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Pioneering in sustainability 2012 Corporate Sustainability Report Link to Success

2012 Corporate Sustainability Report Agrifirm

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Page 1: 2012 Corporate Sustainability Report Agrifirm

Pioneering in sustainability2012 Corporate Sustainability Report

Link to Success

Page 2: 2012 Corporate Sustainability Report Agrifirm

Facts and Figures

Composition of Personnel Complement

• Cooperative with approximately 18,000 members• Managed by an Executive Board (three members)• Supervision by a Supervisory Board (ten members)• Various subsidiaries operating worldwide. the Netherlands, Belgium, Germany, France, Spain,

Romania, Hungary, Poland, Ukraine, Russia, Bulgaria, the United Kingdom and China• Revenue: € 2.436 billion• Net profit: € 21.1 million

Distribution of Total Number of Employees

Sales Volume (x 1,000 tonnes)

Compound feed 4,155

Wet feed 2,217

Premixes and concentrates 551

Cereals, potatoes, onions and carrots 617

Fertilisers 374

Organic fertilisers 505

Crop protection products (€ millions) 116.5

Gender

24% Female76% Male

Employment Contract

13% Definite87% Indefinite

Age

25% <29 years51% 30-50 years24% 50< years

Job Families

3.4% Management41% Commercial11.9% Staff, Support and Services2.7% Research and Innovation38.2% Operations2.7% Others

1.7% Agrifirm Group7.8% Agrifirm Plant6.7% Agrifirm Co-products21% Agrifirm Feed6.5% Abemec1.1% Agrifirm Belgium19.5% Nuscience Group1% Oldambt B.V.4.7% Agrifirm Deutschland1% Agrifirm Exlan3.7% Agrifirm Polska2.6% NutriControl4.1% Agrifirm Magyarország Zrt18.9% Agrifirm Winkel

The total number of FTEs in 2011 was 3,491.

Page 3: 2012 Corporate Sustainability Report Agrifirm

At Agrifirm we are convinced that sustainability and innovation are important pillars of support for the future success of our company and our members: livestock farmers, crop farmers and horticulturalists who do their best every day to produce the highest quality foodstuff. Sustainability is subject to more scrutiny in the market through the food manufacturer and supermarket programmes. And dealing meticulously with raw materials is one answer to the fluctuating prices due to scarcity.

Because of the strong competition in the markets in which our members operate, a sharp eye for cost price is always crucial. Sustainability cannot be at the expense of the profit and must provide prospects for better results in the long run. Agrifirm is deliberately sticking its neck out by pioneering and seeking out new solutions: solutions which we search for by doing things even better yet, but also by sometimes tackling things in a radically different way.

In this annual report we will introduce you to a number of Agrifirm pioneers in the field of sustainability. Pioneers who are already achieving outstanding results; pioneers who work on projects in the development phase; projects that open a new perspective on combining a smaller footprint with a favourable cost price. Agrifirm’s ambition is to be a step ahead of the future by continuing to pioneer in sustainability.

Ton LomanChairman, Agrifirm Executive Board

Preface

Page 4: 2012 Corporate Sustainability Report Agrifirm

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Agrifirm, A Link to Success

Agrifirm is a cooperative in which more than 18,000 Dutch enterprising farmers and horticulturists have bundled their strength. And successfully so: collaboration provides a score of sustainability advantages with regard to high-quality products such as animal feeds, sowing seeds, fertilisers and crop protection products.

Agrifirm acts as a ‘link to success’ for farmers and horticulturists and focuses 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. Our distinctive quality is that we always think in terms of customer-oriented solutions and always pursue a better result.

2012 was a year of unusual milestones. We officially opened the new office in Apeldoorn in September, and were awarded the ‘Royal’ predicate. This honour does not simply fall from the sky. On the contrary, Agrifirm was awarded the designation ‘Royal’ because the history of our company goes back more than 100 years.

Agrifirm was awarded the designation ‘Royal’ because the history of

our company goes back more than 100 years.

Page 5: 2012 Corporate Sustainability Report Agrifirm

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MissionThe interests of its members are key for Agrifirm. 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 to our members and customers. We support farmers and horticulturists with sustainable, profitable concepts for achieving optimal results. The increase in value of the collaboration is returned to our members through profit distribution.

Member meetings and Youth DaySince the members of the cooperative are our most important stakeholders, we organised many different meetings in 2012 during which members could have contact with Agrifirm. The most important ones were the Agrifirm Member Days. For ten days at various sites in the country we offered members a varied programme to provide insight into the cooperative. The result: more than two thousand visitors and many positive reactions to the arrangement. We are working on further development of the Member Days in 2013. For the young entrepreneurs Agrifirm is organising Youth Day. The theme this time was: ‘The role of image and communication in the agricultural sector.’ More than six hundred young business people in agriculture and horticulture participated.

