Covid-19: 4 questions for Yvan Schaepman, Boortmalt CEO
How has the Covid-19 crisis impacted your business?
We have adjusted our malt production to meet customer demand. Demand has fallen as cafés, hotels and restaurants have been ordered to close to control the spread of the Covid-19 pandemic. The cancellation of large-scale cultural and sporting events has also contributed to the fall in consumption of beer, and therefore malt.
Between April and October, we expect to see malt consumption down by 25 to 30%. That would equate to a fall of 10 to 15% for the full year.
Boortmalt is part of the food and drink industry, which is one of the sectors least impacted by the pandemic.
What measures have you taken within your manufacturing operations to deal with the crisis?
We have shut down certain production units for a short period to tailor our production capacities to the actual demand for malt. We are not aiming to increase our stocks of malt, as they are already relatively high. The beer that consumers do not drink during the lockdown will not be drunk later. We will not see pent-up demand for pints!
We are making the most of this slow period to carry out repairs and maintenance in our malting plants. For some of our staff, we are also making use of the temporary support schemes being offered by the governments in the various countries in which we operate.
Will this situation affect your plans to acquire Cargill Malt?
No, our plans to acquire Cargill Malt are unaffected. The acquisition remains a key part of our strategy. It is based on the fact that Boortmalt and Cargill Malt’s assets are such an excellent fit for one another. With this combined global footprint, we will at last be able to serve all our customers locally, while continuing to export from Europe, Australia, North America and Latin America where it makes sense to do so. The fundamentals behind this acquisition remain very strong and highly topical.
Are there signs that demand is ticking up in the brewing sector?
As yet, it is too early to look for a rebound in demand. Cafés, hotels and restaurants are just starting to reopen in a few countries, but in many others they remain closed. From our point of view, it is entirely possible that business will return to pre-crisis levels. What we cannot yet predict is how long the recovery will take.