global F&A conference
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What'sNewS Issue 7 November 2000
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Day 2 - supply
chain efficiencies
and a changing
environment
Changing roles
Main driver
Traceability
Q&A
Biotech benefits
likely to spill over into the rest of southern
Africa? Russell responded that it is diffi-
cult to assess, as there is some rippling
over into South Africa, hut the govern-
ment there has acted positively. In other
countries, such as Tanzania, Malawi and
Swaziland, the economies are so liberal
that Russell does not believe conflict is
likely.
Jonathan Kingsman was close questioned
on his view of the Internet. Did he expect
to see trading online? 'Not for a long
time,' he said. 'In the near term, I see the
role of the Internet as offering tremendous
efficiencies in processing the paperwork.'
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The role of the Internet was further
elaborated by both our own Ejnar Knud-
sen, CEO of vTraction, and James Proud-
lock of Sugaronline. One of the major
thresholds for companies in any industry
is finding its way through the intricacies of
the world-wide web and Internet. There is
a lot of hype about e-commerce and the
fact that no company can afford to miss
the cyber boat. The advent of e-commerce
in the sugar industry is inevitable,
Proudlock believes. However, the
timescale will be diverse in various links in
the chain.'People are also concerned about
security, not only in our business,' Proud
lock argued, 'but in all electronic transac-
tions. Plus, how do you handle
arbitration?'
A number of speakers, such as Stefano
Meloni and Luis Fernandez, and RI's own
F&A sector specialists raised the impor
tant issue of the changing roie of sugar
and sweeteners. Increasingly, these are
used as ingredients in the preparation of
other, usually higher-priced products. It is
this trend that Dutch company Cosun's
CEO Cees Menkhorst discussed in his
presentation which described transition
from a traditional sugar manufacturer to a
food ingrediënt supplier. Mats Anderson
of Danisco elaborated
on the role of food in
gredients, also in
emerging markets. No
one is prepared to
compromise on taste,
but food security is
very much a key issue
and the industry is de-
pendent on consumer attitudes.
HIS and new developments in the intense
sweetener sector were the subject of Mar
tin Jager of Germany's Nutrinova. This
market is growing at around 4% per year,
although sales value remains more or less
constant. In response to questions, he said
that the main driver in development and
growth in the HIS sector is lifestyle rather
than economies.
As foods have become increasingly com
plex in their composition, and the avail-
ability of genetic modification has
changed the structure of many of the in
gredients, traceability is one of the hottest
issues in the industry today. Frank Kars-
hergen, CEO of the Belgian Amylum
Group, explained the processes his com
pany has developed - to ISO Standard - in
creating comprehensive traceability in the
international starch trade. Regulations, es-
pecially in the EU and other mature mar
kets (although not the US at present), are
becoming increasingly stringent. Indepen
dent certification is now a fact of life.
'Some demands are somewhat overdone,'
commented Karsbergen, 'but the accept-
ability level among consumers of GM in-
puts is zero.' The bottom line for Karsber
gen is that companies at any stage in the
chain which refuse to reeognize this new
reality will not survive.
CïMOs were obviously a hot topic for the
whole conference. It's an ironie situation
where US companies aren't concerned
with this issue, while the same company
operating in Europe is under extreme con
sumer pressure to produce without any
GM inputs whatsoever. Chairman Charles
Groenhuijsen noted here that the US is
currently unconcerned with GM, but for
how long. 'It will only take one scandal or
recall to change consumer perceptions in
America.'
Karsbergen noted that many people in the
industry had believed the discussion
would be short-lived. 'This is not hype,' he
said. 'Plus, traceability will be with us for-
ever, no matter how the GM debate con-
tinues.'
But the discussion on genetic modification
wasn't finished yet. Next to speak was
Philippe Chatin, global head of sugar
beets at Novartis Seeds. He used this op-
portunity for an impassioned plea for real
information to consumers on what GM
and ag-biotech actually are. In addition,
he would like to see the industry itself lob
bying regulators for greater understanding
and, what he believes, would be resulting
greater acceptance. 'You, as an industry,
should take ownership of this issue. If you
don't take it now, then I ant not sure the
sugar industry will be able to take advan-
tage or gain the benefits biotech has to of
fer in the longer term.'
In Q&A, Chatin was challenged on
whether it was the role of the sugar indus
try to lobby for either GM or biotech ac
ceptance. Chatin came back with the argu
ment that farmers and producers are much
more accepting of GM inputs, even in
countries like India, where initially there
was strong opposition. In conclusion,
Chatin said that he believes the whole
F&A industry has been mistaken in the
way it has approached ag-biotech and GM
development. 'Too much emphasis was
put on the advantages for farmers and
processors,' he argued. 'As an industry, we
should have focused even more on the per-
sonal benefits that will accrue for the end-
consumer.'
A full-lengtb version of this summary is
available for clients - please contact Mar
keting RI on +31 30 216 2804 for info
