Statement by the Chief Executive Officer

Dear stakeholder,

We are pleased with the performance in 2009 despite the economic turmoil. Nutreco applied strong measures at the beginning of 2009 to withstand the recession. Our programmes to reduce working capital and operational costs paid off. After a challenging start, we ended the year in a much stronger mode and well positioned for 2010. The development of the overall demand for our products is encouraging. We achieved a strong increase of EBITA in the second half of 2009 compared with the same period in 2008. This positive achievement prompts me, at the beginning of this introduction to our annual report, to thank all our employees for their hard work and enthusiasm which delivered these results.

In 2009, there was a lower demand for feed in some regions, mainly for dairy cows and pigs related to the low milk and pig prices. Farmers quickly adjust to such situations by cost-saving measures, which led to a temporary reduction in animal feed purchases. Our premix and feed specialties business performed well. The fundamentals in the fish feed business are solid, showing strong growth in Norway. The growth in Norway largely compensated the decline in Chile. The demand for fish feed in Chile is reduced due to lower fish numbers as a consequence of the ISA disease in salmon farming. On a positive note measures being implemented by the leading fish farming companies and the Chilean authorities give us good reason to believe recovery is near. Our compound feed business in the Netherlands suffered a major loss at the beginning of the year and measures were taken that restored profitability. In Spain, our poultry business returned to profitability due to good poultry prices and lower feed costs.

New structure and Executive Board gives direct links from board to business. To ensure Nutreco is able to achieve its business ambitions, we implemented a new structure and extended the Executive Board. At the end of the second quarter we decided to structure Nutreco in three divisions. Each division represents a main responsibility area, namely feed premixes and specialties, feeds for aquaculture, and agriculture feeds and meat. These divisions are now managed by Executive Vice-Presidents, who are also members of the Executive Board.
Mr J.B. Steinemann, COO of Nutreco, left the company in June 2009 and is now CEO of Barry Callebaut. We would like to thank him for his inspiration and his valuable contribution to the company.
We would also like to thank Mr Y. Barbieux, whose term on our Supervisory Board and Remuneration Committee comes to an end with the General Meeting of Shareholders of 2010. He has brought wisdom and constructive advice to Nutreco throughout the 12 years of his appointment.

R&D an integral part of our businesses. At the same time, we made the Nutreco research part of the businesses. Being part of the divisions means the research teams will be earlier aware of market needs and sooner able to share technical know-how and innovative concepts. It will improve the ability of the division to drive growth through innovation and will enhance the support to our customers.

We are convinced that the new structure is an important step towards growing our global animal nutrition and fish feed business, creating value for all our stakeholders. Equally it will improve our ability to develop advanced feed solutions.
 
Acquisitions strengthen market positions. In 2009 we have strengthened our compound feed business in Spain and Portugal with the acquisition of the animal nutrition business from Cargill. This acquisition brings together the number one and three in the Spanish market for animal nutrition. Combining these businesses will create cost savings due to optimisation of production and logistics, and it will bring potential for plant specialisation.
In November we announced the acquisition of a 51% shareholding in Fri-Ribe, a Brazilian animal nutrition and fish feed company, bringing Nutreco a platform to facilitate its further expansion in Brazil. The acquisition perfectly fits in our growth strategy to strengthen our global market positions in feed specialties and fish feed and brings substantial scope for selling Nutreco’s feed specialties.
We will further develop our animal nutrition and fish feed business by organic growth and acquisitions, with a particular focus on growth in feed additives.

Doubling food production while halving the footprint. In the longer term, global demand for food is increasing as the global economy recovers and the population numbers continue to rise. There is a great challenge the world faces: producing sufficient food for a growing global population with a growing appetite. Incomes are rising as economies develop. With more money, people consume more protein as meat, fish, milk and eggs. We addressed this challenge directly in the fifth biennial Agri Vision conference that Nutreco organised in June. The main question during this multi-stakeholder conference was: will the world be able to feed and fuel nine billion people in 2050 in a sustainable way?

The sentiment in the conference was that innovation, backed by science and technology, is the key for future food security. Within that nutritional know-how, the ability to use alternative ingredients and to create sustainable feed products has become crucial. Nutreco has the essential experience, knowledge and innovative capabilities to do this. For example, we are exploring feed additives such as enzymes, antioxidants and organic acids to support the use of by-products from the food and biofuel industries in animal nutrition. Potentially feed additives can provide greater feed efficiencies and better animal health, and lessen impacts on the environment.
In 2010 Nutreco will publish its tenth Sustainability Report. For the first time, we will incorporate sustainability targets in the remuneration package of our managers, including clear targets to reduce the CO2 emissions of our operations by half in 2015. Sustainability is becoming a more important part of our business model.

The many initiatives we are involved in mean that Nutreco is heading into the future with confidence and inspiration. Our slogan ’Feeding the Future’ shows our ambition to have a leading role in developing advanced feed solutions and to grow our business as we do so. I am confident we are well on track to fulfil that ambition.

Wout Dekker, Chief Executive Officer
1 March 2010

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