'Convincing growers with good results'

Emsland Stärke, the German starch potato processor with a large factory in Emlichheim – just across the border from Emmen – is forced to adjust its basic price again. to increase this year. Emsland Group has had a great year. Due to the significant shrinkage of the European starch industry, a demand market has been created, from which the company is reaping the benefits. There is a clear strategy to maintain the area, and preferably to expand it slightly. It is developing this in close consultation with the owners. They are united in a cooperative growers' organisation. This Erzeugergemeinschaft (EZG) is by far the largest shareholder of the group.

Boerenbusiness spoke with CEO Gerrit-Jan Wesselink and Lambert Vette, chairman of the EZG and himself a potato grower in Germany, about the opportunities and challenges facing the company.

The name of your growers' organization is on the office building. Does this mean they are the owner?
LV: “That's right. The EZG owns the majority of the shares of Emsland Group. The company pays out dividends on these shares. In total, this amounts to approximately €30 million in dividends over the past ten years. The EZG chooses to pay out part of it to its members, part of it is retained as a strategic reserve, part of it is invested and part of it we have invested in the construction of this new office building. Emsland rents most of it from us, because as a growers' organization we don't need that much space."

So Emsland Group is in fact a guest of its own growers?
GJW: "Indeed, that's how you can see it. Both organisations find it very important that growers have easy access to the company's organisation. You enter here as a grower and can have direct personal contact with the employees of the raw material purchasing department. This also applies if you contact us by telephone or otherwise. No unnecessary barriers or multiple layers of people. We find that a great asset and it ensures that we remain very close to our growers. In this way, management keeps in touch with the growers and the shop floor in the factory. That is also what the growers expect from us: knowing what is going on with them and what is happening in the field."

That sounds quite different from how things work in some Dutch cooperatives?
LV: "We also have Dutch growers, who are also members of the EZG. Emsland Stärke farmers have a different approach to our model, which works cooperatively. Growers are very involved and have an emotional bond with the company. That has also developed historically. We see it as our strength. For a Dutch person, that takes some getting used to, but they also appreciate the involvement."

Emsland Group has had a great year, with significantly higher turnover and profit. How is the starch market doing?
GJW: "We have seen a significant decline year-on-year across Europe. In France, for example, but also in parts of Germany. The demand for products remains relatively positive, which means that the market is healthy in most fields at the moment. In Denmark and Poland, you do see cultivation expanding, but the competition with other potato segments is high here. Last year, we did everything we could to increase our area slightly, which was difficult to achieve. When you see in retrospect that we remain stable in a shrinking market, then there is a positive note to be drawn from that."

To stay with 2024 for a moment. How did that season go?
LV: "Last growing year also had many challenges. In total, more than 1.000 millimeters of precipitation fell again, although it was somewhat better distributed compared to 2023. Then we got a lot of water during the harvest. Fortunately, not last autumn, which made the harvesting go better."

Does the strategy remain focused on growth?
GJW: "We are working hard on innovation and, in some segments, expanding capacity here in Emlichheim. The basic process of starch processing is being renewed in parts. There will also be a new logistics centre. We are also renovating at some other locations in Germany. For example, flake production at the Hagenow location has doubled in the last five years. In terms of area, we are trying to keep this at least the same and preferably grow a little. Initially, that seemed like a challenge, given the competition from the French fry industry, but that mood has now changed. As a result, we are noticing more interest among growers. Particularly in flake and granulate potatoes."

In the area around Emlichheim there are already a lot of potatoes and the competition from other crops is great. Shouldn't you then focus on another region?
GJW: "It is true that in East Germany, for example, there is theoretically much more land available. There are mostly large agricultural companies with a cereal cultivation plan. Our experience is that these companies in particular do not simply start growing potatoes. The willingness of an existing grower to grow more hectares is greater than to let a new grower start. It requires a substantial initial investment and the risks are great. That is why we also need more area here."

Do you have to compete with the arrival of more French fries potatoes?
LV: "The strong demand for French fry potatoes in recent years has indeed had a major impact. We also see that in this area, where it is technically possible. Not all soils are suitable for growing French fry potatoes. Moreover, storage is a completely different story than with starch potatoes. With the realised payment prices in the last two years - which can rise to over €200 per ton - we think that starch and flake potatoes will remain interesting for growers."

How do you assess the international market for starch products?
GJW: "The market for potato flakes has been growing steadily in recent years. Emsland Food has grown with it. However, we are now noticing that the market is also currently marking time. In starch, we intend not to focus on bulk products, but on high-quality products. The market remains stable in that segment. We must remain competitive in the global market and do our best for the customer and the grower."