Mainly industry
"We strive to convey an image of accuracy and reliability to growers when handling a deal and payment and I think that is what has helped us to continue growing. When we contract a grower we do not want to lose him through our manner of working. We want it to work well on both sides and that trust is valued by growers. Growth does differ per year. Naturally you want to grow, but that is not the case every year and depends on the harvest. The turnover in our branch doesn't always tell the full story. From a tonnage of 50,000, 35,000 is destined for processing. The remainder is export, but the export destinations change from year to year, dependant on successful or failed harvest and underlying prices. For example, take the Czech republic, we have delivered there for the last five seasons, but it is not a fixed line."
Industry
"Deliveries to processing grow every year. Belgium has really become industrialised and in the next decade I expect that to only increase. We, at Bruwier, have hung our cart on the processing industry and they have pulled us along. Everybody is pulled in by the growth in the Belgian potato industry. The only thing that hinders growth in processing is contract work. A large part of the sales contract is already fixed for the season. For both the factory and the grower contracts provide a guarantee, but for us traders, sat in between it is another matter, and not without risk because of the duty of delivery. If a crop fails it can be very expensive to go shopping and that makes things difficult." This aspect only hinders Jan a little at Bruwier Potatoes. "It is our deliberate choice to limit tonnage contracts with processing. It is purely a risk consideration. If our customers want to close more contracts with us at a fixed price, we do not say no, but there will be other requirements. There are no solid plans but the raw materials are there for growth, so what is not possible today may well be possible tomorrow."
The team from Bruwier
"The use of fresh potatoes decreases every year and the processing section rises. We have followed this evolution," explained John. "We used to talk of shipments to Tunisia and Algeria, which came back every year, but that is no longer the case. The last decade has evolved and I see that continuing further. The whole sector has followed. For example, you see the contract prices getting better every year because more product is required by the sector for growth so people want to keep it interesting so the grower continues to supply potatoes."
No threat
Is it a concern that the processing industry is increasing? "No, not for us. The situation 7 or 8 years ago as a trader was much more uncertain. This was due to the tendency for the processor to go directly to the grower and the trade was pushed aside. Every trader will then have been questioning their business. Whereas now, because of the greater need this doesn't always happen through just the grower or trader. It is a one on one story and that will not change in the future. In many cases growers prefer to work with the trade. If there is a quality problem, the trader will seek and find an alternative solution. For processors it's not that simple."
Export
"It is difficult to say how the season is going to run. There has been a lot of talk about a possible shortage and big prices, but I attach little credence to this. We see what is has come out of the ground and that is better than everybody expected. In September there was a serious growth spurt but everyone only seems to be thinking about the Summer figures and not considering September. There is a tendency for growers to give market information and I understand that, but they should give the right information and that does not always happen." For this season Jan expects several small customers for exports. "I don't expect to have any really large customers in between. What I do find dangerous about this season is that many believe there will be better prices in the New Year. There are potatoes in storage in West Europe and I think that few will be made available before the end of the calendar year. The packet is the same but the time is shorter. We exported some to Central Europe but not everything was taken. A portion was taken by our customers and put into refrigerated warehouses and will only be sold here when the market is better. That is perhaps more dangerous."
Industry
"Deliveries to processing grow every year. Belgium has really become industrialised and in the next decade I expect that to only increase. We, at Bruwier, have hung our cart on the processing industry and they have pulled us along. Everybody is pulled in by the growth in the Belgian potato industry. The only thing that hinders growth in processing is contract work. A large part of the sales contract is already fixed for the season. For both the factory and the grower contracts provide a guarantee, but for us traders, sat in between it is another matter, and not without risk because of the duty of delivery. If a crop fails it can be very expensive to go shopping and that makes things difficult." This aspect only hinders Jan a little at Bruwier Potatoes. "It is our deliberate choice to limit tonnage contracts with processing. It is purely a risk consideration. If our customers want to close more contracts with us at a fixed price, we do not say no, but there will be other requirements. There are no solid plans but the raw materials are there for growth, so what is not possible today may well be possible tomorrow."
The team from Bruwier
"The use of fresh potatoes decreases every year and the processing section rises. We have followed this evolution," explained John. "We used to talk of shipments to Tunisia and Algeria, which came back every year, but that is no longer the case. The last decade has evolved and I see that continuing further. The whole sector has followed. For example, you see the contract prices getting better every year because more product is required by the sector for growth so people want to keep it interesting so the grower continues to supply potatoes."
No threat
Is it a concern that the processing industry is increasing? "No, not for us. The situation 7 or 8 years ago as a trader was much more uncertain. This was due to the tendency for the processor to go directly to the grower and the trade was pushed aside. Every trader will then have been questioning their business. Whereas now, because of the greater need this doesn't always happen through just the grower or trader. It is a one on one story and that will not change in the future. In many cases growers prefer to work with the trade. If there is a quality problem, the trader will seek and find an alternative solution. For processors it's not that simple."
Export
"It is difficult to say how the season is going to run. There has been a lot of talk about a possible shortage and big prices, but I attach little credence to this. We see what is has come out of the ground and that is better than everybody expected. In September there was a serious growth spurt but everyone only seems to be thinking about the Summer figures and not considering September. There is a tendency for growers to give market information and I understand that, but they should give the right information and that does not always happen." For this season Jan expects several small customers for exports. "I don't expect to have any really large customers in between. What I do find dangerous about this season is that many believe there will be better prices in the New Year. There are potatoes in storage in West Europe and I think that few will be made available before the end of the calendar year. The packet is the same but the time is shorter. We exported some to Central Europe but not everything was taken. A portion was taken by our customers and put into refrigerated warehouses and will only be sold here when the market is better. That is perhaps more dangerous."
For more information:
Jan van Luchene
Bruwier Potatoes n.v.
Galgestraat 1A
B-8790 Waregem
T +32 56 61 33 33
F +32 56 61 30 33
info@bruwier.be
www.bruwier.be
Jan van Luchene
Bruwier Potatoes n.v.
Galgestraat 1A
B-8790 Waregem
T +32 56 61 33 33
F +32 56 61 30 33
info@bruwier.be
www.bruwier.be