Groupe Soufflet SA

1939–2002

Groupe Soufflet SA is one of the world's leading agro-industrial groups with an emphasis on grain collection, cereal processing, production and export, malting, and related activities. The company, based in Nogent sur Seine, in the north of France, has established top positions in a number of its primary areas of operations: the company is the number one privately owned collecter of grains in France, the leading producer of flour in Europe, the world's sixth largest maltster, the number one corn processor in France, and the number three rice producer in France. The company has also established a strong presence in the French vineyard supply sector, as well as a leading presence in the industrial bakery market. Since the late 1980s, Soufflet has also expanded into the consumer market, launching its own brands, including Perliz rice products and the Vivien Paille brand of dried vegetables. In France, Soufflet operates some 130 grain collection silos, 11 grain mills, ten malting plants, five bakery products manufacturing facilities, a corn processing plant, and a plant for processing rice and dried vegetables. The company supports its international operations, which accounted for 56 percent of the company's EUR 2.8 billion in sales in 2001, with a network of foreign subsidiaries in the United Kingdom, the Netherlands, the United States, and Belgium. Since the late 1990s, Soufflet has moved into the Eastern European market, acquiring or establishing subsidiaries in Russia, the Ukraine, Romania, Slovakia, Poland, and Hungary. In 2002, the company expanded its Eastern European position again with acquisitions in the Czech Republic. Soufflet remains controlled by the founding Soufflet family. Jean-Michel Soufflet, grandson of the founder, serves as CEO, while his father, Michel Soufflet, serves as chairman of the board.

Grain Depot at the Turn of the Century

Groupe Soufflet origins can be traced to the turn of the twentieth century, with the establishment of a grain depot at Nogent Sur Seine, in France's northern Champagne region. The depot functioned as a trading hub for farmers who brought their grain harvests for delivery to millers. Steady improvements in farming techniques and grain seed quality enabled France to assert itself not only as a major agricultural force on the European scene but worldwide as well. By the late 1930s, grain production had made steady gains, and in 1939 Jean Soufflet, who had taken over the grain business, constructed the company's first grain silo in Nogent.

Soufflet's ambitions went beyond collecting and selling cereals to include a broader range of services and products supporting the agricultural community. Over time, the company added such activities as the collection and distribution of seeds, as well as fertilizers and insecticides. The company also took an active role in researching and developing new farming and harvesting techniques to help farmers boost their production.

Following World War II, Soufflet incorporated his growing business under the name Etablissements Soufflet SARL. The company then entered into a period of growth, expanding beyond the Champagne region and adding new grain silos. By the 1990s, the company operated more than 100 silos throughout much of France, a number that climbed to more than 130 by the turn of the next century.

Diversification and Growth: 1950s-80s

In 1966, Michel Soufflet led the company in its first moves onto the international grain market.

1953–1986

In the 1950s, Soufflet began expanding beyond cereal trading, entering the market for malt production with the acquisition of the Nogent-based Grande Malterie in 1953. That activity was to become one of Soufflet's most important; as the company continued to expand, it built or acquired nine more malting plants in France to become one of the world's major malt producers, with more than 11 percent of the global market.

Jean Soufflet died in 1957, and the company's direction was taken over by his son Michel. Under this new generation, Soufflet gradually expanded into one of the world's top agro-industrial groups. Until the mid-1960s, nearly all of Soufflet's activity took place within France. In 1966, Michel Soufflet led the company in its first moves onto the international grain market. In order to support its new international growth objectives, the company built its own silo in the port of Rouen, which was then in the process of becoming a major hub for the world's grain shipping industry. By the middle of the 1970s, Soufflet had succeeded in developing a strong international component, underscored by the creation of a subsidiary in the United Kingdom in 1974. That subsidiary later grew to include three silos, including its own port silo.

Under Michel Soufflet, the company also stepped up its interest in the industrial side of the agricultural business. The company set up a dedicated technical department in 1970, working with farmers to continue to improve seed quality and production quantity. Soufflet itself was becoming interested in expanding its industrial operations beyond its malting facilities. In 1978, the company bought up a grain mill, a move that coincided with Soufflet's new strategy of becoming a major industrial group in the cereals sector. Soufflet quickly expanded those operations, building a network of some 11 mills in France and becoming the leading flour producer in Europe.

In the early 1980s, Soufflet followed its growing flour milling interests into a new sector, that of the industrial baking market. In 1983, Soufflet established its own bakery complex in the town of Terville, beginning production of frozen pastries and other baked goods. Soufflet's milling operations also led the company to become a prominent supplier to France's craft bakers, an industry later to be codified by French law. For that market, Soufflet developed recipes under a new brand name, Baguépi.

