If the full impact of last year's E coli outbreak in northern Germany on the European fresh produce business was not already known, the news that the Netherlands' largest fruit and vegetable marketing organisation, The Greenery, saw a dramatic fall in turnover and net profit during 2011 has certainly underlined the point.
Already under pressure to streamline its operations, The Greenery posted a net profit of €1.9m for the year, down 39.6 per cent from the €4.8m it made in 2010, a decrease it attributed to the E coli crisis and to poor summer weather.
Lower volumes and sales prices resulted in a combined annual turnover of €1.61bn, compared with €1.84bn in the previous 12 months, the company reported.
The Greenery has evidently taken comfort from the fact that it achieved a profit in the face of such a turbulent year's trading and that, exceptional circumstances aside, its commitment to removing cost from its value chain has shown signs of paying off.
Recent attempts to streamline the group's logistics network, for example, include the planned closure later this year of an operation in Freshpark Venlo, close to the German border in the south-eastern Netherlands.
'Major improvements and investments in the commercial and logistics organisations helped to significantly improve The Greenery's commercial strength and the efficiency of its business operations,' commented general manager Philip Smits.
'The commercial process was further simplified with a market approach now driven by product specialisation while supply chain management measures contributed to reducing operating costs by 2.9 per cent.'
All the same, the impact of the E coli crisis on the group's 2011 result was substantial, amounting to around €6m.
'The EHEC crisis, the poor summer weather and the Russian border closures contributed to the decline in total sales volume of some 6 per cent,' Smits continued.
Worst affected, said the company in its annual statement, were the results of individual members of Coforta, the cooperative of around 900 growers which owns The Greenery.
Yields per square metre among fruit and vegetable growers supplying The Greenery in 2011 were reportedly 27 per cent lower on average than they were in 2010.
'The lower sales volume combined with the low sales prices put pressure on the operating result,' the company added. 'The lower operating costs and higher profit from participating interests contributed to the positive net result.'
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