Shropshire tells OFC 'change is essential'

"Change is essential," was the message given to growers by the chief executive officer of the Shropshire Group, based in Ely.

John Shropshire was speaking at the Oxford Farming Conference (OFC) held earlier this month. He told farmers and growers that they need to learn from their mistakes and move forward to survive and be successful in business.

He admitted that, like many companies, the Shropshire Group had itself made mistakes but had learned from them and continues to do well - turning over nearly £300m and employing more than 4,000 people across Europe.

Shropshire said the firm lost millions of pounds in the recession but got back on its feet by "confronting the brutal facts". He added: "The positive thing about the property crash is that we are now able to attack the key issues of farming - making operations more efficient and profitable."

He admitted that the group's Spanish arm lost millions of pounds in the recession. It farms 1,200ha in the UK, Czech Republic and Spain and had become the biggest landowner in the Aguilas Valley, regarded as "the most important salad growing valley in Europe".

However, Shropshire admitted that the firm was so dazzled by the high land values that it lost focus. "That was extremely damaging to the business of farming because nobody looked at the losses they were suffering by growing more and more lettuce and broccoli. The unions got very difficult and when we tried to shut and sell our tomato packhouse we had to spend EUR7m closing it down," he said.

"At the start of the recession in 2007, every farm in Murcia lost money - we lost more than EUR10m. But the sale of the tomato packhouse site and land we had lined up for development fell through just after we had bought another farm at the top of the market. We found ourselves EUR23m short of our business plan as we went into 2008."

Shropshire told delegates at the OFC that, because the banks had stopped lending against Spanish property, he had to offer a personal guarantee for the loan. However, the company continues to farm successfully in the Spanish region but had to change course in other areas as a result of the recession.

"Four years ago the whole market was going organic," he said. "Unusually for us we were late in and over-compensated by investing too much - only to be absolutely hammered in 2007. That year, the market shrank by up to 50 per cent - our business plan had predicted it would double - and we experienced the wettest summer since 1912, leading to the destruction of many of our organic crops.

"These factors contributed to a £5m loss on our organic business that year. But local soon took over as the new organic and we reacted quickly to that, launching a wide range of local produce."

He continued: "Looking at the business as a whole its been a steady, cumulative process of persevering, investing, improving visual quality and taste, cutting costs and acquiring new businesses."

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