Why salt is an essential commodity in the supply chain
There are many measures taken to keep the food and pharmaceutical industries going during this corona crisis. This is of course evident, since these sectors are crucial to provide for the population and to avert the crisis we are dealing with at the same time. But what is often forgotten, is that these industries are very dependent on salt. Not only is salt an essential raw material at the beginning of the production chain, it is also one of the cheapest. Want to buy a ton of salt? That’s sometimes already possible for a number of euros with only two digits.
Apart from being used for food and de-icing, salt is also used in no less than 14,000 applications. For example, hospitals need soft, decalcified water for kidney dialysis machines.
14,000 applications
Not many people are aware that salt is an essential raw material for the production of many everyday products. Apart from being used for food and de-icing, salt is also used in no less than 14,000 applications. “For example, hospitals need soft, decalcified water for kidney dialysis machines. Without water softener salt, water softeners cannot function,” says COO of ZOUTMAN Bert Lamote. As a salt producer, ZOUTMAN is aware of its crucial societal role: “Many companies would quickly come to a standstill if we would no longer be able to distribute salt due to the corona crisis, including companies in crucial industries such as the food and pharmaceutical industry.”
“The price of salt is not in proportion to its societal importance and the strict quality requirements that go with it. A shortage of salt would quickly lead to a massive standstill in the food and pharmaceutical industry,”
For years, ZOUTMAN has been investing greatly in its production process to guarantee continuity. “Each year we invest 10% of our turnover in new machines, technologies and maintenance,” Lamote continues. “ZOUTMAN is solid enough to withstand the current crisis with flying colours.” ZOUTMAN’s production is automated to such an extent that it is possible to control the entire production line with just a few operators – and that at a large distance from each other. Also, strict hygiene measures are already deeply ingrained in their corporate culture. All of this is why currently the salt manufacturer only experiences little hindrance due to the crisis. Their stocks are kept at maximum level, and the transporters can also still keep up with the work.
Negotiating about one euro per ton
However, to stay in business during times of crisis is no easy task for salt companies. Margins are very low, and winters are getting warmer each year. The latter is already a financial setback: for a long time, the frosty season has been a buffer for many salt companies, because during that time they sell large volumes of road salt. “It is not uncommon for customers to negotiate firmly to pay one euro per ton less. For many salt companies it is difficult to refuse this bargaining, however it puts pressure on the salt market. It is an unsustainable and dangerous situation,” says ZOUTMAN.
Too many employees getting sick is the biggest threat to ZOUTMAN during the corona crisis. “Although we pay close attention to all hygiene measures, we cannot guarantee that our staff will stay healthy. Nobody can guarantee that.” The possibility of staff contracting the virus does not contaminate the salt itself – the virus cannot survive in salt – but it does affect the production capacity. Therefore the coronavirus can indirectly have a negative impact on the many companies that depend on salt.
“It will certainly not come to that,” Bert Lamote guarantees. “We have a fantastic team of committed employees who do everything they can to continue to supply high-quality salt. But it remains a precarious and difficult to predict situation. It is important to realise how important salt is to our society.”