Bas Alblas: 'Frites war worries us'

Bas Alblas, the CEO of French fries producer Lamb Weston, was a guest at BNR Nieuwsradio on Tuesday 22 January. Among other things, the anti-dumping measures affecting the sector were discussed.

Alblas has enough reason to be positive about Lamb Weston's future prospects. “Globally, French fries consumption is growing at an annual rate of 3% to 4%,” says Alblas. "In an emerging market (such as China) this percentage is even higher. The growth in Europe is lower, but in terms of absolute volume this is a very large market. This makes the growth worth mentioning. Europeans eat out more often and that is where chips belong. Bee."

joint ventures
Lamb Weston is active through joint ventures in countries such as Russia and China. This has everything to do with the fact that the border crossings pose a danger to the supply of product. "A border can be closed, that is a risk for the buyer," the CEO outlines. "However, the biggest risk is the supply of raw materials. You must have sufficient suitable acreage for potato cultivation in such a country. Before you are that far, and have built a factory, you are 7 years further."

An example of the fragile borders is the current situation in Central and South America. The word 'fries war' is used when it comes to anti-dumping and sky-high levies. This worries Alblas: "Our belief is that the world economy, and therefore the consumer, benefits from open markets. Anti-dumping is purely framing, because nothing is dumped. It is simply cheaper to import than to grow locally. we market forces."

Domino effect
"You see that trade flows are diverted by such practices," he continues. "Europe no longer supplies Russia, so Brazil does that. We supply Brazil again. At the bottom, it is becoming more and more expensive for consumers. European ministers should be more involved in this. To start with, by combating fake news with facts. "The underpinnings of South American countries are simply not correct. The European Union (EU) should make a point of that. We must continue to advocate free trade, otherwise the world will lock up. It is a domino effect."

The global company has more challenges ahead. Such is the case with Brexit. "Not only does the United Kingdom (UK) account for 30% of European consumption, it cannot meet this need itself. Especially in the UK, consumers will soon be presented with the bill, especially if it turns out to be a hard Brexit . That's a real scenario."

The production location in Wisbech, England, will remain, but that may not have been said about the European headquarters. It is now located at the factory in Kruiningen in Zeeland. The company also has a location in Bergen op Zoom and Broekhuizenvorst. "The main question is whether we can get enough staff. It is difficult where we are now," says Alblas. "That is why a study has been started to find the ideal location. We will certainly take the interests of the current employees into account. Next week (end of January) the employees will be presented with the results of this study."

Stable potato price
Lamb Weston's customers benefit from stable prices. Unstable borders, currency fluctuations and fluctuating potato prices threaten stability. "We make long-term fixed price agreements with suppliers. That is why we benefit from a raw material price that fluctuates as little as possible. The fluctuations in the cost price result in less return, which means that we can invest less in sustainable resources. There is a continuous game going on between the business economic situation and sustainability. I am convinced that these 2 things can go hand in hand with hard work."

The company has more investment in the pipeline. For example, it is investing in an installation that collects dissolved starch, which is released when cutting potatoes. This starch normally goes away with the waste water, but will later be recycled and dried. Thereafter, the starch can serve as an ingredient for various products. It works together with neighbor Wiskerke Onions to use the residual heat from the French fries production when drying onions. In this way it tries to work sustainably.

Solar panels
However, putting solar panels on valuable agricultural land is not considered ideal by Alblas. "Good agricultural land, on which potatoes can be grown, is scarce. I do see opportunities for solar parks, but then on vacant land or land that is unsuitable for the agricultural sector. You lay such a park for 20 to 25 years. During that period so no crops can be used on it."

In his own words, Alblas lacks national direction: "There is no clear policy from the government. You see all kinds of local initiatives emerging and I am concerned about that. There is still a lot of space available on various roofs."

Niels van der Boom

Niels van der Boom is a senior market specialist for arable crops at DCA Market Intelligence. He mainly makes analyses and market updates about the potato market. In columns he shares his sharp view on the arable sector and technology.

n.vanderboom@boerenbusiness. Nl

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