Farmers and horticulturists have worked together in cooperatives for over 200 years. In difficult economic times the cooperative also proves to be a strong foundation for associated parties. The United Nations (UN) had already declared 2012 the year of the cooperative for a good reason. The key role for the economic development was the decisive factor. Agrifirm is proving that cooperatives work excellently these days. Our six divisions provide a broad assortment of products and services to the agricultural sector in the Netherlands and other European countries.

Six divisions • Feed Division: production and sale of

animal feeds; consultancy and research. • Plant 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.

• Service 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.

• Participating Interests Division: minority interests in several companies.

The up-and-coming cooperative

Page 6: 2012 Corporate Sustainability Report Agrifirm

Opting for Sustainability

Agrifirm4

Our innovation strategy supports our

sustainability strategy.

Sustainability and innovation are important pillars of Agrifirm’s organisational 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 foodstuff using healthy plants, striving toward healthy soil and 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 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. Agrifirm is always on the lookout for themes on which we can exert a substantial positive influence.

Page 7: 2012 Corporate Sustainability Report Agrifirm

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It is our belief that our contribution comes from the core competencies, in which our own employees especially have a key role. Their safety, welfare, commitment and motivation form the core of sustainable enterprise.

Collaboration with stakeholdersAgrifirm operates in a large number of markets. The company activities vary from production and sales of animal feed to commerce in crop protection products. 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 cooperatives, entering into (long-term) agreements, organising our meetings and workshops and by participating in research projects. Our key stakeholders are the cooperative’s members and our customers. However, suppliers, research centres, development organisations and partners in the chain are also indispensable.

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 the strategic processes at the corporate level.

Innovations are realised in collaboration with the Agrifirm Innovation Centre and other innovative departments within Agrifirm’s subsidiaries.

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

Page 8: 2012 Corporate Sustainability Report Agrifirm

Sustainable production starts at the front of the chain: with the procurement of raw materials. Agrifirm actively stimulates cultivation of sustainable or safe raw materials, not only for animal feed but also for human food. In addition we process large quantities of residual products in the food product and bio-based industry into high-quality animal feed, and we consult with suppliers on for example sustainable use of raw materials and recycling plastic waste of crop protection products. Key for the activities in the area of producing sustainable raw materials is that they produce verifiable environmental gains.

Working on sustainable raw materials

Page 9: 2012 Corporate Sustainability Report Agrifirm

Working on sustainable raw materials

‘One sees an increasing demand for compound products with regard to wet feed. The composition is determined by the raw materials available at that point in time, but the feed quality is consistent.’

The stackable wet compound feed allows us

to make more products accessible to our customers.

Bonda, one of Agrifirm’s subsidiaries, recently became the only company in the world to produce wet, stackable compound feed for cattle. It started up a new factory in ’s-Hertogenbosch in the fall of last year, with a production capacity of two hundred thousand tonnes of wet compound feed per year.

The innovative feed combines the advantages of different liquid, dry and stackable (dry residual) products, allowing Agrifirm to meet the demands of our customers even better. Cattle farms are getting larger and larger and more intensive and the number of cattle farmers using dry residual products in various types and forms is continuously increasing. The supply of these products is not always stable and not every livestock farmer has the option of feeding liquid dry residual products. The stackable wet compound feed allows us to make more products accessible to our customers. The stable composition and availability throughout the year are big advantages. The production method also has advantages for suppliers, as we can offer them more guaranteed sales through this procedure. The options for processing dry residual products from the food industry in livestock feed have thus improved.

Sustainably grown barley Agrifirm Plant has been working with chain parties on a three-year plan for the development and stimulation of brewing barley from sustainable cultivation. The Stichting Veldleeuwerik criteria are used for this. This foundation is a unique collaboration between crop farmers, consultants, suppliers and processors in sustainable food chains. They jointly translate sustainability into practical measures that result in more sustainable operational management in the entire chain. A grower associated with Stichting Veldleeuwerik draws up a tested sustainability plan for his entire company each year. This plan for continuously making products sustainable is based on ten indicators, including soil fertility, energy consumption and biodiversity. Agrifirm Plant, Heineken and Holland Malt have set themselves the objective to put this sustainably grown brewing barley on the market jointly.

New factory for wet compound cattle feed

Bonda, one of Agrifirm’s subsidiaries, recently became the only company in the world to produce wet, stackable compound feed for cattle, and last year it put a new factory into operation for this purpose in ‘s-Hertogenbosch.

Stackable wet compound feed

Bonda factory Transport Livestock farmer Silage Available throughout the year

Gluco+

Gluco+

Proti+

Proti+

Page 10: 2012 Corporate Sustainability Report Agrifirm

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Alternative sources of proteinAgrifirm is involved in making protein import sustainable and in the research on alternative protein strategies. Raw materials rich in protein are becoming scarcer worldwide and therefore more expensive. We are striving to do something about this. Together with the Agrifirm Innovation Centre, Agrifirm Plant has studied the possibilities of increasing the protein content in Dutch corn and wheat by means of better fertilisers. This is only one of the examples. Another initiative is research on increasing the rape share in poultry feed. This should generate more alternative sources of protein. We pursue the same effect with different new raw materials. In 2012 at the Agrifirm Innovation Centre New Raw Materials department we tested whether raw materials such as seaweed and insects could be used in animal feed. Some sources have proved applicable, but are still not significant alternatives for use in livestock feed.

