Groupe CECAB S.C.A.

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Groupe CECAB S.C.A.

BP 129
Vannes, F-56004 Cedex
France
Telephone: (33 02) 97 54 88 88
Fax: (33 02) 97 68 87 00
Web site: http://www.cecab.com

Cooperative
Incorporated: 1968 as Centrale Coopérative Agricole Bretonne
Employees: 5,265
Sales: EUR 1.31 billion ($1.7 billion) (2005)
NAIC: 424480 Fresh Fruit and Vegetable Merchant Wholesalers; 424430 Dairy Products (Except Dried or Canned) Merchant Wholesalers; 424470 Meat and Meat Product Merchant Wholesalers

Groupe CECAB S.C.A. (the Centrale Coopérative Agricole Bretonne) is one of France’s leading agricultural cooperatives and a major player in the European agricultural market. The Brittany region-based cooperative represents more than 8,000 farmer-members, and operates 39 production facilities. The company’s operations are grouped under five primary businesses: Agricultural Supply; Canned; Frozen; Meats; and Eggs.

The agricultural supply division includes the group’s vegetable production, including industrial vegetables, cereals and oilseeds, animal feed and potatoes, as well as its production of pigs, cattle and dairy cows, and other livestock. This division also includes the group’s supply operations, including its network of Gamm Vert and other agricultural supply stores and garden centers.

CECAB’s canned food business includes its D’Aucy canned vegetable operations, the leading canned vegetable brand in France, and one of the top two brands in Europe. CECAB has also extended the D’Aucy brand into the ready-meal market; the canned food division is responsible for the group’s production of pet foods. The frozen food business focuses primarily on frozen vegetables, while the company’s meats business is focused primarily on pork—CECAB’s Europig slaughtering facility in Josselin is one of the largest in Europe.

The last of CECAB’s five major divisions, Eggs, is the leading producer of shell eggs in France under the Matines brands with a 43 percent market share. This division is also a major producer of liquid eggs and other egg and egg-based products, through its ABCD and Karea brands. Karea is also the top European producer of frozen omelets. Together these operations produced more than EUR 1.3 billion in earnings for the group in 2006. Forty percent of that total came from industrial vegetables, while meats accounted for 35 percent. The agricultural supply business added 18 percent, and the company’s eggs operations contributed 7 percent. CECAB is led by Jean-Pierre Kermoal, chairman, and Jean-Michel Jannez, managing director.

JOINING THE BRITTANY AGRICULTURAL MIRACLE IN 1969

The Centrale Coopérative Agricole Bretonne, or CE-CAB, was formed in 1969 when five agricultural cooperatives in the South Brittany region, or Morbihan, joined together to group their production of cereals, potatoes, vegetables, and pigs. The move came as part of a wider drive by the Brittany region to redevelop itself as France’s new agricultural heartland. Over the next thirty years, the Brittany region and its cooperatives—which included Coopagri Bretagne, CANA (later Terrena), Unicopa and others—helped transform France’s agricultural sector following the modern, heavily industrialized model. In addition to vegetable and cereals production, CECAB boasted its own network of some 33 agricultural supply centers. Pig breeding—soon to become a Brittany region specialty—already featured strongly in CECAB’s list of activities, with a total of 2,000 sows among 270 breeders. At the same time, the newly formed cooperative also maintained a presence in the poultry, and especially the egg, market with some 60,000 hens and 20 breeders.

CECAB initially recruited members from the Morbihan region, but into the early 1970s began expanding beyond its home base, adding members across much of the Brittany region. The CECAB also took on a central role for its members, in particular by developing an industrial base for the processing of its members production. One of the group’s first moves into the processed foods area was its purchase of a farming collective in Saint Yves which operated a plant for freezing vegetables. That purchase, in 1969, provided the starting point for CECAB subsidiary Cecagel, which was renamed as Bretagne Surgel in 1979, and in 1990 as Compagnie Générale de Surgélation. CECAB boosted its frozen vegetables operations again in 1981, purchasing another farmers’ collective, Vallée de la Lys, near Lille.

