Chief Executive Officer
THE LAST FULL FINANCIAL YEAR OF HIS 33-YEAR TENURE ON THE MANAGEMENT BOARD OF THE AGRANA GROUP WAS TO BE A PARTICULARLY CHALLENGING ONE FOR CHIEF EXECUTIVE OFFICER JOHANN MARIHART. WE SPOKE WITH THE CEO ABOUT THE EXTRAORDINARY OPERATING ENVIRONMENT, AGRANA’S PROSPECTS FOR THE FUTURE, AND KEY MILESTONES OF HIS PAST THREE DECADES AT AGRANA.
1 A financial year of operating under exceptional conditions has come to an end. How has AGRANA done so far in meeting the challenges of Covid-19?
JM: We have faced a new reality for over a year now. The pandemic has made everything even more volatile and resulted in a sudden transformation in the way we work. Yet manufacturing itself is something you cannot do in a home office. We have navigated this tension between opposing needs very well.
2So what really counted in 2020|21 in particular was more than profit?
JM: Many would probably like to see an earnings result close to the level of the prior year1. With our product portfolio, we meet needs that are crisis-proof. But as fortunate as that is, it’s not easy to keep everything running as usual and to physically get raw materials to the factories and move our products to customers – amid remote work and virtual meetings. Our employees have shown tremendous dedication in the past financial year.
3 What prospects and future opportunities do you see for the Group as a whole?
JM: In terms of opportunities and prospects for AGRANA, I think nothing has changed as a result of the pandemic. Neither the world of sugar nor that of starch or of fruit will be any different. Our growth opportunities are intact. But even more to the point, profitable growth is the goal, and it’s harder to come by acquisitions with a reasonable payback.
4 Speaking of the future, the sugar factory in Leopoldsdorf in Austria was almost on the verge of closure. Where will sugar production in general go from here?
JM: Yes, Leopoldsdorf was on the brink of closing. A combination of rock-bottom prices after the quota abolition, pest pressure, drought and competing alternative crops, but also the high organic share in Austrian agriculture, have all led to reduced beet cultivation. This has us competing for raw materials – only higher sugar prices can guarantee that the requirement for beet will be met. Our market position in the Eastern European sugar deficit region is a good basis for this.
5 Sustainability is on everyone’s lips. What contribution will AGRANA make to achieving the Paris climate goal?
JM: AGRANA uses energy-intensive technologies, especially in the Starch and Sugar segments. We are subject to the EU emissions trading system, which means that for us, CO2 has had a price for years. We have a plan, complete with specific projects, for achieving CO2 neutrality in our manufacturing by 2040.
In the first stage, up to the 2025|26 financial year, we want to cut emissions by 25%. Specifically, this will be done through the switch to green electricity, the phasing out of coal in the last two sugar factories that operate with this fuel, and through many individual energy efficiency measures. Less-valuable by-products will increasingly also be used for energy recovery, as we have been doing in Hungary for several years with biogas from beet pulp and with straw combustion. However, to provide sufficient impetus, the price of CO2 will have to rise from the current € 40 per tonne to more than € 100, and there will have to be export relief or import charges for the CO2 loads.
6 You have served on the company's Management Board for almost 33 years, including a good 29 years as CEO – what were your personal highlights?
JM: I was entrusted with responsibility unusually early and for a long time. I think AGRANA’s growth trajectory speaks for itself. We were able to take advantage of the opportunities arising from the opening of Eastern Europe, EU accession and EU enlargement in the years from 1990 to 2000. And later, of course, we successfully diversified into fruit, ethanol and wheat starch. For me there are no highlights I would single out – every business segment, every project needs your full attention and demands determination and perseverance – and then when it succeeds, it’s satisfying. In a manager’s life, there is seldom the opportunity for true greenfield investments. I had that chance: The construction of the integrated wheat starch and bioethanol plant in Pischelsdorf was something special in this regard.
7 What do you wish the AGRANA Group and its employees for the future?
JM: The continued ability to anticipate future developments, remain flexible, be innovative, and do all this in a favourable economic policy environment.
1 EBIT in the prior, 2019|20 financial year before the retrospective adjustment was € 87.1 million.