Interview Hans van Hagen
Numidia sees dairy production shifting
Dairy trader Numidia is a fast grower; the number 3 in the Netherlands and, according to CEO Han van Hagen, also in the world. He talks about the ambitions of the company, about the importance of trade in the dairy industry and about developments in the industry.
Last year, Numidia posted a turnover of €939 million, compared to €894 million in the previous year. These are impressive figures for a company that was founded just over eleven years ago.
The initiator of that time, Aziz Mahnin, will never have thought that…
Van Hagen laughs: "Aziz says yes. It is certainly a great achievement. Moreover, we are still one of the fastest growers in the Netherlands."
What is the next step?
Van Hagen laughs again: "Up to the number 2 position within five years. Well, at least we want to keep up the pace."
Dairy farming and the dairy sector are also in full swing, in terms of prices and supply and demand. Europe and New Zealand are among the most important production and export regions, but they are also under pressure. What is your expectation for the coming decades?
"We expect that around 2050, when there will be 9,5 billion people on the planet, Eastern Europe and the United States will be the main exporters of dairy. I also said this in a panel discussion at the umbrella organization of the European dairy trade ( Eucolait) in Brussels. I think there are still opportunities in those regions, where all kinds of borders loom elsewhere."
Is a large part of global dairy production traded?
"Available figures show that approximately 91% of all dairy is consumed locally (and sold by processors through retail), while 9% of all volume is traded. The trade is sometimes criticized, but adds value by buying in areas where it can be produced most efficiently and brought to areas where there is a shortage of dairy. We also buy and sell product when others don't and keep trade going."
The dairy market has had to deal with major price fluctuations in recent years. In 2022 prices suddenly shot up enormously, now they have plummeted again. How do you deal with that?"Risk management is becoming increasingly important. Trading companies must closely monitor their capital position, hedge risks with the help of financial derivatives and closely monitor market developments. We are increasingly using artificial intelligence for the latter."
Is the derivatives trade in dairy really taking off?
"Not really yet. There is one derivative contract for every two dairy contracts. If you compare that to the sugar sector, it is almost nothing. There are a hundred derivative contracts for one physical contract. So there is still room for development."
Numida salutes loudly, as noted. How come you grow so fast?
"There are several factors responsible for this. We give individual traders a lot of room to develop themselves. We think that is very important. I strongly believe in reverse accountability, that as a manager I try to give my employees everything they need to do their job. We have always allowed our back office to grow with it, so that it remained in balance with what the traders concluded in terms of business. Our mission is to be the best and most sustainable partner for the companies we do business with. we ensure that our risk management is very well organized and certified in such a way that our partners are fully relieved. What also helps us in terms of efficiency is that we have one order book worldwide. This provides maximum insight and ensures that our people do not have to trade with each other "
Another question about durability. How do you shape this as a trading company?
"In 2018, we were the first dairy trader to measure our own CO2 emissions and those of all transports and storage that we arrange for customers. Since 2019, we have voluntarily offset all these emissions associated with our trading activities. In addition, we have an extensive policy to reduce these CO2 emissions"
Numidia has offices all over the world. This means that you also do business with the most important dairy companies in the world.
"We do business with more than 80% of the companies in Rabobank's global dairy top 20 and with many other companies."
Are you and will you remain active only in dairy? After all, you already trade in dairy with plant-based ingredients, such as fat-filled milk powder?
"Yes, I think so. By the way, we cannot say fat filled milk powder, but we have to call it fat filled powder, because it is a product that does not only come from milk. We do look at 'milk' without a cow with great interest , a product that is made using fermentation. That could really take off. Otherwise, we see the demand for dairy on a global level only increasing, by about 1,5% to 2% per year. Many people may not think about it in the Netherlands, but in many places in the world it is still the case that, when consumers achieve a slightly higher level of prosperity, dairy products are still used, at the expense of plant-based products".
Klaas van der Horst
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