e New HZPC structure generates growth TRADE AND MARKET I NG potatoes. This has been the routine for many years. What we earn abroad doesn’t go to the Dutch growers, but to the shareholders, the HZPC Association, which is a 100 percent shareholder of the holding company. Is the formation of the holding company perhaps the prelude to an initial public offering or the outright sale of HZPC to a multinational? HOLDING B.V. e, Netherlands HZPC RESEARCH B.V. Netherlands (100%) STET HOLLAND B.V. Netherlands (100%) NV BREEDERS TRuST. Brussels, Belgium (15%) SOLENTuM B.V. Netherlands (100%) HZPC AMERICAS CORP. Canada (100%) HZPC AMERICA LATINA S.A. Argentina (80%) HZPC LIMITED Hong Kong (100%) HZPC CHINA LIMITED Hong Kong (100%) SEMILLAS SZ S.A. Chile (20%) MAHINDRA HZPC PRIVATE LIMITED India (40%) FRIES4ALL B.V. Netherlands (33%) LA FLOR LIMITADA S.A. Chile (20%) EL MAINTéN LIMITADA S.A. Chile (20%) BEIjING HZPC AGRI - CuLTuRAL TECHNOLOGy CONSuLTANCy CO LTD. China (100%) STET POTATO uK B.V. United Kingdom (100%) STET FRANCE SARL. France (100%) D.S.S. OPSLAG B.V. Netherlands (50%) ‘No, certainly not. That’s absolutely not the intention. And that wouldn’t add anything right now, because we don’t really have a lack of liquid assets. Even if we should need extra money to set up new projects, there’ll be plenty of other ways to generate money. At this moment, we pay a large part of the profits as dividend. We could already easily create a quick opportunity to generate extra money by temporarily lowering the dividend distribution. Moreover, a loan would also easily provide extra money, for our company has a high solvency rate of 43.5 percent. Another method we could employ is the issuing of new certificates. None of these options are being considered, simply because there is no need. Generally speaking, not a great deal of money is needed in the world of seed potatoes. If you want to develop a new cropping area, you start on a small scale with local people. If the market grows, we don’t need to have large amounts of potatoes ourselves, nor do we need to buy land. It’s a completely different situation from the one a processing company has to deal with if it expands. He’ll already need millions of euros to build a new factory. That’s an entirely different dimension. Moreover, the seed potato sector is a branch of trade with high turnovers, major risks and small margins where the results can fluctuate wildly. Listed companies are not really keen on that. A game changer could be hybrid potatoes from seed. When this revolution actually takes place in 20 years’ time, the seed potato sector can eventually change into a world of seed. If that should happen, the big multinationals might become interested at a certain point. Right now, we need to work with reliable genetics, knowledge and time. Capital doesn’t head that list.’ Investing in genetics also requires a considerable capital, doesn’t it? ‘That’s right. During the sixteen years that HZPC has been existence, our budget for R&D has already quadrupled. This is due to all those shifts in the market. In the early years, HZPC Holland earned 95 percent of the turnover. Owing to the rapid growth in licence fees, we’ve become a completely different company. If we convert the licence turnover into tons, we traded 689,000 tons of seed potatoes last year. This means that we’ve doubled in fifteen years’ time and that the HZPC Holland seed potato pool currently contributes 50 percent towards the total turnover. In 2000, the gross profit margin, the difference between the sales price and the direct costs was still 25 million euros. This year, we’ve nearly reached 50 million and this growth must be continued. At this moment, approximately 16 to 17 percent of the gross profit margin goes to R&D, and the division employs 21 of the total staff. This could well Potato World 2017 • number 1 7 Pagina 6
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