Coöperatieve Centrale Raiffeisen-Boerenleenbank

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1 International Opportunities By Elizabeth Hund November 7, 25 Coöperatieve Centrale Raiffeisen-Boerenleenbank 2 Presented by... 1

2 Rabobank 25 Only AAA rated non-government bank 1 + years of agricultural/community banking experience 57, employees in 35 countries 3 Network Toronto New York Chicago Atlanta Dallas San Francisco Washington D.C. London Dublin Antwerp Frankfurt Paris Madrid Milan Warsaw Poznan Moscow Istanbul Singapore Mumbai New Delhi Jakarta Bangkok Taipei Hong Kong Beijing Shanghai Tokyo Mexico City Curaçao ao São Paulo Santiago Buenos Aires Sydney Melbourne Brisbane Perth Auckland 4 Presented by... 2

3 The global FAR team has 74 members in 12 different countries Utrecht (Global HQ) Mexico City New York Beijing New Delhi Mumbai Bangkok Jakarta Tokyo Shanghai Hong Kong Singapore São Paulo Sydney 5 Rabobank Locations in the United States Corporate Bank Rabobank NA Rabo AgriFinance Rabo AgServices 6 Presented by... 3

4 The financial link in the global food chain 7 Contents Section 1: Section 2: Section 3: Consumer Progression Production Trends International Opportunities 8 Presented by... 4

5 Setting the stage Section I Consumer Progression Key Drivers Behind Global Food Demand Income and Total Population 1.% 8.% CHINA GDP growth 22 (annual %) 6.% 4.% 2.% EUROPE-25 EAST ASIA CANADA US AUSTRALIA SOUTH ASIA INDIA MIDDLE EAST & NORTH AFRICA SUBSAHARAN AFRICA.% JAPAN -.2% %.2%.6% 1.% 1.4% 1.8% 2.2% 2.6% Population growth 22 (annual %) 1 Presented by... 5

6 Asia is Key to Future Consumer Demand Population GDP Percentage (%) India China World China and India most populated countries highest annual GDP growth Low income levels of those countries show enormous markets that are emerging. Source: Rabobank analysis based on UN data 11 China Economic Superpower? US Blns Dollars (199 Prices) 2, 18, 16, 14, 12, 1, 8, 6, 4, 2, Source: United Nations, Rabobank - GDP Growth by Country/Bloc Japan EU EU-25 United States China Japan India Asia-7 USA China Asia-7 India Presented by... 6

7 Demographics We are getting older! Population aged 6+ years in selected regions Percentage % World Europe US and Canada Asia Latin America Africa Higher interest in functional foods Require different serving sizes & packaging In the western hemisphere, health becomes progressively more important. Source: Rabobank analysis based on UN data 13 Industry Consolidation Turnover of top-1 retailers Turnover of top-1 food service Total sales in USD billion USD 64bn USD 473bn Total sales in USD billion USD 13bn USD 16bn Presented by... 7

8 Globalization Major players have become huge global companies Top Ten 21 Ranked by total sales (in USD billion) Retailers Food Service 1. Wal-Mart Stores Carrefour (France) Ahold (Dutch) 6 4. Kroger 5 5. Metro AG(Germany) Albertson s Safeway (US) Leclerc* (France) Auchan * (France) Intermarché*(France) 31 *2 Total above USD McDonald s Tricon Compass (England) Burger King Sodexho Alliance(Fr.) Wendy s 8 7. Aramark 8 8. Accor (France) 7 9. Six Contintents (UK) 6 1. Whitbread (UK) 4 Total above USD Section II Production Trends Presented by... 8

9 Production (%) World Beef Production Source: FAO N.AMERICA C.AM&CARIBBEAN S.AMERICA W.EUROPE E.EUROPE South America is poised to take over North America as the world s largest beef producing region 17 AFRICA S.ASIA&CHINA S.E.ASIA OCEANIA World Pork Production Production (%) Source: FAO N.AMERICA C.AM&CARIBBEAN S.AMERICA W.EUROPE E.EUROPE China accounts for almost half of world pork production 18 AFRICA S.ASIA&CHINA S.E.ASIA OCEANIA Presented by... 9

10 World Poultry Production Production (%) N.AMERICA C.AM&CARIBBEAN S.AMERICA W.EUROPE E.EUROPE AFRICA S.ASIA&CHINA S.E.ASIA OCEANIA Source: FAO Poultry production has shifted from North America & Europe to South America & Asia 19 World Dairy Production Production (%) N.AMERICA C.AM&CARIBBEAN Source : CFCE / FAO/Rabobank S.AMERICA W.EUROPE E.EUROPE 2 AFRICA S.ASIA&CHINA S.E.ASIA Developing regions are becoming more important for dairy production OCEANIA Presented by... 1

11 World Cotton Production % 25% 2% 15% 1% 5% % China USA India Pakistan Uzbekistan Brazil Australlia China continues to be the world leader in cotton production Source : CFCE / FAO/Rabobank 21 Consolidation of U.S. Farmers U.S. Farm numbers and Gross income Consolidation has been driven by: 1. Cost 2. Product sales advantages 3. Regulatory and policy considerations Number of farms ' Gross farm income $ billion Farm numbers Gross farm income Rabobank analysis based on US Census data 22 Presented by... 11

12 Farmers are Moving! Access to labor Environmental regulations Water availability Shift in focus of crops Market access and non tariff barriers 23 Beware Brazil! Use and potential of selected agricultural areas Agricultural frontier land in Brazil can be purchased for less than USD 35 per acre There are 22 M acres of potential area in the Cerrado Indiana, Iowa and Illinois have a total area of 96 M acres Million Acres $11/acre $2/acre Indiana, Iowa and Cerrado Illinois In use Potential $125/acre Argentina 24 Presented by... 12

13 Section III International Opportunities Top 5 Exporters % World Market Share in United States 15.5% 2. Netherlands 1.6% 3. France 8.6% 4. Germany 7.4% 5. Canada 7.3% 26 Presented by... 13

14 Top 5 Growth Exporters Top 1 Exporters (22) 1. United States 2. Netherlands 3. France 4. Germany 5. Canada 6. Belgium 7. Spain 8. Brazil 9. Italy 1. China The next 5 exporters are gaining U.S. is still the largest exporter but is consistently losing market share: 199 = 18.2% of the world exports 22 = 15.5% of the world exports Australia and Argentina have been growing rapidly. 27 Exports What are they exporting? Top 6 Exports (USD Billion) Fruits & Nuts 14% Meat, 21% Dairy, Eggs 14% Cereals, 15% Beverages, 2% Source: Rabobank analysis based on UN data 28 Fish & fish products 16% Presented by... 14

15 U.S. Export Trends 29 Don t Forget Exchange Rates Exchange rate index for selected currencies, 2 - April Index Jan- Apr- Jul- Oct- Jan-1 Apr-1 Jul-1 Oct-1 Jan-2 Apr-2 Jul-2 Oct-2 Jan-3 CAD EUR GBP AUD YEN 3 Apr-3 Jul-3 Oct-3 Jan-4 Apr-4 Jul-4 Oct-4 Jan-5 Apr-5 Presented by... 15

16 Tools of the Trade Political risk Rule of law Local financing 31 Joint Ventures If you can t beat em, join em Difficult but not impossible Loads of opportunities Key success factors are: Partner selection Careful structuring of the deal Cost control Attracting and retaining local talen Branding 32 Presented by... 16

17 Summary Consumer Progression Income Demographics Trends Production Trends Consolidation Globalization New Major Players Expansion of international trade 33 Presented by... 17