French agri-food group Avril has decided to sell its animal processing units, to focus on acquisitions and investment in its core plant-based business and take advantage of a surge in demand for alternatives to meat.
Created by French oilseed and protein crop growers, Avril is the European Union's largest biodiesel maker and a leader in animal nutrition, cooking oil and plant-based chemical products.
The group is looking at acquisitions in the sectors it has identified as high-potential: specialty ingredients, consumer brands, renewable energy and services for farmers, including animal nutrition, Avril chief executive Jean-Philippe Puig said.
"We want to concentrate all our resources on plant processing - we believe that this is our core business and this it is where we have strength," he said.
Avril will seek to increase output of plant-based protein for the food industry, as it aims to benefit from what Puig said is a market growing by 14% a year. The initial focus will be on the highly-profitable sport and infant markets, he said.
Meanwhile, Avril, which reported sales of €5.8 billion ($6.9 billion) last year, will sell its eggs business, which had been suffering even before last year's slump when the pandemic destroyed catering demand. It is also selling its pork business, although it benefited from Chinese demand in 2020.
Already, last year Avril formed a joint venture with Dutch nutrition company Royal DSM to produce around 5,000 tonnes rapeseed-based protein for the food industry in Dieppe in northern France from 2022.
The company's financial branch Sofiproteol took a minority stake in Austria's Vegini, which makes meat-like products, such as hamburgers, from peas.
Puig was also optimistic the group will sustain improved results in its biodiesel and oilseed branch Saipol after a rebound in oil prices, soaring oilseed markets and good demand from trucks for its 100% biodiesel Oleon-100 product.
Reduced competition after France this year banned palm oil in biodiesel and scrapped tax advantages for soybean in the renewable fuel will also help, Puig said.
Avril's earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose 43% last year to €243 million.