30% increase in turnover
Record result for Agrico due to seed potato trade
On Wednesday 20 December, seed potato trading house Agrico presented its best financial result ever during the central members' meeting. Never before has the company sold such a huge amount of seed potatoes, which resulted in a 30% increase in turnover.
The 2016/2017 financial year is one of the most successful years for Agrico in the 1-year history of the cooperative. Never before has such a large amount of seed potatoes been sold. Also, never before has so much money been paid out to members for seed and consumption potatoes.
30
percent
Seed the engine
The consolidated turnover, the combined results of the parent and subsidiaries, is 30% higher: at €289 million. That is an increase of €20 million compared to the 2015/2016 financial year.
The increase in turnover is entirely due to the seed potatoes product group, Agrico announced in a press release. Demand for Agrico varieties was good in all sales areas. The growth of the processing industry has partly led to the record result.
Amount withheld
The cooperative has chosen to pay out almost all of its payout capacity to its members. Instead of strengthening equity, Agrico withheld an amount from the first payment that was used as a deposit on a subordinated loan. In this way, the guaranteed capital can be increased by more than €2 million. A bank loan has been taken out for a number of investments, including the breeding company.
Boost through consumption sector
"Financial year 2016/2017 is one to list", writes general manager Jan van Hoogen in the foreword of the annual report. "Good prices for ware potatoes gave the seed potato market a huge boost. Table potatoes could be sold easily. The result of the organic potatoes was reasonably good. The discussion about growth cracks, after a request from Agrico and the Vavi, caused a lot of noise. We still regret that this caused a lot of commotion in the sector."
New techniques
Van Hoogen mentions the construction of a new greenhouse complex at the nursery as one of the highlights. The new building is expected to be completed by the end of 1. As an extension of the breeding activities, the director also touches on the commotion surrounding the subject of potato seed. "This has been in the news a lot. Unfortunately, the reporting was one-sided. We believe that the perspectives outlined will only be available in the long term. Agrico follows developments closely. New techniques are in the spotlight. to much discussion in Europe. We believe that there must be sufficient certainty, social and political acceptance to deploy these techniques."
Investments with ups and downs
Proposed investments at potato trading company Leo de Kock have been postponed, but will be discussed further in the 2017/2018 financial year. In the past financial year, plans were developed for a new quality center to assess test and quality samples. This is where investments are made.
Things didn't go as well in Kenya, where all seed potatoes were rejected. This also applies to the subsidiary Cartof Agrico in Romania. The sale of packaged potatoes proved unsuccessful. With the end of the 2016 harvest year, it was decided to stop the activities and to sell the company.
Industry stable
Agrico does not have the illusion that the 2017-2018 season can match the current result. This is due to the price level of consumption potatoes in Europe. This has an impact on the sales of seed potatoes in important growing areas. An exception to this rule is the sale of seed potatoes to the processing industry. Growth is stable here. This is expected to remain the case in the 2017-2018 season. Sales to overseas destinations are following a normal pattern, despite instability and economic developments.
Seed crop 2017 is abundant. The seed potatoes are especially coarse. Agrico considers it a challenge to realize a good payment, due to the great diversity of supply and demand.
Niels van der Boom
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