Soufflet continued its diversification into the late 1980s. In 1986, the company added maize milling, becoming the European leader with the purchase of Costimex, based in Strasbourg. Two years later, Soufflet added a rice and dried vegetable component when it acquired four processing and packaging plants. The company also constructed a purpose-built processing facility for its new operations in Valenciennes that year. The move into rice and vegetables also led Soufflet into a new arena--that of the consumer foods market--as the company launched its own brands of Perliz rice products and Vivien Paille dried vegetables.

The following year, Soufflet turned to another new market, that of the French wine-growing industry. With the creation of a new subsidiary, Soufflet Vigne, the company began offering products and services geared toward supporting the French wine industry. For this, the company opened its own network of supply stores featuring tools, fertilizers, and other grape-specific growing products, as well as other vintner's needs, including bottles and caps. Over the next decade, Soufflet expanded its Soufflet Vigne store network to nearly 20 units, thereby covering all of the major French wine-producing regions.

1889–1997

The year 1989 marked as well an important step in Soufflet's international growth. In that year, the company acquired Belgian milling group Ceres. Founded near Brussels in 1889, Ceres had grown to become the leading flour milling group in its home market--nearly half of the country's craft bakers purchased exclusively from Ceres--before becoming an important supplier to the European market. The acquisition of Ceres enabled Soufflet to take the leading spot in the European flour milling market.

Agro-Industrial Leader: 1990s and Beyond

By the early 1990s, Soufflet's annual revenues had topped the equivalent of EUR 2.6 billion. The company had successfully assumed a place among the majors in the global cereals industry, taking the number three place in Europe and the number six place worldwide.

Soufflet boosted its industrial bakery division in 1992 with the acquisition of Grigny Frais, a subsidiary of the Casino supermarket group, then in the process of restructuring its holdings. Two years later, Soufflet made a still more important acquisition when it took control of French milling and malting group Pantin. That purchase gave Soufflet the leading position in France in both the milling and malting categories.

Soufflet continued to expand into the late 1990s, beginning construction of a new malting plant in Rouen for a cost of more than EUR 30 million in 1997. In that year, the company also expanded its milling business with the acquisition of Pornic-based Laraison Frères, adding that group's three mills operating in France's western region.

Until the later 1990s, Soufflet operations had remained largely focused on the European market--while exports had risen to some two-thirds of the company's revenues, its French operations remained the group's largest component. The arrival of the third generation of the Soufflet family, in the person of Jean-Michel Soufflet, who took over the managing director's position in 1997, heralded a new, more internationally focused growth strategy for the turn of the century.

1997–2002

Soufflet took a dual approach to stepping up its international operations. On the one hand, the company began establishing new trading subsidiaries, including in the United States and Poland, while also turning toward the Far East, opening a representative office in Singapore and entering into a distribu- tion agreement with Japan's Nichimen in 1998. On the other hand, Soufflet targeted the international expansion of its industrial infrastructure for its further growth.

For this, Soufflet turned to the Eastern European market. In 1997, Soufflet formed a 70-30 joint-venture partnership with beer brewer Baltika to build and operate a malting plant in St. Petersburg, Russia, tapping into the fast-growing demand for malt products in that country. The success of that joint-venture led the partners to begin construction of a second, larger malting plant in 1999, with a new expansion planned for the early 2000s. By then, Soufflet had begun to expand elsewhere in Eastern Europe, buying up five malting plants in Hungary, Poland, Romania and Slovakia in 1998. The company expanded its malting operations again in 2000 when it acquired the Czech Republic's Moravska Sladovna, then in bankruptcy.

Soufflet's expansion in the malting market helped buffer the company against the sudden collapse of its milling market--between 1997 and 2001, the company's flour exports dropped by nearly 50 percent. The chief cause of this drop came from the emergence of a number of the company's former customer markets, such as Egypt, as self-sufficient flour producers. At the same time, a number of other countries began exporting flour production for the first time, with countries such as Morocco and Turkey becoming strong competitors on the international flour trade market. In response, Soufflet restructured its own milling operations to focus more on higher-value specialty products.

In 2001, Michel Soufflet turned over direction of the company to his son Jean-Michel, remaining on as chairman of the company's board of directors. In nearly 50 years, Soufflet had built his family's business into one of the world's leading agro-industrial groups. Yet Soufflet showed no signs of slowing down in its growth. In 2002, the company announced its purchase of majority control of Obchodni Sladovny Prostejov, the largest malt producer in the Czech Republic.