Lesieur Cristal: Agribusiness

French group has completed a milestone in its internationalisation process, which is focused on the Maghreb, West Africa and Eastern Europe. SNI has also divested 12.9% of Lesieur Cristal capital equity to several Moroccan institutional shareholders. Following these operations, SNI’s stake in Lesieur Cristal became 22.3%. The transfer of SNI stake in Lesieur is part of the investment company’s aim to divest its shareholding in its mature agribusiness subsidiaries with stable growth prospects, as announced during the delisting and subsequent merger of Omnium Nord-Africain and SNI.

In 2011 the group’s margins and profitability suffered tremendously from the sharp increase in the cost of soybean oil internationally. Nevertheless, beginning in the second half of 2011, the company began reporting healthier margins. Benefitting from positive effects on prices and quantities, turnover leapt 19.8% as compared to the first half of 2011.

Indeed, the group had gradually increased prices over the second half of 2011 to pass on the rise in the cost of inputs, thus enhancing margins. The Moroccan edible oil market is characterised by a relatively inelastic price demand that enables companies to increase the input price, thereby affecting the final cost for consumers. In the absence of additional edible oil refining capacities on the market (new players or additional capacities by existing competition) and a sustainable drop in the price of olive oil (due to a structural surplus in olive oil), Lesieur Cristal should see its market share in the seed oils segment recover to 61% by 2014, similar to levels seen in the six years prior to 2010. In 2010 the drop in the group’s market share for this segment (falling from 61.3% to 60% in 2010 and later to 58% in 2011) was brought on by the substitution of seed oils by olive oil due to an exceptional olive harvest that led to a significant decrease in prices. For 2012, turnover is expected to grow at a lower rate (6% versus 12.9% in 2011) due to less favourable economic prospects. Gross marketing is expected to recover and to stand at 18.5% in 2012 versus 12.8% in 2011.

THE COMPANY: A pioneer company in the Moroccan agribusiness industry, Lesieur Cristal’s core business areas are oilseed crushing, oil refining and soap manufacturing. Its product range includes oils, body soaps, cattle cakes and detergents. Its oil products portfolio includes such brands as Lesieur, Cristal, Cristal Friture, Huilor, Oleor and Graine d’Or, and its olive oil products are marketed under the brand names Jawhara and Mabrouka. Its body soaps brands are Taous, Genuine Taous and Taous Beauté, and its household detergent brands are El Kef and El Menjel. Endowed with the largest crushing and refining capacities (300 kilotonnes per annum and 460 kilotonnes per annum, respectively), Lesieur Cristal is the leader in the Moroccan oilseed industry with a 58% market share.

DEVELOPMENT STRATEGY: After a difficult year due to a surge in the price of raw materials internationally, a more competitive environment and the substitution of olive oil for seed oil by many households – as the former became temporarily more affordable due to a remarkable harvest – Lesieur Cristal boosted its sales and financial performances, disclosing an improvement in the first half of 2012 as compared to its performance in 2011. The company managed an enhancement of its margins despite an unfavourable macroeconomic situation as well as the prolongation of inflationary pressures on the price of raw materials. The Moroccan edible oil market’s main source of supply is international commodity markets. Indeed, Morocco imports 100% and 70% of its needs in raw soybean oil and sunflower oil, respectively. The Moroccan edible oil market is characterised by the dominance of soybean oil, accounting for 70% of total consumption thanks to its more favourable affordability as compared to sunflower, colza and corn oil.

The first half of 2012 witnessed the sale of a 41% stake of Lesieur Cristal, formerly owned by Société Nationale d’Investissement (SNI), to Oléosud, a subsidiary of France’s Sofiprotéol and a major player in France’s edible oil industry. Through this acquisition, the

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