Sights on the regional soy cultivationAgrifirm has put soy cultivation on the map in Northwestern Europe in the recent past. Soy was grown and tested at various places in the Netherlands in 2012, for instance in Zuid-Limburg, Noord-Brabant, Flevoland and Groningen. Soy tests were also carried out at two sites in Belgium in collaboration with a Belgian research institute. At the beginning of 2013 we further expanded the soy growers’ network with a German party; in addition, we are striving to strengthen ties with research institutes in Belgium and the Netherlands.

Agrifirm has put soy cultivation on the map in Northwestern

Europe in the recent past.

Research on alternative protein strategies

Page 11: 2012 Corporate Sustainability Report Agrifirm

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Next year we will carry out a practical test with growers in the Netherlands, the intent of which is to bring possible barriers to soy cultivation into focus and clarify whether soy can compete with crops such as wheat and corn.

Responsible soy in the entire chainSoy is an important raw material for protein-rich animal feed. The demand for soy is increasing worldwide for applications in food, animal feed and bio fuel. This is increasing the area cultivated with soy, especially in South America. It is important that this cultivation takes place sustainably with respect to conservation of nature, local employees and communities as well as other social aspects. In the ‘chain transition to responsible soy’ project, animal feed producers, livestock farmers, the dairy, meat and egg sectors, and foodstuffs producers are working on conversion to 100% responsible soy in 2015. Agrifirm Feed is closely involved in this via sector organisation Nevedi. The companies, along with the Sustainable Trade Initiative, are investing a total of several million euros in making the soy chain responsible.

In the framework of the 100% responsible soy in 2015 growing process, Dutch companies and South American soy producers signed the contracts in November 2012 for delivery of 280,000 tonnes of responsible soy. This is equivalent to doubling the purchasing of responsible soy in comparison to 2011. Approximately 16% of all soy and soy products processed in the Netherlands are certified and cultivated sustainably.

47.9% of all dry raw materials that Agrifirm processes into livestock feed consist of residual products that originate from the food industry and the bio-based economy. These are left over as part of the production of, for example, bio fuel, bread, cookies, margarine, beer and sugar. 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.

47.9%

Percentage Residual Product per Animal Type

65.1% Dairy Cattle

38.8% Pigs

31.5% Layer-hens

40.9% Broilers

Reuse of Residual Products from the Food Industry

There is a summary of the percentage of soy and

palm kernel flakes in Agrifirm’s livestock feed in

Agrifirm’s KPI report at www.agrifirm.com.

Page 12: 2012 Corporate Sustainability Report Agrifirm

Efficient processing of raw materials and the product transport to the customer are key Agrifirm tasks.Reduction of energy consumption, and thus effectively organised logistics, is the spearhead of our sustainability policy. The development of renewable energy sources acquired a major spot on the agenda in 2012. Agrifirm is no expert in this field and therefore collaborated with experts from the market for alternative energy. The options for using wind energy were investigated for all company sites. We have concluded that generating energy from wind is not feasible at our company sites due to permit obstacles.

Efficient production and logistics

Page 13: 2012 Corporate Sustainability Report Agrifirm

Efficient production and logistics

Introduction of the Energy Efficiency Index (EEI) in 2011 was a key step in the ability to produce more efficiently. It is used to map out the energy consumption per product unit at key product sites. 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. The following specific measures to reduce energy consumption were taken in 2012:

• The weather conditions and a good schedule made it possible for subsidiary B.V. Oldambt to let alfalfa lay on the ground longer, thereby pre-drying the alfalfa which saved energy at the factory

• The new Agrifirm headquarters has various new low-energy technology and materials, for example outer siding that decomposes CO2 and has a high insulation value, triple glass and a smart climate installation that distributes heat and cold to other rooms

• Motors with better fuel efficiency have been installed for heavy machinery such as presses and hammer mills. In addition, the company has invested in process optimisation whereby the start-up and stop procedures consume less energy

There has been notable progress in EEI at the Nuscience Group’s Drongen site. To a great extent, that progress is due to higher production and deliberate energy-efficient production. A reorganisation at the NutriControl laboratory in Veghel has resulted in a new situation as far as performing various types of analyses is concerned, with lower energy efficiency in 2012 as a result. The efficiency is expected to recover in 2013.

Energy Efficiency Index results 2012

By repeating this survey on an annual basis the energy

efficiency trend at each site becomes evident.

‘Improving the logistics process at a number of Agrifirm Feed branches allowed the cargo weight of bulk lorries to increase considerably, drastically lowering the transport costs.’

