We are headed down home stretch.
Storage season (northern hemisphere- apologies to those of you in Australia, New Zealand, South Africa and other southern points) is drawing to a close, 30-60 days of processing are left for most plants. Defects are getting worse, lots of rot. Retaining workers is a sore issue. Life in the potato lane!
We have seen lots of change since the new crop started coming in. The economy was growing with no end in sight then; just a few weeks later- BOOM, the market is in free-fall, salaries, jobs and benefits are being cut, it is a whole new landscape.
The restaurant market slowed, retail expanded. People are eating at home more. No big surprise.
Then the dollar weakens. Production is shifted from the US to other countries. Canada, EU. Australia gets hit by reduced overall demand. Potato blight breaks into Ireland, zebra chips down under.
But, through it all, there is no real cliff to fall from. Because we are talking about potatoes. Tasty, low-cost nutrition. People eat them and always will. Sometimes one segment or the other tweaks up or down. But we work in a relatively stable industry, one that others would envy. You don't want to be working in autos today. Or the computer chip industry. We are on solid ground.
Friday, May 22, 2009
Last Month of the Season
Friday, May 8, 2009
The Economy, Revisited
Folks, I must say, the economy seems to be affecting our industry more than I expected 6 months ago.
We are definitely seeing a slowdown. Production is down a bit in many regions, varying from practically flat to an 8% or so drop. Simplot has reported they cannot process all the potatoes their Tasmanian growers produce. We are seeing many projects get delayed by 6-12 months, plus a few are getting cancelled. Processors are looking to invest only in those projects with the very highest returns; the threshold has been raised, and fewer projects are making the cut.
Further confusing things is the strengthening of the US dollar: This makes production relatively more expensive in the US, which in turn shifts production to other countries, particularly Canada. So those companies who were considering US capacity expansion two years ago are now using up excess capacity in Canada. Not the best thing for us in the equipment business.
What is Key doing about this?
First, we firmly believe that recovery from this downturn is in the not-too-distant future. At that point, we expect processors will need to invest in areas that have been deferred for the last year or so. So we expect a bit of a spending flurry for several months after the recovery.
Second, because we expect the recovery and the flurry, we are investing now in new product development. We are definitely not "hunkering down" to try to simply survive this period. We want to emerge from it on a ramp of business, and so are developing new solutions to serve our clients better. You have seen recently our announcements of a wide chip/crisp sorting system and a whole potato sorting system. Expect other announcements for new products on a fairly regular basis over the next several months.
Tim
Friday, May 1, 2009
A Word on Whole Potato Sorting
With the recent press release and emailing to many of you (http://www.key.net/about/news/optyx-wps/default.html), a few comments are in order:
To get to the details, click on the above link, and then click on the "Optyx WPS for Whole Potatoes" link on the page. It will take you to our brochure and a video clip that shows the concept. We think it will be quite a bit different from what you have seen before in whole potato sorting, in several ways:
Minimal product drop. Most whole potato systems drop the potato about a meter or more, this one less than half that. Avoiding such elevation drops will help with many line layouts, preventing the need for a downstream elevation step.
Gentle product handling. The minimal drop, along with the gentle deflector action enable this. Many applications need very gentle product handling to avoid later discoloration.
Laser identification of foreign materials. Laser has been proven to do this extremely well in many applications, but has not yet been applied to whole potato 3-way sorting. Now the power of laser is combined with high resolution cameras to identify practically everything that is not a potato, and remove it.
Air ejection of foreign materials. Most other systems use mechanical paddles. They work well, as long as the foreign material falls like a potato- same trajectory and speed. Problem is, foreign materials are not potatoes (by definition), and so many categories do not fall like potatoes. Think about plastic films and worker's gloves. The Optyx system sends an air blast just a few millimeters after the laser identifies the object. Point blank, it can't miss. Check out the video- seeing is believing.
Ant the end of the discussion, I am excited about what we are bringing to the industry. No more same ole, same ole. If you are serious about foreign material removal, take a close look at our system, and come to the Potato Convention (http://www.potatoconvention.com/)- I will give a presentation on foreign material control that might be of interest.
Tim