THE EUROPEAN STARCH INDUSTRY ASSOCIATION -

AAF AND ITS EU PUBLIC AFFAIRS PRIORITIES

Jamie Fortescue – Managing Director27 June 2012

Key figures*

Processing 22 million tons of raw materials(i.e. 15 million tons of cereals and 7 million tons of

starch potatoes)

9,9 million tons of starch products

24 companies - 69 plants

€7,7 billion total annual turnover

14 400 direct jobs

€860 million investment in Europe, with R&D of €104 million

* 2010 data except last line 2008-2010

AAF MEMBERS HAVE PRODUCTION

FACILITIES IN 21 OUT OF 27

EUROPEAN UNION MEMBER STATES

Legend:

Producing Member States

Non-starch producer

Non-EU member

Members’ location

Legend:

- 12 companies producing cereal based starch products

- 9 companies producing potato starch

- (*) 3 companies produce both cereals and potato starches

24 COMPANIES

AAF’s membership

Full Members

- Agrana Stärke (*)- AKV Landholt- Altia Corporation- Amilina- Avebe Group- Beneo Remy- Cargill- Chamtor- Copam- Crespel & Deiters- Emsland Stärke- Finnamyl- Hermann Kröner- Hungrana- Jäckering- Kartoffelmelcentralen- National Starch & Chemical- Roquette Frères (*)

- Skrobany Pelhrimov- Südstärke- Sveriges Stärkelseproucenter

Förening-Lyckeby Stärkelsen- Tereos Syral (*)- Tate & Lyle- Wielkopolskie Przedsiebiorstwo

Przemyslu Ziemniaczanego (WPPZ)

Associate Members:

- British Starch Industry Association- Czech Starch Association- Fachverband der Stärke Industrie- Finnish Starch Manufacturers

Association- Humaiz (Spain)- USIPA (France)- VNFG (The Netherlands)

Processed raw materials

Starch products in starch equivalent

Total : 22 Mio tons Total : 9,9 Mio tons

Starch production in the EU – 2010

WheatPotatoes

Maize

PotatoesWheat

Maize

31,7% 34,3%

34%

38,3%14,2%

47,5%

Total Market : 9 mio tons in 2010

* Excluding co-products amounting to about 5 million tonnes

6%31%

29%1%

29%

Applications of starch and starch derivatives (EU market segments - 2010)

Confectionary and drinks

Processed foodFeed*

Corrugating and paper making

Pharma. and chemicals Other non-food

4%

AAF public affairs priorities

• Opportunities– End of EU sugar regime– Bio-economy– HLF on food supply chain

• Threats– EU food/feed/environment law compliance costs– International competition– Potato starch

Opportunity -EU sugar quotas

• Isoglucose – 5% of sugar quota equating to 690,000 tonnes

• Full support to proposal to end quota in 2015• Potential of 2-3 million tonnes in EU quota

free market• But no investment without certainty on

timeline

Opportunity - Bio-economy

• Established sector in replacing fossil-fuel components with renewable agricultural raw materials

• Strong supporter of ‘Europe 2020’, ‘lead market initiative’, ‘Commission Communication on bio-economy’

• Active support and participation in CEN work• EU has R&D knowledge base and other good

foundations• Need to turn political support into concrete action or

miss out, e.g CAP 2020

Opportunity - HLF

• Supporter of the dialogue and the HLF recommendations

• Not member but through PFP registered stakeholder in B2B and competitiveness groups

• Keen interest in what concrete next steps are expected

Threat – compliance costs

• Food/feed law– Pesticides– processing aids – mycotoxins– additives– labelling – GM

• Environment costs– ETS– REACH

Threat – international competition

• ASEAN– Thailand – 2 million tonnes of tapioca starch p.a; government subsidised and particular

threat to potato starch and bio-economy• Mercosur

– Brazil – 1.8 million tonnes of starch p.a (cereals and tapioca); sugar cane in polyols; 100 million Euro investments planned

• India– 5th largest grower of tapioca, overproduction of polyols, subsidised starch industry

• China– Anti dumping/subsidy case – EU potat starch

• EU/US HLG– massive economies of scale for US corn starch

• Rules of origin• Customs duties needed to preserve EU competiveness

Threat – potato starch

• End to EU support in July 2012• Likely 40% decline in market• Industry accepts end to EU support (as should

sugar industry in sugar market !)• Any future recoupled Member State support

must not distort fair competition in the EU

Thank you for your attention

Any questions?