The financial year 2019/2020 is a year to remember. 2020 will enter the history books as the year of COVID-19 or the coronavirus. What began with a contamination centred in Wuhan, China, developed into a global pandemic.

The corona crisis has affected everyone, including HZPC. The impact of the results from 2019-2020 is manageable by HZPC. By the time lock-down was implemented across many countries in mid-March, sales of our seed potatoes had been largely finalised. Distribution, however, required a greater focus. As a result of import limitations across many countries and a lack of containers, it was difficult to transport seed potatoes to all of our destination countries. Luckily, the transport of foodstuffs, and also seed potatoes, was excluded from many of the corresponding restrictions.

The lock-down had a huge impact on the food service industry and is still affecting sales of potatoes for fries. Fries factories still have substantial stock-holdings and this has led to the cancellation of seed potato orders for the 2020 harvest. Sales of potatoes for fries will increase in the coming period but it will be some time before we return to the levels of 2019.

In the next two to four years we expect to have to face a global economic recession. This recession will be more keenly felt in less prosperous countries. These countries will see consequences in terms of expected decreases in visiting tourists and/or a reductions in exports. As a result, they may not buy the same quantities of seed potatoes as in previous years; despite the fact that the demand for healthy food will, of course, stay the same. We can only hope that the economy recovers and we will do all we can to support the various efforts.

Aside from the corona crisis, it has been a good year for potatoes. The potato season began with a few challenges. The pressure from viruses meant it took a while before we knew what categories of seed potatoes we could sell. We are very proud that, despite this delayed start, we have been able to sell our seed potatoes for a good price. Potatoes were being shipped until late in the season.

The demand from North Africa and the Middle East remained low to begin with, but recovered later on and ultimately business was encouraging. In Europe, the varieties for the fresh market performed exceptionally well. The corona crisis triggered an increase in the consumption of fresh potatoes. This entire region is a stable market.

Our growth markets tend to lie outside ‘great Europe’. We have identified huge opportunities in Asia, and also India, where we are working in a joint venture called Mahindra-HZPC. This allows us to produce and sell our seed potatoes in this country and the first exports to nearby countries have now also been planned. In Russia and China, we have invested in our own production locations for tissue plants and mini-tubers so that we can gain a foot on the ground in these countries too. In North America, we have quite literally put the potato on the map with tasty varieties and innovative products. In Eastern and Central Africa, we are developing our hybrid potato varieties, enabling us to support a healthy and sustainable diet in these countries.

We believe that we should always offer our growers a good price and expert guidance. It is crystal clear that we can only retain our leading position in the global market if we have growers of the highest calibre, who grow top quality products. We also allow our growers to share in the profits of our international growth and we are realising this via our Connecting Growers programme, whereby share certificates are given to active seed potato growers.

Looking to the future is tricky in a time of huge uncertainties and change. The coronavirus has created new challenges and new working methods. Working from home has become the norm and travel is practically impossible. As a result, development work has encountered delays. Our specialists were unable to plant out all trial fields and some selections were subsequently not made. This delay cannot be expressed as a monetary value, but it does have an impact.

The corona crisis has also emphasised just how important it is to have a safe, sustainable and secure food supply. Food security for everyone is our driving force, no matter where you are in the world. This has gained another dimension in view of the crisis.

I would like to say a huge thank you to all our employees, growers, distributors, and partners. Despite the limitations and uncertainty, they have done all they can to support and implement our ‘keeps you growing’ philosophy during the crisis. In this annual report, we will travel along the chain and explain how we realise this growth.

I hope you enjoy the journey.

Gerard Backx, CEO HZPC
Joure, 1 October 2020