A lack of growth opportunities in the UK has forced a leading Scottish potato supplier to turn its sights on eastern Europe for a new market.
George Taylor, chief executive of Dundee-based Taypack, which handles 130,000t of potatoes annually and supplies 40% of Asda’s UK business, told the SAC Association of Potato Producers Conference his company had reached a growth plateau in the UK.
“We are operating in an extremely mature market in the UK – we are not seeing a huge amount of store openings and many retailers are now looking abroad so it is getting tougher.
“With only eight major players left in the UK packing for all the retailers, gaining more business is, realistically, going to prove very difficult,” said Mr Taylor.
Searching for new markets, the Taylor family has set up a new Dundee-based company, KRMG (Ukraine), to operate in Ukraine and last year grew 90ha (222 acres) of potatoes, producing 35t/ha selling to local markets at £125/t for ware or £300/t for seed.
Shipping potatoes back to the UK wasn’t on the cards, he said. But next season the firm hoped to supply a major crisp manufacturer in Russia.
The major drawbacks KRMG encountered were the lack of a direct flight route from the UK to the Ukraine, the language, and the poor road infrastructure. A lack of co-operation at customs meant cultivation equipment was not released for a month, which put planting back in year one.
Agronomically, chronic couch grass infestation needed three or four glyphosate sprays, although fertiliser and chemical costs were similar to the UK. Typically the winters were very harsh but global warming appeared to be an issue, with some sprouting of stored potatoes this winter.
To take money out of the Ukraine would mean a 30% tax implication, but the Taylors planned to reinvest. For this coming season the firm had rented 2500ha (6177 acres) with a final target of 5000ha (12,355 acres). Rent cost £10/ha with labour costing £260 a month, or 80p/hour.
In contrast with the UK, where Taypack is piloting bioethanol production from its 30,000t of waste potatoes, there is a ready market for waste potatoes in the Ukraine. email@example.com