PW CONFERENCE Joop Wijn, ABN AMRO: ‘Entrepreneurs who have already zoomed in on innovation, those are the ones that can keep going.’ COMPETITION BASED ONLY ON EFFICIENCY AND COST SAVING WILL LEAD TO DEGRADATION. After a detailed explanation about how ‘ our bank’, ABN AMRO, is doing in this time of crisis, Joop Wijn focused his speech on the potato sector. Wijn, known from his former positions as the Dutch State Secretary of both Finance and Economic Affairs and as Minister of Economic Affairs, spoke on this day as SME director of a state bank. He started his talk with a frequently asked question: ‘Do Western banks grant entrepreneurs enough credit?’ The word ‘credit’ is derived from the Latin word ‘credo’, which means faith, is how the ABN top man anwered his own question. This is what the provision of loans is really all about: do you have faith, confidence in the person to whom you lend your money? For how long will you continue providing support? When, in the present dire circumstances, businesses get into financial difficulties, the banks are mainly concerned with the question: for how long are we going to support this company? Even if, for you – as a bank – times are not entirely rosy, economically-speaking it is always important that companies get supported for as long as possible, is Wine’s absolute conviction. Experience teaches us that an enforced stop is economically not always the best. Banks know this and the stimulus to continue providing credit will therefore always be greater than the stimulus to stop, is Wijn’s experience. What you see now, though, is that banks focus more on the man. Account managers are more focused now on ‘man plus plan’ and less on computer figures. ‘Entrepreneurs who have already zoomed in on innovation, those are the ones that can keep going.’ Proper education also counts. I can think of a seed potato grower I know, for example, who has invested wisely in GPS. He is an entrepreneur who always has his mind on innovation. As a bank, you can have faith in such a man.’ According to Wijn, long-term financing in the agricultural sector provides banks with a more favourable profile anyway. ‘Agricultural businesses have a lot of equity and they are still characterised as entrepreneurial families.’ Supermarkets dictate the price Another story is the current market price saga. As one of the biggest dangers for the potato sector, the ABN top man points to the retail market: ‘supermarkets dictate the price.’ The price wars we have seen in recent years are, according to Wijn, the worst thing that could have happened to the food sector. Not only the primary sector and the trade were hit, but also the supermarkets themselves. To prove this remark, Wijn produces a few results from recent British research by strategy consultant OC & C. ‘The costs of the production of food rose by 23 percent in 2008, while food inflation (price rise on the shop floor) was only 6 percent. Consequently, retailers such as the manufacturers have tried to keep the price for the consumer as low as possible. The costs were borne by both: according to the researchers, the supermarkets have lost 0.1 percent of their margin and the agrifood business 1.6 percent. OC & C further expects that the loss of margin will be even greater for the smaller agrifood businesses.’ The consequences of this behaviour by the supermarkets will be severe, according to Wijn. ‘In this economic tide, the market is naturally being hit, but the real damage to yield and margins is the result of the battle that is initiKees van Arendonk, NAO: “The entrepreneurs in the sector currently don’t have a lot of financial headroom for innovations.” 10 Potato World 2010 • number 1 Pagina 9
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