Seed potato harvest 2014 was as expected in most regions.
Exceptions were for instance France, where the yield per hectare was higher than other years. Because sales in Europe were lower than expected, a lot of seed potatoes were sold as ware potatoes and cattle feed at very low prices. This impacted some production countries more than others, but overall this has had a negative effect on the result of HZPC seed potato growers and the result of HZPC as a whole. The type of production contracts that growers have varies per country. Thus in some regions the income of the growers was affected more heavily, while in other areas HZPC’s results were influenced negatively.
Huchette - Cap Gris-Nez in France is strong in the smaller fast-cooking potato, so-called ‘Chaire Ferme’ segment. Turnover in this segment over the last fifteen years has made a particularly strong contribution to our company’s results. However, this year demand for seed potatoes in this segment fell sharply, with major implications for HZPC. The expectation is that there will not be enough of these potatoes grown in 2015 to be able to meet demand. This would then result in a market correction.
Also the American market was not as beneficial as the year before. The market in North Africa however, was once again good and comparable to previous years. In the Middle East HZPC has been able to maintain its sales over the past year, but conditions were difficult in those areas where there is political instability. HZPC is delighted that in these areas we have still been able to deliver seed potatoes for local growers to continue to produce food.
“In the Middle East HZPC has been able to maintain its sales over the past year.”
In 2014/15 Russia temporarily opened its borders again for seed potatoes from Europe, as they had done in 2013/14. The terms put forward by Russia, however, are very restrictive. HZPC supplied Russia from Finland and the Netherlands; but Russia is striving to achieve self-sufficiency. HZPC is forced by the Russian government to propagate local multiplication from the first generation. This isn’t easy. The burden of disease in Russia is great. HZPC is taking steps to investigate possiblities for increased local production. The Russian market represents a realtively small proportion of HZPC’s total turnover. For Finnish HZPC seed potato growers however, the possiblitiy to supply Russia from the EU is a key factor influencing their sales price.
HZPC operated as a minority partner in the joint venture Mahindra-HZPC in India for the full financial year 2014/15. This company has achieved a small positive result in the first year. Although the financial results are modest, HZPC is more than pleased that it was indeed positive in the first year. In accordance with the business plan, we have started building a facility for the production of minitubers in India. This investment will continue in 2015/16 to give effect to our local growth strategy. For now, Mahindra-HZPC uses free varieties because the commercial approval of HZPC varieties is not yet finalised. This process is expected to take at least five years.
“HZPC is more than pleased that it was indeed positive in the first year”