Ricardo Migueláñez. Agricultural engineer. @rmiguelanez
Ricardo Migueláñez.- Dcoop is unstoppable. It has undertaken a good number of mergers in a range of sectors in the last few months. Have you put the Deóleo operation behind you?
Rafael Sánchez.- I don't think one has anything to do with the other. We have our strategy of adding cooperatives and increasing our market influence. We're also working to improve sector numbers, making Dcoop a more global agri-food company that is not strictly confined to olive oil.
Deóleo was a specific project that went awry and has in no way influenced the group's strategy. Dcoop continues to grow in all sectors and to develop its industrial and commercial projects, among others of notable importance.
R. M.- How is the olive oil market doing at present and how might that performance impact your company?
R. S.- We need mechanisms that allow us to adjust supply and demand. We've said it many times, but Spain's National Competition Commission won't authorize it. We had a good opportunity with the CAP reform for the sector to be regulated at COM level, but the European Union's Directorate General isn't making it easy for us either. In the end, we're suffering from the same problems that have always plagued our sector: alternating years of surplus and shortage and the consequent immediate effect on price.
The situation was foreseeable, and now we have to face the repercussions it will have on the market, both at national level and in terms of exports. The whole world is already thinking about the next harvest. This year was as bad as it could have been, due to the lack of rain this winter and also to the summer we're having, which practically started in April with extremely high temperatures. In May we had very warm weather in the midst of the ripening period, and the harvest will probably be shorter than initially expected.
The goal at the moment, with the low production levels we're going to have, is to try to have the smallest possible impact on the markets. After everything that we have achieved in the last few years in terms of global market share, it would be a shame not to be able to meet that demand due to lack of product or because prices rose too high.
That has to make us take a step back and think for a minute, it has to make the EU think about the importance of putting in place certain stability mechanisms in this sector.
R. M.- As regards Dcoop, what general rules have the company and the team been following in the last few months?
R. S.- We are diversifying, developing new sections and strengthening our focus on wine, which is a very important project for the group. We have grown considerably following the merger with Baco, which has led to the inclusion of other cooperatives. Now we have to develop the industrial aspect and advance on sales of packaged oil and wine. With regard to farmers, we're also adding new sections, developing and industrializing them, such as the inclusion of the goat's milk and beef groups.
Since our strategy took a hit as a result of our exit from Deóleo, we are waiting for the right moment for production levels to recover and to roll out our own brand, the packaged oil project we have been working on. We're working diligently to develop Mercaóleo, following the acquisition of Cargill's 50% stake, but we also want to develop the market in Spain, our own brand and the HoReCa channel much further. There's a lot of work to do in that regard, and that's what we'll be focusing on in the coming months.
At the same time, we want to improve work with the cooperatives, help them boost quality, production processes, competitiveness, and all aspects related to supply.
R. M.- At international level, I understand that you're implementing different strategies for each product and market. The strategy for olive oil is not the same as the one for wine. How is that being organized?
R. S.- What's important are the synergies being created. We have a very high level of internationalization in table olives with which we are reaching a very large number of countries with our own commercial structures. Then we also have olive oil, an area we will continue to strengthen. Once we have an industrial project focused on packaged wine, that will enable us to reach large supermarkets in those countries where we already have a foothold. These synergies aren't immediate; they are developed over time. I believe that the steps we need to take are clear, and we have to reinforce them with new products and to strengthen our sales team.
R. M.- Innovation is a key issue, at both national and international level. How are you approaching it?
R. S.- We are working on the sectors that are most developed from an industrial and commercial standpoint, such as the table olive. Olive oil doesn't leave much wiggle room in R&D because it's very well defined and has very few possibilities; however, we're rolling our projects focused on formats and specific products that serve specific purposes. We've also starting working on by-products from the olive grove, not just those related to oil.
We're working on some projects related to stockbreeding, such as improving our associates' farms as well as those of our cooperatives. There are many projects under way, such as collaborations and undertakings with research centers and with the university, which we are reinforcing and aim to continue to strengthen going forward.
R. M.- Do you believe that the many changes in the leadership at Deóleo and those affecting ownership may affect the future of the company and even the market?
R. S.- In the end, changes affect everything. We would have liked to have resolved it in another way, but in the end it was resolved via a mutual fund. The problem arose at a very complicated time and in a market that is already quite difficult. In Spain, we're seeing minimal competitiveness and profitability at packaging companies. The olive oil value chain is very narrow in scope, with minimal margins. That, together with the tremendously complicated situation we're seeing in the market, a lack of product and continuously rising prices, is even more difficult.
Now is the time to provide stability, trust and a future to the company. It's not about the market situation but, rather, about a situation that's more normal, where the economic power of this investor affords the company solvency and guaranteed continuity, which is what everyone in the sector needs. Having a company that leads the industry in some way and that is a leader in the markets is positive for everyone and we hope that it happens; however, at the moment, the situation is very tumultuous.