Seed potato company HZPC reports on positives after challenging COVID-19 year

Dutch seed potato company HZPC realized that the financial year 2020/2021 would be difficult. Last year, the potato distributor was operating in a global economic recession. With enormous consequences for both multiple corporate sectors and for HZPC. However, there are always positives. Even now.

Gerard Backx, CEO of HZPC:
 

"We have seen a rise in volume sales, we are proud to have started the Connective Growers program and we are delighted with the efforts made to realize a competitive price for our growers."

On 7 October 2021, the Supervisory Board at HZPC Holding B.V. discussed the accounts for the 2020/21 financial year. On the same day, the general meeting of shareholders adopted the annual accounts. The turnover of HZPC amounted to EUR 312 million (about USD 361 million), compared to EUR 360 million (about USD 416 million) for the previous year.

The dividend payment remained the same, at EUR 1 per share; the consequence of a lower operating result. Despite turnover having been reduced and the dividend payment has remained the same, they have, however, seen sales increase.

Growth in tonnage

In the year 2019/2020, they sold 892,000 tons of seed potatoes either directly or via licenses. In the past year, 2020/2021, they crossed a new boundary. This resulted in overall sales of 904,000 tons of seed potatoes.

This growth in tons primarily took place outside Europe, in America and Asia. The margins on these extra tons, however, failed to compensate for the substantial reduction in the margin that HZPC suffered in the Netherlands and France, as a result of much lower sales to the fries industry and a number of significant export countries, including Algeria.
 Operating result

The company’s after-tax result comes out at EUR 0 million. This was EUR 1.2 million (about USD 1,38 million) last year. The same result could have been realized in 2020/2021 had they decided against starting up the Connecting Growers program.

This cost EUR 1.35 million (about USD 1.56 million) in 2020/2021. With this program, they have bought certificates which have then been distributed to 70% of their active growers in the European Union.

From growers, for growers

The success of HZPC equates to success for their growers. They believe it is extremely important for HZPC certificates to be held by active growers. Through Connecting Growers, we aim to ensure their loyalty and allow them to benefit from developments within HZPC.

This program has led to a significant increase in the number of certificate holders. As well as the success of the Connecting Growers program, and despite the many challenges faced by the company, it says it is delighted with the efforts that have been made to realize competitive prices for growers.

Future perspective

Gerard Backx:
 

"We are focussed on growth. Although this process has been hindered over the past year, nothing is broken. HZPC did have to implement re-organization at several locations within the organization and this has unfortunately impacted the number of available workplaces."

"It is hard when you have to make decisions you would rather not make. Thanks to the robust foundations of the organization, however, we were able to limit this as much as possible but it does not detract from the fact that we would have rather found ourselves in a different situation."

"Luckily, HZPC has a healthy foundation. Furthermore, our presence in many countries has actually been strengthened over the past year, as have product packages and interesting projects."

"A great example of this is the recently presented Even Greener, a selection of sustainable varieties with a lower impact on the environment."

"Thanks to these positives and the energy that we feel within the company, we can move towards the future with confidence towards further growth."