The canning market, meanwhile, had become more and more attractive given the rapid rise of the supermarket sector in France. The development of a growing number of nationally (and later internationally) operating distribution groups, coupled with a surge in demand for canned goods, offered a strong perspective for the group in this sector. In 1969, CECAB began putting into place facilities for canning, acquiring a farmers’ collective in Pont Aven in Brittany, which operated its own canning plant. In 1974, CECAB acquired a new canning business, the Conserverie Morbihannaise, located in Lanvénégen in Morbihan. That group also added a new business, the preparation of canned dog and cat food, to CECAB’s growing product mix. CE-CAB also became a member of the region’s Union Fermière Morbihannaise, a cooperative canning operation based in Locminé.

CECAB’s move into the canned vegetables big time came in 1979 when it acquired a majority stake in Compagnie Générale de Conserve (CGC). That company had been founded in 1965 through the merger of two cooperatives in the north of France, the Union Production Vente and France Uni-Conserves. Following that merger, the enlarged cooperative launched its own brand, D’Aucy, which quickly established a reputation as a top-quality canned vegetables producer, both in France and internationally, and especially in Germany. The purchase of CGC enabled CECAB to create a dedicated canning division, which at the time also regrouped its frozen vegetable business. Following the CGC purchase, CECAB also added the production of ready-made meals. By 1984, the cooperative had extended its canning business again, with the acquisition of a stake in the Conserverie Depenne, based in the southwest of France.

BUILDING BRANDS IN THE EIGHTIES AND NINETIES

Vegetable production and canning, especially the D’Aucy brand, enabled CECAB to grow into one of the Brittany region’s—and France’s—major agricultural groups. The D’Aucy brand in particular enjoyed a great deal of success, and became the spearhead of CECAB’s strategy of developing itself as a major exporter during the 1980s.

COMPANY PERSPECTIVES

CECAB (Centrale Coopérative Agricole Bretonne) was created in 1968 in South Brittany. This solid regional basis has allowed it to become one of the leading French agri-food groups, with international business representing over a third of its earnings. The CECAB Group is vertically integrated in order to control the whole process from production to marketing. This is a significant advantage for the company as it can ensure product traceability in an environmentally sound manner. CECAB is driven by it network of skilled and dedicated men and women: farmers-cooperative members, semi-skilled workers, technicians, employees, salespeople and managers. They are forward-thinking, open and imaginative, pooling their skills and energy in order to develop the company and ensure customer satisfaction.

The mid-1970s had also seen the steady development of CECAB’s meats and eggs operations. The company established its own pig slaughtering and marketing operation in 1975, under the Sovimor name. In 1980, the group established a new slaughtering facility in Josselin in the Morbihan in partnership with a number of other regional cooperatives. By 1990, the phenomenal growth of Brittany’s pork sector led CE-CAB to move its operations to the newly built Olympig, also in Josselin, which became one of the largest pig slaughtering facilities in all of Europe. The move led CECAB to buy the Olympig operation in 1995. In 2001, the company ceded to a request by the International Olympic Committee and renamed the slaughtering facility as Europig.

CECAB expanded its eggs operations, too, during this time. In 1975 the cooperative bought Delaunay, which operated an egg-packaging facility, as well as an egg-breaking plant in Ploërmel in Brittany. The Delaunay operation then took on the name of Avicole Bretonne CECAB Distribution, or ABCD. This subsidiary helped CECAB build a major presence in producing a marketing both shell eggs and liquid eggs and egg products. While ABCD became a leading supplier to the industrial and restaurant and catering sectors, CECAB directly targeted the consumer market at the start of the 1990s. In 1990, the cooperative launched a dedicated subsidiary for this effort, complete with its own brand of packaged, shell eggs, Matines, and began directly supplying France’s supermarket chains. By 1994, the Matines brand had established itself as the brand leader in France, and by the dawn of the 21st century claimed a market share of more than 40 percent.

CECAB also continued to build up its D’Aucy brand through the 1990s. The company’s move into Spain in 1990, through the acquisition of Horticola del Ebro, gave the company greater access to the Spanish consumer market. Perhaps more importantly, the move into Spain came as that country’s heavy investment in the development of hothouse cultivation and other industrial agriculture techniques, coupled with a favorable climate, enabled it to emerge as one of Europe’s leading producers of fruits and vegetables.