Energy Efficiency Index

In 2012 Agrifirm Feed Nederland, at the initiative of Nevedi, participated in a national energy scan

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The index, by production site, identifies how the 2012 energy efficiency compares to the 2010 reference year.

Page 14: 2012 Corporate Sustainability Report Agrifirm

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Production and transport are organised more

flexibly and efficiently.

Smart energy savings

Sustainable processing of crop protection packagingAgrifirm Plant has combined a waste processing company and a packaging company for the purpose of recycling waste material cost-efficiently. The waste processing company is well known in the waste collection and processing sector and has a national network. The packaging company specialises in processing empty chemical packaging. The waste flow is made suitable again as a raw material for new products.

Lower-energy transport Transport of products accounts for a significant part of Agrifirm’s energy consumption and thus its CO2 emissions. The intent is to organise transport efficiently and with low energy input. Investments were made at nearly all product sites and all sites have been running four shifts since 2012. Production and transport are organised more flexibly and efficiently, and these measures made it possible to close the Utrecht and Maasbracht plants. Trips from the plants could be scheduled in such a way that return freight could be taken back. In addition, there were Business Excellence projects at Agrifirm Feed in 2012 that contributed to more efficient scheduling, production and transport such as the IDEX project (in Oss, Veghel and Wanssum). The intent of the Business Excellence project is to improve the efficiency of the logistics process. As a result of the IDEX project, the loading density of the bulk lorries has improved at these sites and the transport cost per kilometre has been reduced.

Page 15: 2012 Corporate Sustainability Report Agrifirm

13

Each year, Agrifirm 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. In general, the land use and number of transport miles improved in comparison to 2011. Less grain was imported from outside Europe in 2012. The drop in feed miles and land use for eggs was due to better feed conversion. Additional information about the calculation of land use and feed miles can be found in the sustainability indicators report attached as appendix.

Feed miles and land use

20122011

Pigm

eat

Eggs

Broi

lers

Milk

3.9

m2 /k

g

3.9

m2 /k

g

3.6

m2 /k

g

4.8m

2 /kg

3.7

m2 /k

g

4.5

m2 /k

g

1.0 m

2 /kg

1.1 m

2 /kg

5

4

3

2

1

4,59

3 km

/kg

3,32

8 km

/kg

6,78

0 km

/kg

2,85

2 km

/kg

4,38

5 km

/kg

5,70

0 km

/kg

2,02

1 km

/kg

1,002

km

/kg

Agrifirm Magyarország Zrt. has installed a GPS system in all lorries. Drivers find thus the shortest route even more easily and they can avoid unnecessary detours. The logistics principles of ‘order and deliver’ and ‘efficient if possible, urgent if necessary’ have been further rounded out at Agrifirm Plant in 2012. Moreover we have presented plans for a central grain storage facility and complete delivery of products, meaning delivery at the grower’s premises. Agrifirm Plant opts for a modern logistics organisation so we work efficiently with less transport, among other things. The transport efficiency for crop protection products has thereby improved by 4.3% in comparison to 2011, which of course contributes to reduction of greenhouse gas emissions. Something else that helps in this regard is the increase in the number of lease contracts involving low-energy cars. While these numbered only 34 in 2011, 145 employees had a car with energy label A at the end of 2012.

2012 Agrifirm energy consumptionAgrifirm Group companies used the following amounts of energy last year: Gas (m3) 13,730,062, Gas (l) 304,944, Electricity (kWh) 165,545,406, Coal (tonnes) 13,306, Fuel oil (l) 215,288, Diesel (l) 7,678,358 andPetrol (l) 192,765. Renewable energy share: 2.56%.

Page 16: 2012 Corporate Sustainability Report Agrifirm

Striving for profit for the grower, innovations and sustainability are important pillars at Agrifirm. By facilitating farmers to enable plants and animals to perform optimally on the basis of our products and services, we contribute to reducing the food production’s ecological footprint, which in many cases goes hand in hand with improving profit for the farmer. The most important condition is good health of animal, plant and soil. The Agrifirm Innovation Centre, the Agrifirm Plant R&D department and the Nutrition & Innovation departments at Agrifirm Feed have a pivotal role in developing product innovation in this area.

Enabling plant and animal to perform

Page 17: 2012 Corporate Sustainability Report Agrifirm

We gear the quantity of minerals to the needs of the animal

during the various growing stages and production phases.

Gearing availability of minerals to the needs of animalsAt the Agrifirm Innovation Centre we focus a great deal of attention on making minerals like phosphorous and nitrogen optimally available. We gear the quantity of minerals to the needs of the animal during the various growing stages and production phases. For example, we try to raise the so-called P and N efficiency of animals to the maximum possible, as common sense tells us that what does not go into the body will not come out as manure. The Agrifirm Feed Nutrition & Innovation departments are closely involved in this. Our specific mineral-efficient feed concepts such as Air Line 2.0 and Pmin feed for pig farming and nP feed for cattle farming are results of this research.

