Foot and mouth disease may devastate the Dutch meat and dairy sector, according to the country’s trade unions. Industry giants like animal and fish feed company Nutreco are urging investors to remain calm however, maintaining that any Dutch losses as a result of foot and mouth will be compensated by foreign operations.
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The first two cases of the highly infectious virus was confirmed by the Dutch ministry of agriculture on Wednesday and trade unions have estimated that up to 20,000 meat and diary workers will be sent home as production shuts down. Industry analysts are similarly pessimistic in expecting the earnings of Nutreco to suffer as the disease spreads. They point out that as farmers are restricted in bringing their animals to slaughter, the productivity of Nutreco’s activities will suffer.
Nutreco, the largest breeder and processor of poultry and pigs in the Netherlands, points out however that dairy exports of pasteurised goods are still permitted despite the occurrence of FMD.
Dmitri Castelyn, a spokesman for Nutreco, commented that profits will not be affected by the 72 hour transportation ban currently in the Netherlands: “Many of the animals destined to go to our Dutch slaughterhouses come from other countries, and those animals can be rerouted to slaughterhouses in Belgium or Spain.”
Furthermore, while only a third of Nutreco’s sales are in the Netherlands, its fish related activities contributed to 70% of its 2000 operating profit. This reached €146.2m according to the company’s full year earnings report in early March, and the company expects the pick up in fish and poultry caused by foot and mouth to compensate for its Dutch feed and pork operations.
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By GlobalDataIf the crisis spread across Europe however, Nutreco warned that it might not make its target 10% growth in earnings per share for 2001.
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