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2 Changes in the Environment that made the Bazancourt-Pomacle Biorefinery 49

Cooperatives also fund themselves by loans, on which the interest payments
are tax deductible.
– The principles on which cooperatives are managed facilitate access to finance
from funders seeking projects that will be profitable in the long-term. Indeed,
funders who are averse to risk often pay great attention to long-term projects,
since the benefits are less volatile and reduce the amount of risk taken in
different projects. Cooperative managers are expected to take decisions to
maintain the productive capital and maintain the firm’s activity for future
generations rather than take into account market pressures.
– The principle of inter-cooperative cooperation can also be a significant lever to
obtain funding. The mutual guarantees undertaken by vertically linked
cooperatives can reduce funding needs for commercial operations.

Cooperatives capable of raising sufficient funds to ensure their growth and
develop their competitiveness by increasing their operational efficiency can make
the most of these opportunities.

Challenges and Opportunities of the Bazancourt-Pomacle Biorefinery
Cooperative Business Model
In structural terms, the firms present on the Bazancourt-Pomacle site have impor-
tant needs (c.f. supra Fig. 2.13).
The firms are characterised by intensive capital requirements. Their capital
expenditure is high because of the need to purchase and maintain costly, customised
equipment. The number of innovative industrial-scale projects that emerge is not
high, but their implementation, and the various stages required to increase progres-
sively in scale require significant investment (Fig. 2.15).
The cooperatives and the firms present on the Bazancourt-Pomacle site have
limited financial means because of the reduction in public financial support and also
because of the volatility of raw material prices.
Their working capital requirement is also high, due to the seasonality of their
activity directly related to the sugar beet and wheat harvests and short supplier
payment times.
The Bazancourt-Pomacle Biorefinery has many new challenges to face, with
firms globally tending to increase in size through mergers and acquisitions, 41 the
development of the value chain upstream and downstream of processing, including
R&D (c.f. Fig. 2.16) and the need for increased internationalisation to access new
markets.
The example of the creation of CRISTANOL is interesting, because it illustrates
both the structural requirements of actors on the site (significant capital expendi-
ture, limited funding sources) and the new challenges encountered (need to unite
the actors in a union of cooperatives, diversification and development of the value
chain upstream of processing and the possibility of exporting production all over

41
For example, the acquisition of the sugar group Vermandoise by Cristal Union in 2011.