Sustainability scanIn order to make Agrifirm’s innovative efforts to increase sustainability more tangible, Agrifirm performs a sustainability scan every year. The scan provides insight into the contributions in various areas: health of humans and animals (‘people’), biodiversity and greenhouse gas emission (‘planet’) and profit for the farmer (‘profit’). The 2012 scan shows that more projects in the Agrifirm Innovation Center focus on animal health and mineral efficiency. The scan also shows that better internal collaboration allowed for more intense focus on performance on the farm premises. This dovetails with our pursuit of ‘one firm Agrifirm’. In 2012 Agrifirm Plant focused the use of new (organic) fertilisers and their effectiveness in the soil. At the same time its focus on the optimum use of crop protection products has remained invariably high.

Enabling plant and animal to perform

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

‘The dynamic N model helps us predict when the organic share of fertiliser is released in the soil, thus allowing the crop to utilise nitrogen better.’

Avoiding antibiotic resistance in humans

Improving animal health and animal welfare

Training of internal or external stakeholders

0 20 40 60 80 100

Agrifirm Innovation Center

Agrifirm PlantAgrifirm Business Excellence

% of projects

Biodiversity: improve soil phosphate efficiency

Biodiversity: improve soil nitrogen efficiency

Biodiversity: improve soil physics

Biodiversity: reduce the use of Crop Protection Products

Climate: reduce the emission of heavy greenhouse gases (methane and nitrous oxide)

Climate: improve feed conversion

Climate: reduce energy consumption

Alternative protein sources

Reduce the cost of Agrifirm/member operations directly

Promote internal collaboration

Promote collaboration within the chain

People

Planet

Profit

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

Page 18: 2012 Corporate Sustainability Report Agrifirm

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Closing cycles with organic fertiliserAgrifirm is investing in proper use of new organic fertiliser flows, originating from for example manure processing and the bio-based economy. These improve soil fertility at the customers. 30% of the projects handled by the Agrifirm Plant R&D department target using organic fertilisers more efficiently. In short: organic fertiliser is being re-used and thus cycles are closed. This effect was marginal in 2012 due to external conditions. A lower volume of organic fertiliser was traded (565,358 tonnes in 2011 and 505,588 tonnes in 2012). The reason for this was the lower demand from a number of processors and the poor weather during the period manure is allowed to be spread. The legally required reduction of the supply room and the shorter spreading period also resulted in less demand. Therefore the supply outstripped demand. The fertiliser volume remained stable in comparison to other years (374,000 tonnes in 2012).

Predicting the availability of nitrogen in the soilIn a joint venture with the Louis Bolk Institute and Applied Plant Research (PPO), Agrifirm Plant has been developing a scheduling instrument for optimum fertilisation of the soil for the past two years: the dynamic N model. Growers and their specialists can use this prior to the season to gain a great deal more insight into the availability of nitrogen during the season. This instrument provides immediate insight into the situation if there is an N deficit and therefore additional fertiliser is required. With the N model we can use organic fertiliser flows even more efficiently.

In order to make Agrifirm’s innovative efforts to increase sustainability more tangible,

Agrifirm performs a sustainability scan every year.

Using organic fertilisers

Page 19: 2012 Corporate Sustainability Report Agrifirm

AgriFirm 17

Consultancy instruments for animals that perform wellFarm management is important for a good result from using Agrifirm products. Agrifirm Feed provides computer programs that assist the farmer in taking management decisions. The consultancy program helps pig farmers select the best feed schedule. The new ‘sow control’ sow approach, targeting sow farmers, is also a handy tool. Dairy farmers can use the MelkNavigator evaluation and consultancy tool to calculate exactly which feed cows need for the desired result. OPFOK 24 is a total approach for young stock. This system provides the right feed, tools and recommendations for the calf’s development in every phase in the first two years of its life.

Crop farm specialists provide sustainable adviceIn 2011 we already trained two crop farm specialists to become ‘sustainability specialists’. Another seven crop farm specialists received this accreditation in 2012 via CAH Dronten and the Stichting Veldleeuwerik foundation. Agrifirm Plant is one of the partners in the Stichting Veldleeuwerik foundation. The specialists draw up a sustainability plan together with growers. Agrifirm and a few partners have developed a number of consultation modules for this: the soil scan, construction plan scan and a module to calculate the carbon footprint.

Every kilogram of phosphate an animal does not eat does not end up in the manure either. This contributes to a healthy environment and biodiversity. Reduction of phosphate is an important spearhead for Agrifirm. Agrifirm Feed has developed special feed concepts for this in all sectors. Examples are: AirLine [2.0] and Pmin feed for pigs, and the nP feed for cattle. Agrifirm has lowered the maximum quantity of phosphate in feed in all cattle feed lines and our specialists have stimulated cattle farmers to participate in BEX (Dutch abbreviation for farm-specific excretion). In total, Agrifirm Feed reduced phosphate via feed by nearly one million kilograms in comparison to 2008/2009, thereby making a substantial contribution to achieving the sector objectives as described in the Nevedi and LTO feed track covenant.

