growth during this period. Among these was the takeover of one of the leading European corn processors, establishing the company as a top provider to the food processing industry. The co-op also developed a new area of operations, that of the production of seeds, through the purchases of Prograin Genetique and Rustica. The former was renamed Pau Semences, and, together with Rustica, established the co-op as among the top European seed groups. In conjunction with this effort, Coop de Pau established several subsidiaries providing research support, as well as sales support in Germany, the United States, and Argentina.

AGRO-INDUSTRIAL IN THE NINETIES

Coop de Pau also continued seeking out new partnerships during this time. A major boost came with the creation of a joint venture, Sud-Ouest Legumes, with Bonduelle, the leading supplier of canned and frozen vegetables in France. The joint venture then began supplying corn and green beans for Bonduelle’s production operations. Coop de Pau extended its operations into the wine sector in 1991 through its merger with a new cooperative partners, COOPASSO, a Bordeaux-based wine cooperative. Toward the middle of the 1990s, Coop de Pau boasted more than 1,300 employees and annual revenues of EUR 500 million ($450 million).

KEY DATES

1936:: A group of farmers in the Bearn region form a cooperative focused on wheat production.
1951:: The cooperative begins planting the first hybrid corn imported from the United States and changes name to Coopérative de Céréales du Bassin de l’Adour.
1975:: A joint venture with Green Giant is begun for vegetable production, including sweet corn, sweet peas, broccoli, and green beans.
1985:: The group is renamed Coop de Pau.
1995:: Concerns are expanded to include poultry, pork, and beef production.
2002:: Group acquires Rougié Bizac International, becoming the leading foie gras producer in France.
2005:: Rougié and Montfort are merged into Euralis Gastronomy, which becomes the co-op’s largest division.
2006:: The co-op expands into prepared foods, purchasing stakes in Papillote and Stalaven; a partnership with Abengoa to produce ethanol is formed.

Through the 1990s, Coop de Pau continued to grow, and along the way established several new partnerships with other cooperatives in southwestern France. These partnerships in turn paved the way for the cooperative to add a new range of markets to its operations. In the mid-1990s, the cooperative targeted an entry into the meat and meat products sectors. As part of that effort, Coop de Pau entered the poultry market in 1994, forming a partnership with Codigers, a cooperative of 140 farmers based in Samatan. Codigers specialized in the production of farm-raised poultry, including chicken, duck, and turkey, as well as rabbit, primarily for the labeled poultry market.

During the late 1990s, also, the cooperative added the production of beef, absorbing CELPA (Coopérative d’Eleveurs des Pyrenées-Atlantiques), a Bearn-based cooperative specializing in the production of organic Blonde d’Aquitaine beef. Coop de Pau then completed its meats offering through the addition of FIPSO, a cooperative grouping several pork farmers in the Aquitaine and Midi-Pyrenées regions. In addition to pork meat, FIPSO also developed processed pork products, including Bayonne hams.

FOIE GRAS LEADER IN THE NEW CENTURY

The addition of these cooperatives led to the adoption of a new name for the entire group, which became known as Pau-Euralis, and later, more simply as Euralis. As it moved toward the turn of the century, Euralis launched a EUR 15 million investment program with the goal of increasing the share of meat products in its overall revenues from 25 percent at the end of the 1990s to at least 35 percent by the middle of the first decade of the 2000s. This investment program included the construction of a new hog slaughterhouse and pork processing facility in order to raise the company’s Bayonne ham production.

As it turned to the new century, however, Euralis had begun developing an important new sector of operations, that of the production of foie gras. The company’s entry into this sector dated from 1995, when Euralis acquired Grimaud Montfort (GMD) Distribution, then France’s number two producer of duck foie gras. GMD was especially well-known for its consumer brand, Montfort, and, as part of Euralis, it entered a new growth period, notably with launch of a EUR 8 million expansion program in the late 1990s designed to boost its production.

Despite these diversification efforts, Euralis’s primary source of revenues remained its production and distribution of cereals and agricultural supplies. These continued to account for 36 percent of the group’s sales into the beginning of the new century. By then, the company had entered the growing market for organic grains, pulses, and seed oil crops. Among the group’s investments was the creation of Agri-bio Union, a joint venture set up in partnership with the organic cooperative Coop Agri-Bio, and another cooperative, Occitan, in 1999. Along with its investment in the organic market, however, Euralis had also been investing in the highly controversial GMO (genetically modified organism) crop market.

Amid a series of crises affecting the group’s meat operations in the early 2000s, Euralis restructured its operations in order to reinforce its other activities. In 2002, the company regrouped its Rustica and Pau Semences seeds businesses into a single operation, Euralis Semences. The company also reached a cooperation agreement with Lot-et-Garonne-based cooperative Terres du Sud to combine their grain sales and farm supplies operations.

By then, Euralis had completed another major acquisition, of Rougié Bizac International, another leading producer of foie gras focused especially on the institutional market. The purchase of Rougié gave Euralis the firm lead in the French foie gras market (France itself being the world’s largest market), doubling its size compared to its closest competitor.

The purchase of Rougié enabled the company to reorient itself as it neared the middle of the first decade of the 2000s. In 2003, the company launched a new strategy based on three primary divisions: Gastronomy, Seeds, and Agricultural Products and Distribution. The restructuring led to the creation of a single umbrella subsidiary for the group’s foie gras and related poultry products, called Euralis Gastronomie, in 2005. That segment also became the group’s single largest revenue generator, with more than 41 percent of total revenues of EUR 831 million that year.

With its dominance of the French foie gras market assured, Euralis set out to consolidate its position in the global market as well, acquiring stakes in foie gras producers in Canada and Bulgaria in 2005. At the same time, Euralis announced its intention to branch out further into the prepared foods market. This strategy led to the purchase of an 80 percent share in northern France-based Papillote, a producer of high-end prepared foods largely for the Paris region in 2005. By June 2006, the company had completed the purchase of a 20 percent stake in Stalaven, a Brittany-region based producer of delicatessen foods.

While it focused on building its prepared foods operations, Euralis also continued to seek out new growth opportunities for its other divisions, and particularly its grains division. In 2006, the company announced plans to invest in the production of bioethanol. That effort, in association with Spain’s Abengoa Bioenergy, began development of a production facility in Lacq, with a total investment expected to reach EUR 140 million. From a simple grain cooperative, Euralis had grown into one of France’s major agro-industrial groups in the 21st century.

M. L. Cohen

PRINCIPAL SUBSIDIARIES

Arlesa Semillas; Biogemma; Bsn Distribution SudOuest; Codigers; Euralis Gastronomie; Euralis Legumes; Euralis Saaten; Euralis Semences; Euralis Vigne; Euralis Volailles; Eurasud Appro; Eurasud Cereales; Eurocob; Pau Saaten GmbH (Germany); Pau Semillas SA (Spain); Sanders Adour Aliments; Seretram; Soléal; Soltis.

PRINCIPAL COMPETITORS

Groupe Terrena; Compagnie Laitiere Europeenne S.A.; Provimi; Lambert-Dodard-Chancereul; Agrial; Coopagri Bretagne; UNICOPA; Groupe Roullier; Epis-Centre; Cooperative des Eleveurs de la Region de Lamballe; Evialis S.A.; Société Cooperative Agricole UNEAL; Arrive S.A.