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INTERVIEW WITH JUAN MANUEL GONZÁLEZ SERNA, CHAIRMAN OF GRUPO SIRO

26 Oct 2016

The results on last year posted by Grupo Siro reflect significant growth in both turnover and revenue. What is your assessment of these figures?

The 2015 results undoubtedly reflect the consolidation of sustainable growth by Grupo Siro. Last year, we posted a turnover of 602 million euros (an increase of 7% on the previous year), invested 30 million and obtained an EBITDA of 90.

This was made possible by our more than 4,000 employees, whose daily efforts led to these results. Nonetheless, we must continue to work hard and rigorously to bring the best products in the market to our client’s shelves; tasty, healthy products of the highest quality and levels of food safety at the best possible price. We strive to cultivate a future; a sustainable future in which to continue improving, growing and meeting the commitment we have made to our stakeholders.

Since the outset, we have been able to grow sustainably by acting in the present but always looking to the future; focusing on sustainability for both the company and the sector.

In terms of turnover, how much is down to your strategic partnership with Mercadona?

At Grupo Siro, we maintain a strategic partnership with Mercadona as our main client. Specifically, Grupo Siro is responsible for manufacturing biscuits, sliced bread, pasta, pastries and cereals for the Hacendado brand.

This partnership means that 91% of our production reaches consumers from the shelves at Mercadona stores. It allows us to offer society products of the best quality, the best flavour and the best price possible. We share a business model with Mercadona that is based on trust and stability.

Furthermore, we are committed to the joint development of a competitive and profitable agriculture model for all links in the agri-food chain via our sustainable agri-food chain project - Siro Agro, which shares the Mercadona CASPOPDONA model philosophy.

Let’s talk about innovation. What are the main projects currently being developed at your I+DEA centre?

At our I+dea innovation centre, a benchmark in the European agri-food sector, we have focused on becoming specialists in everything we make. We are committed to the ongoing improvement of our products and the analysis of consumer trends and needs in order to develop new products that can meet consumer expectations while always working very closely with our factories and highly focused on our businesses.

At our Ideas Factory, we understand innovation in the agri-food sector from a global perspective. On the one hand, innovation aimed at meeting the needs of society in general by offering the products demanded by consumers and clients; and, on the other hand, innovation aimed at the agri-food sector by committing to its development and industrialisation through a Sustainable Agri-food Chain from source.

Grupo Siro maintains a strong commitment to research and innovation. In fact, the Grupo Siro Foundation Agri-food Research Prize aims to incentivise and foster these initiatives in the sector, in line with our commitment to sustainability and the overall development of the entire Agri-food Chain.

What is your company's strategy?

Grupo Siro seeks to meet the needs of our stakeholders, with the focus always on the client, through efficiency and innovation, and with healthy products of the highest quality and best possible price.

We have developed a Business Model around stable partnerships based on trust that bring value and contribute to joint progress. Hence, via our focus on Sustainable Social Commitment, Grupo Siro is committed to being a leading food group that concentrates and focuses our business on all those products made directly from cereal as the raw material.

For example, we are working to strengthen the primary sector and develop an agriculture model focused on improving productivity and quality throughout an Agri-food Chain that can bring stability and profitability. Wheat production - our main raw material - is low in Spain: it is a volatile market with uncertain levels of supply.  Stability in the production of quality wheats can enable the industry to increase efficiency in production processes and have a positive effect on the end product by increasing quality and flavour while also maximising value for consumers. Hence, we have set a target for 80% of the durum wheat consumed by the company to come from local suppliers forming part of the Siro Agro Project.

Another of our hallmarks is our support for the labour inclusion of people at risk of social exclusion, who currently account for 14% of the workforce, a total of 583 employees.

Stability in the supply of raw materials is essential for a business such as yours. How do your agriculture laboratories serve this goal?

At Siro Agro, we are working in two clearly distinct areas. On the one hand, we undertake research and trials at our agriculture laboratories on the various types of soil and climate so that we can find the most suitable varieties of wheat for our businesses. On the other hand, we are deeply involved in a major learning process aimed at building a crop model that can be reproduced elsewhere; a quality, efficient and profitable model that can lead to increased knowledge, value and security for the entire chain.

All this work is aimed at developing a competitive production model at Grupo Siro in partnership with farmers that can meet the needs of this sector. In other words, we want to foster an Agri-food Chain throughout Spain in which every link that adds value wins. Our work with the various links in that chain allows us to combine farming interests with industrial interests so that farms grow the type of wheat needed by the industry, leading to increased process efficiency. This is the only way to generate a competitive edge and guarantee the sustainable future of wheat production by farmers.

Furthermore, the involvement of farmers and suppliers helps reduce the cost and environmental impact of transporting raw materials. Hence, within the framework of our sustainability model, we seek to reduce the environmental footprint of all our operations.

Through all these efforts, and with a relationship of trust and transparency, we are specialising our operations and creating synergies among all the actors involved in order to maintain and enhance the value chain in the agri-food sector.

What does the Grupo Siro Foundation Agri-food Research Prize bring to your business project?

The Grupo Siro Foundation Agri-food Research Prize not only enshrines the company’s commitment to incentivising and recognising research and innovation efforts but also enables innovation to be used and applied to developing an agriculture model that can guarantee competitiveness and profitability for farms, generate wealth in local environments and contribute to social development.

The prize translates the support from Grupo Siro into the development, specialisation and promotion of the agricultural sector, specifically through the application of technology solutions to cereal production. Cultivating a future means working together under criteria of productivity, performance and efficiency, and applying our research to the entire farming process.

What challenges does your company face?

Our main challenge - in line with our philosophy - is to continue cultivating a future and keep growing, while meeting the commitments made to our stakeholders from a strict perspective of Sustainable Social Commitment. We want to be a company that society wants to exist.

We therefore seek to achieve the economic, social and environmental targets set for 2019. For example, as part of our sustainability model, we have set targets to be achieved by 2019 for 80% of our durum wheat consumption to come from farmers in Castile-Leon forming part of the Siro Agro Project and for at least 4% of the workforce at each of our work centres to consist of people at risk of social exclusion.

We also want to boost improvements in the health of consumers by enhancing the healthy characteristics of our products (less saturated fat, more fibre, etc.) and have 10% of our products targeted at groups with specific nutritional requirements: celiacs, diabetics, etc.

As an agri-food company, we feel a special responsibility to caring for the environment. We are already working on calculating our carbon footprint, implementing energy efficiency measures and such projects as the ‘Paperless Factory’ and ‘Zero Waste to Landfill’. Hence, we are working to reduce the amount of waste generated, with a focus on ensuring that all of our factories are zero-landfill operations and that 80% of waste is reclaimed. In this regard, our co-product business allows us to reduce food waste and complete the sustainable production chain.

In short, our challenge is to keep working at the highest level to be a sustainable company well into the future that specialises in the products we make through constant improvement and a search for new trends and processes. We are going to maintain our commitment to long-term projects that represent increased value for the consumer, consolidating innovation in areas where needs are not being met. We will always maintain close relationships with our factories in order to increase efficiency, effectiveness and velocity.

QCOM