More than 1.6 million kg reduction of phosphate in livestock feed

201186,706 kg

2011227,254 kg

2012953,631 kg

2012698,535 kg

Number compared to 2008/2009The numbers were calculated according to a new measuring method this year.

Page 20: 2012 Corporate Sustainability Report Agrifirm

More and more attention is being focused on the impact of food production on the earth and on the welfare of animals and humans. The demand for healthy and sustainably produced consumer products is growing. It is important to us that our customers are able to provide consumers with an ample and safe selection, which is why Agrifirm has a broad assortment and works actively with chain partners to develop and implement new concepts. An example of this is the cooperation between Agrifirm, ZLTO, Vion and Topigs in the area of reducing the use of antibiotics on farms.

Contributing to a sustainable consumer assortment

Page 21: 2012 Corporate Sustainability Report Agrifirm

Contributing to a sustainable consumer assortment

Good feed plays a key role in animal health.

Healthy animals are important to every livestock farmer’s profit. These animals require fewer antibiotics. and limiting the use of antibiotics reduces the risk of pathogens developing resistance. The reduction of 50% for 2013 stipulated by the government appears to have been achieved already in 2012. The official 2012 numbers from the Animal Medicines Authority (sDA) will be published in the spring of 2013.

Good feed plays a key role in animal health and reduces the use of antibiotics. The Agrifirm Feed feed concepts, such as Air Line® for pigs and WellCome for broilers, contribute to this. Agrifirm developed the VIGOR feed concept for layer-hens. VIGOR stimulates the intestinal health, digestion and feed utilisation in layer-hens. Studies by the Animal Health Service also show that VIGOR has a verifiably beneficial effect on chronic intestinal inflammation in chickens. In addition, the proper use of the feed schedule, the stall arrangement and operational management have a major effect on animal health. Agrifirm does not incorporate any antibiotics in its livestock feed (this is so agreed upon at Nevedi) and strives to reduce the use of antibiotics by livestock farmers via so-called farm visit sessions by ZLTO, Vion, Topigs and veterinarians, among others.

WeideKompas (Grazing Compass)A livestock farmer makes his own choice on whether to have his animals graze. To help the farmer gain higher profit from grazing, Agrifirm Feed developed WeideKompas, which answers all of the livestock farmer’s questions involving grazing by providing three choices, various tools and practical advice.

Continued improvement in animal health

‘Pasture feeding is economically attractive and also good for the sector’s image.’

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.

*Results are partly based on assumptions.*LULUC based on 2012, was not part of calculation 2010 and 2011.

CO2-eq/kg product

Milk

Pig Meat Dry

0 1 2 3 4 5

Pig Meat Wet

Broilers

Eggs

Organic eggs

20112012

The carbon footprint of milk, meat and eggs

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Agrifirm subsidiary Nuscience is also developing special ingredients to contribute more to good health. Aromabiotic is an example of this. These ingredients, based on medium-length fatty acid chains, contribute to better performance and improve animal health and animal welfare. It therefore contributes directly to reducing the use of antibiotics. The results at our Agrifirm Laverdonk research farm show that the livestock farmer can also make a good contribution himself by taking measures in management such as setting up a quarantine stable, working with a multi-week system, and discipline in the daily routine. For example, the test farm itself is now using between two and six daily doses per animal year (DDD) instead of the target value of ten DDD.

Continuation of the Den Bosch PackAgrifirm signed the Den Bosch Pact together with 28 parties in retail, the processing industry and the livestock feed industry in September 2011. This is an acceleration agenda that gives a concrete report on how the sector will need to develop in the next few years in order to have only sustainable meat on the Dutch supermarket shelves in 2020. Based in part on the agreements made in the Pact, in 2012 Agrifirm took stock of its position on the manure problems in the Netherlands. We are currently looking at how our feed concepts contribute to more sustainability on the farm premises and how we can communicate about this. We will announce follow-up steps in 2013.

Agrifirm subsidiary Nuscience is also developing special ingredients to contribute more to good health.

Feed concepts contribute to sustainability

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Stimulating collaboration between organic livestock farmers and crop farmersOrganic livestock farmers and crop farmers can be of assistance to one another by exchanging products, for example manure and the supply of roughage and concentrate. Agrifirm visits crop farms as well as livestock farms. We evaluate the quality of their products and put the farmers in touch with one another. Hereafter, the organic crop farmer and the livestock farmer make agreements between themselves on how they will deliver the products to each other.

