WEDNESDAY 10 MAY 2000

PROFESSOR MICHAEL WILSON, MR PETER SIDDALL AND MR DAVID TEMPERLEY

  120. What sort of feedback have you had from the industry itself as a result of the changes which have taken place? Have they responded at all?
  (Professor Wilson) I have spoken to the Chairman of HDC and to people as I have gone around growers and so forth. I have explained the changes in my "messianic way" (as it was referred to) and feedback seems to be positive. I generally pick up good vibrations that customers are pleased with the way we are focusing things down. If the message gets through that we do use the East Malling and HRI Associations, and our commodity specialists, and HDC and their research council, if they can participate in these team meetings, in these groups and feed in issues and problems and derive added benefit, then I will be very happy that it has all worked.

  121. I would like to look at HortiTech in a little more detail. I was taken initially on this subject in the corporate plan on page 39 to the following observations you make which perhaps illustrate the importance of HortiTech and I just want to read this couple of sentences. This is commenting on the financial projections and it says, "These analyses demonstrated that the cash position, as well as the profit, are particularly vulnerable to a more pessimistic view of HortiTech sales than in the base case. Removal of the projected HortiTech sales would result in a loss in year five of £361k compared to the base case position of a retained profit for the year of £3 million. A substantially poorer cash position would arise in the later years of the plan with a cash deficit of £2.4 million in 2003." Then it goes on to comment about the rightness of the decision to increase income by the establishment of HortiTech. Now, that says to me that this is a sort of hinge point to success or failure, the fulcrum perhaps of the organisation, so perhaps we could turn to page 28 of the corporate plan and associate that with page 101 of the company report and explore in a little more detail just exactly what is going on in the HortiTech area. My first question is how many of the business units are actually up and running at the present time and what, if we look at the next two or three years, are their projected business plans? What do they say to you that they are going to generate in the way of income?
  (Professor Wilson) We have that analysis. We are doing a rigorous analysis of the viability of the units and already we have started that process. Seed Services, Propagation Services and Diagnostic Services are all going.

  122. Can I just stop you at that point and ask when did those start going?
  (Mr Siddall) Two years ago.

  123. About two years ago?
  (Mr Siddall) Yes, about that.

  124. About two years ago, so 1998?
  (Mr Siddall) Yes, and that was really the beginning of HortiTech.

  125. That was the beginning, so what about the rest of them?
  (Professor Wilson) The things that are listed there on page 28 of that Corporate Plan as "Publications", and "Consultancy Information and Subscription services" we still have, but in a different form—

  126. There is a slight muddling there. You said that instead of Publications you now have Consultancy, so does that mean the two are together?
  (Mr Siddall) Yes, they have been rationalised.

  127. So those are together, okay. That leaves—
  (Mr Temperley) We have got one business unit now called Technical Information Services. That is the merger of those two business units.

  128. So we have got two more on page 28, which are Bio-Waste Services and Commercial R&D Services. What is happening with those?
  (Professor Wilson) As far as I know, Bio-Waste Services does not exist. I am not sure if it ever did in my time with the institute.

  129. Hang on a minute, you are in charge!
  (Professor Wilson) Well, I have only been since last August!
  (Mr Siddall) This one never came into being in fact. Bio-Waste did not go forward. The ones you have seen so far have.

  130. What about Commercial R&D Services?
  (Mr Siddall) That is the future.

  131. When is that starting?
  (Professor Wilson) It has started. We have got three units in there now.

  132. When did it start?
  (Professor Wilson) It started with the other ones, I guess.

  133. Hang on because I was told that three started in 1998 and now we have discovered that there is another one which started. When did that start?
  (Mr Siddall) Let's just put it in perspective. I think these definitions of business units were initiated at about the beginning of HortiTech which was, as you put it, about the spring of 1998. The ones that have prospered are Seed Services, Propagation Services and Diagnostic Services and I can tell you that in the latest financial year all of those achieved their budgets.

  134. But you are still circumnavigating the one area you got terribly excited about a second ago when you said that Commercial R&D Services are very important and then you told me it had started.
  (Mr Siddall) Yes.
  (Professor Wilson) It started with the others.
  (Mr Siddall) And it has generated in the last year £1 million, but it should have generated £3 million. It is the area where we have the biggest deficiency and it is the one where we have made the biggest changes.

  135. So you have actually got four units up and running?
  (Mr Siddall) Yes.

  136. Are you planning—
  (Professor Wilson) It is five with Technical Services.

  137. Is that now up and running?
  (Professor Wilson) Yes, that is the merger of Publications and Consultancy.

  138. So the casualty is Bio-Waste Services and there are no plans to resurrect that at the moment?
  (Professor Wilson) No.

  139. Does each one of these have its own individual business plan?
  (Mr Siddall) Yes.