The D’Aucy brand also made inroads into the United Kingdom, following the acquisition of Conserverie Peny, located in the Finistère region, in 1990. That purchase not only gave CECAB offices in Great Britain, but it also boosted CECAB’s ready-made meal operations, as that foods segment took off toward the dawn of the 21st century. The company continued to build up its ready-made meal facilities, opening a dedicated plant in Ciel, in the Centre region of France, in 1996. That facility followed on another vegetables processing and canning plant opened in Ciel in 1992. Called the Val D’Aucy, the new plant was built in partnership with the Coopérative de Verdun, and the Val Union cooperative group. In 1997, CECAB added again to its D’Aucy range with the opening of a quick-frozen food plant in Moréac, near its Brittany-region home base. These moves helped CECAB adapt to the rapid changes in French and European eating habits, which had seen a steady rise in the demand for ready-made, precooked, and otherwise easy-to-prepare foods. By the end of the decade CECAB, through its CGC, had become the French leader in the ready-made foods segment.

CECAB had also responded to the rising demand for turkey meat in France. Once confined to the end-ofyear seasonal market, turkey meat had begun to achieve rising popularity in the country. CECAB joined the market in 1988, setting up a turkey production division, and establishing turkey portioning and processing facilities. That operation was renamed Volaven in 1991 and was then boosted by the acquisition of Volailles de l’Odet’s, giving the company its own turkey slaughtering facilities.

KEY DATES

1965:: Founding of Compagnie Générale de Conserve (CGC), which launches D’Aucy canned vegetable brand.
1968:: Creation of Centrale Coopérative Agricole Bretonne (CECAB) by five cooperatives in the Morbihan area of France’s Brittany region.
1979:: CECAB acquires majority control of CGC.
1990:: Launch of Matines brand of shell eggs, which becomes leading egg brand in France.
1995:: Acquires Olympig, the largest pig slaughtering facility in Europe (later renamed as Europig).
2003:: Acquires Karea egg and egg products brand.
2006:: Acquires 70 percent of Globus in Hungary as part of international expansion.

EASTERN EUROPEAN EXPANSION IN 2006

CECAB continued to seek growth for its other operations into the new century. The company established a new subsidiary, PEP, building a production facility for a new range of egg-based products, including omelets, scrambled eggs, hard-boiled eggs and egg tubes, as well as beaten egg whites, for the restaurant, catering and institutional food sectors. That factory launched production in 2000. In 2003, CECAB acquired a new brand, Karea, which had established itself as a leading brand for the catering and institutional food markets. The following year, CECAB expanded into Belgium with the purchase of Ready Egg. That purchase helped consolidate CECAB’s position as one of the leading egg and egg product groups in Europe.

Into the middle of the first decade of the 2000s, CECAB’s growth was driven by two of its business units in particular, namely its vegetables and meats businesses. The company boosted its pigs operations through the acquisition of Aubret Cedro, adding to the company’s industrial plant network in 2001. On the vegetables side, the company acquired three factories from Boutet Nicolas in the Brittany region in 1999, then acquired the canning operations from CBA in 2004. These purchases not only helped reinforce CECAB’s position in France, but also allowed it to expand its international penetration. By mid-decade, the cooperative’s list of export market included Germany, England, Italy, Belgium, Spain, Brazil, the Netherlands, Japan, and Russia.

The expansion of the European Union in the middle of the first decade of the 2000s provided CE-CAB with new opportunities for growth. The company made its first move into the Central European region in 2006, reaching an agreement to buy 70 percent of Globus, based in Hungary. The move not only added more than EUR 120 million to CECAB’s annual sales—which topped EUR 1.3 billion that year—it also provided the company with a new hub for the development of its vegetables canning operations. The acquisition of Globus added that company’s brand, Felco, as well as a strong entry into the Polish market. Already one of France’s leading agricultural groups, CECAB appeared to be on its way to claiming a spot among the majors in Europe in the new century.

M. L. Cohen

PRINCIPAL OPERATING UNITS

ABCD; Aubret; D’Aucy; Europig; Globus.

PRINCIPAL COMPETITORS

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