Agrifirm Sustainability WikiAs Agrifirm we want to communicate on relevant sustainability themes on our Internet site. Our target group is extensive: from students and policy makers to interested citizens. We developed a so-called Sustainability Wiki in 2012, in which we describe the social themes in the agricultural sector in which Agrifirm is involved. Some examples are: climate change, sustainable raw materials and transparency. Our standpoints are listed below these themes along with a chronological overview of projects, initiatives and plans. The Wiki can be found at: http://www.agrifirm.com/agrifirm-group/duurzaamheid

Carbon footprinting refers to calculating the total greenhouse emissions of a product during its entire lifespan. This topic is becoming an ever more prominent item on the agenda of agricultural sector committees in the Netherlands, Europe and in fact the entire world. For example, Agrifirm Feed employees participated in launching the FeedPrint tool in 2012. The project was implemented by Wageningen University and Blonk Consultants. In addition, work is being done on international standardisation through a partnership of the European Feed Manufacturers’ Federation (FEFAC) with Food and Agriculture Organisations of the United Nations (FAO), of which Agrifirm is a member. At the initiative of Agrifirm Plant, work was done in collaboration with several chain parties on concluding a footprint tool suitable for Dutch arable farming. Now that there are various tools available for use in the sector, we note that there are differences generated between tools. For this reason we stimulate making the methodology for these tools more uniform via these committees, for example the Sustainable Agriculture Initiative (SAI) and FAO. In the end, this process should result in practical, useable tools which are easily interchangeable and supported by the entire sector.

Carbon footprinting

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Expert, motivated employees are indispensable for a company’s success, which is why we invest in our people. We offer them good terms of employment and training and career advancement opportunities. Furthermore, we are devoting increased attention to performance management, which now has a central role in our HR policy. And this is bearing fruit. For example, nearly 67% of our managers were promoted from another position within the company.

Employee opinion surveyBased on the results of our 2011 employee opinion survey all Agrifirm companies have chosen focus areas, such as personal development, leadership, communication or employee involvement. The Agrifirm companies will draw up an improvement plan based on the results. Our subsidiary Nuscience Group has, for example, based on the results, decided it wants to be more transparent and therefore wants to give employees better insight into the management’s strategic choices. Agrifirm Exlan focuses on its employees’ personal development and strategy. Agrifirm Deutschland invests more in training for its employees.

New headquartersIn September we officially opened our new headquarters in Apeldoorn. The building serves as headquarters for Agrifirm Feed, Agrifirm Group, Agrifirm Innovation Centre and Agrifirm Plant. Agrifirm’s identity received a great deal of consideration in the design of the building. Much attention was focused on agricultural details in the interior as well as the exterior, and old and new come together here. Many natural materials such as wood, concrete and glass were used in the construction, giving the building a strong, modern, sturdy character.

Agrifirm Exlan focuses on its employees’ personal

development.

The basis for success

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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 board of directors and the (Annual General Meeting of) Shareholders. In the case of Agrifirm the code has been adapted so as to provide a proper fit 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. No reports on corruption or discrimination were received under this scheme in 2012.

ReorganisationsThe Maasbracht and Utrecht Agrifirm Feed plants were closed in the second half of 2012. This decision was taken because the livestock feed market is shrinking steadily and because we want to be more efficient in production and transport from a strategic standpoint. It was recently announced that we will close a large number of Agrifirm Plant branches in the beginning of 2013 and that we will contract out the transport of Agrifirm feed beginning in 2014. These choices are natural consequences of drastic reorganisations. Agrifirm is making a maximum effort to prevent any dismissals. As part of the social plan we have drawn up, we are striving for the maximum number of reappointments, internally or externally.

Employee Training BudgetAverage amount spent on training per employee by company in 2011 and 2012.

Flemish pig farming is an important economic sector in Flanders. To emphasise this point, Agrifirm Belgium has joined forces with a number of other companies. Together they created the film ‘Flemish Pride’ which shows pig farming in a positive light. The final result can be viewed at: www.vlaanderenstrots.com.

Flemish Pride

Companies 2012

Agrifirm Group 1523

Agrifirm Feed 651

Nuscience Group 147

Agrifirm Deutschland 515

Agrifirm Polska 463

Agrifirm Magyarország Zrt. 136

Agrifirm Co-products 514

Agrifirm Belgium 982

Agrifirm Plant 814

Abemec 1950

B.V. Oldambt 106

Agrifirm Exlan 590

NutriControl 474

Agrifirm Winkel 220

Agrifirm Average 526

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Corporate Social Responsibility At the initiative of the employees themselves, Agrifirm regularly contributes to local or national charitable causes. The Groot Zonnehoeve district is located next to our Apeldoorn office building. Care group ‘s Heeren Loo will receive a large number of housing units where persons with psychological problems will reside on assisted living facilities. Further developments to the district include a playing field, community garden, orchard and sheep meadow. Agrifirm is making financial contributions to build up this district. In future we also wish to contribute our knowledge, for example in the area of greenery or feed supply. Agrifirm Magyarország Zrt. has donated money to various local projects, such as the organisation of a summer theatre, the volunteer fire brigade and a fund for primary schools. Nuscience donates to Vlaamse Kinderliga, Doctors without Borders and Kika. Agrifirm Poland sponsors the boys’ football team in Szamotuly and the girls’ volleyball team in Topola.

