Nieuws - 23 oktober 2008

Dijkhuizen keeps hold of the purse strings

The financial crisis will hit the DLO research institutes first, warns Wageningen UR Executive Board president Aalt Dijkhuizen. He has called for extra caution when it comes to big expenditures, and flexibility when appointing new personnel.

Aalt Dijkhuizen urged the directors of the sciences groups last week Monday to be extra cautious when making new expenditures. He wrote in an e-mail: ‘We must be extra cautious when it comes to appointing new members of staff and making large purchases. We must also only embark on investments, such as one building for AFSG, that we can fully afford and that are well within our budget. We cannot afford any unnecessary uncertainties, as there are enough from the outside world.’

‘There will not be a halt on vacancies,’ Dijkhuizen explained, ‘but I ask everyone to be alert. We can expect a tense time ahead now that the financial crisis is hitting the real economy. DLO will be the first to notice this: when businesses start to spend less, R&D is often the first to be cut. We have to ensure that we are not left holding the short straw if the order portfolio shrinks. We can only do this by being flexible when it comes to costs.’

Wageningen UR does not have savings in Iceland. ‘We bank at the Rabobank and ABN-AMRO, the bank shored up by the state. Our own solvency is also fine.’ Solvency is calculated by dividing total own assets – money in the bank plus property – by total assets – own assets plus loans. Wageningen University has about 230 million euros total assets, of which 105 million euros is own assets. This makes a solvency rate of 46 percent. The DLO research institutes have own assets of between 45 and 50 percent of the total assets.

‘The ministry of education, culture and science gives 40 percent as a minimum solvency rate for universities. At DLO we are aiming for a minimum of 45 percent, as this part of the organisation is more sensitive to market fluctuations. There are companies that have a solvency rate of less than 20 or 25 percent, but if there’s a downward turn things can go badly wrong. We cannot afford this kind of risk profile.’

The Executive Board will decide soon whether to build a second education building next to Forum, and whether the entire Agrotechnology and Food Sciences Group will move sooner to one location on campus. Will this be more difficult to finance now? ‘No, we have a good track record when it comes to our business management and plenty of collateral. We own a couple of thousand hectares of land, so banks won’t be so wary about loaning us money. But we have to make sure that we can afford to do so ourselves. That depends on how confident we are about student numbers and acquiring research contracts. At the moment we are looking at the financial figures for the most recent building plans, especially if the economy does not pick up for a while. We hope to come to a decision next week.’