Agrifirm Plant and Bonda combine their aid to BurundiAgrifirm Plant has entered into an agreement with ZOA, an organisation providing aid in Africa and Asia, for a potato project in Burundi. A crop farm specialist visited the country four times between September 2012 and February 2013 to transfer his knowledge in the field of seed-potatoes. After every visit he reported in personnel magazine ‘Plant-aardig’. Bonda has sponsored a potato drying facility in this same project.

Young Employees activityThe ‘Agrifirm Young Employees’ are ambitious employees up to the age of 35 who meet regularly to take training and expand their network. Two conferences were held in 2012. The employees went to Belgium from 6 to 8 June for the ‘Connecting People, Sharing knowledge’ conference. The programme also included a visit to the Nuscience headquarters in Drongen, and in December ‘Growing successfully’ was the theme in Apeldoorn, where the work included making a promotion film of these enthusiastic youngsters. The film is available at www.agrifirm.com/yea.

Performance managementIn 2012, effort was expended on implementing Performance Management within all companies that are part of the Agrifirm Group. We are applying performance management in employee evaluation at ten companies in the Agrifirm Group. The objective is to conduct scheduling, functioning and career interviews in a structural manner. Performance management focuses on sustainable deployment of our employees. This means that our employees make optimum use of their talents, are always at the right place or moving towards it, and are thus contributing to the organisation to the maximum extent. 42% of all employees participated in the entire cycle.

Any accident is one too many. Unfortunately, 54 incidents involving bodily injury took place at the various companies in 2012. To bring the number down, the Agrifirm Group has decided to start up the Safety First project. The purpose is that over time we will view safety more uniformly throughout the entire organisation. First it is a matter of orientation and setting up policy. By the middle of 2013 and 2014 we anticipate we will have more concrete steps in place to reduce the number of incidents. The average absence due to illness at Agrifirm was 3.1% in 2012. This is a respectable decrease in comparison to the 4.1% of the previous year.

• Accident frequency: 8.6 incidents per 1,000,000 work hours

• Average term of absence from work due to accident 21 work days

• Absence percentage as a result of accident 0.7%

Accidents and absence due to illness

Average absence due to illness 2012 %

Agrifirm Group 1.6

Agrifirm Feed 4.5

Nuscience Group 1.8

Agrifirm Deutschland 4.1

Agrifirm Polska 3.8

Agrifirm Magyarország Zrt. 3.2

Agrifirm Co-products 3.0

Agrifirm Belgium 2.8

Agrifirm Plant 2.8

Abemec 2.7

B.V. Oldambt 5.3

Agrifirm Exlan 5.5

NutriControl 4.4

Agrifirm Winkel 2.3

Agrifirm Average 3.1

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Theme Stakeholders

Use of antibiotics in animal feed

• Pig farming chain partners

• Pig and broiler farmers• Internal collaboration

in the field of calf farming

• Research institutes

Phosphate reduction animal feed

• Nevedi and LTO feed track covenant

• Pig and cattle farmers• ZLTO• International internal

focus via AIC

Reducing the carbon footprint

• Nevedi• Product Board Animal

Feed (PDV)• FAO/FEFAC• Research institutes• Bemefa• SAI (Sustainable

Agriculture Initiative)• Long-term Nevedi

agreements• GDF Suez

Creating sustainable supermarket products

• Veldleeuwerik Foundation

• Flanders Food

Sustainable raw materials

• Partners from the chain transition for responsible soy

• RTRS• Dutch growers• Wageningen University• ILVO Flanders• Nevedi• Bemefa

Biodiversity • Grauwe Kiekendief Foundation

• Agricultural Nature Associations

• Growers• (Local) governments

and provinces• District water boards• ZLTO, LTO North• WUR (Wageningen

University & Research centre)

• Organic fertilisers and crop protection products suppliers

2012 Stakeholder Consultations

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In this Corporate Sustainability Report, Agrifirm reports on its sustainability policy and the performance delivered in this domain in 2012. The report is published yearly and concerns all companies within the Agrifirm Group. The previous report was published in April 2012.

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 ‘Sustainability’. The foundations for social reporting at Agrifirm can also be found at this site.

For further information on the sustainability policy at Agrifirm, please contact Ruud Tijssens, Corporate Affairs, CSR and Strategic R&D [email protected], telephone +31 (0)88 488 29 00.

ColophonEditors: CSR department, Agrifirm Group BV Communication department

Concept and realisationHin & van Kimmenade, Schuttelaar & Partners

PhotographyMarcel Bekken

April 2013

Royal Agrifirm GroupLandgoedlaan 207302 HA Apeldoorn

PO Box 20007302 HA Apeldoorn

t +31 (0)88 488 10 [email protected]