Cor de Fijter, Rabobank

“Situations in Dutch horticulture doesn't hinder businesses”

It is said that the Dutch greenhouse sector has to deal with difficult times. Some greenhouse growers have to close their business while others are innovating and going forward. According to Cor de Fijter, sector manager for the largest financier of Dutch horticulture, Rabobank, difficult times are part of the life-cycle of the greenhouse industry; it has always been present. Over the last few years, expansion of production areas, currency fluctuations, energy and market risks, and strategic decisions which worked out unfavourably are the reasons for the current situation. However, according to de Fijter, this situation does not prevent Dutch businesses from thriving.

Rabobank is one of the largest financiers of Dutch horticultural enterprises. As sector manager of the Rabobank, Cor de Fijter finances starting and existing greenhouse growers. They will only be financed when they have good ideas that suit the market. Together with the grower, the Dutch bank exchanges its views on the markets. Nowadays, a grower needs to have more equity in order to survive in difficult times. "There are market trends which you can anticipate and Rabobank will discuss these trends with the entrepreneur. However, the entrepreneur has to make his own choices. We give an insight into these trends but we cannot foresee the future”, says De Fijter.

Even though the starting or existing grower has great plans, it does not guarantee a successful story for this grower. It all depends on the external trends and the choices that the grower makes. "This combination can be either successful or not" says De Fijter. Currently, many Dutch greenhouse growers are under pressure . According to De Fijter, the following points are the main reasons for making success harder for Dutch growers:

Expansion of production area

Product offers are increasing and the consumer wealth is stagnating. Therefore it becomes more difficult to sell the products. This counts for both greenhouse vegetables and roses. “In both sectors a geographical growth can be noticed.” The tomato, for example, is produced worldwide and the number of varieties has increased.

De Fijter identifies the same trend with regard to rose growers. “Just as tomatoes are consumed continuously, roses can be purchased year-round nearly everywhere in the world. Therefore it is logical that starting growers choose to cultivate roses.” Moreover roses can be transported easily and can therefore be grown in countries with a good climate and low wages, like Kenya. But this has resulted in a market that is very sensitive to saturation on occasion."

Currency fluctuations

Beside the expansion of the production areas, the currency rates are also a matter for attention. Normally, If local currency rates drop, a country will become more attractive as an export country. According to De Fijter, this may be an additional reason that the Kenyan rose growers export their products to Europe, rather than the US; the US Dollar is weaker than the Euro. Currency is a big influence on the shifts of export markets, and are a big point of focus."

Energy risks and market risks

Dutch growers complain about the high energy prices and are blaming them for the large number of bankruptcies that took place over the past few years. However, market risk, like price fluctuations, is a factor that is more important explains De Fijter. “Energy costs are important; however the fluctuation in product price will affect the business more than the fluctuation in energy costs. "Growers are always influenced by energy prices. These risks cannot be excluded, unlike the price risks. Growers can anticipate the market trends, also the price of the product or product category. That is why we tell growers to worry about their market price instead of the energy price. They need to obtain a larger influence on the market price."

According to De Fijter the situation in the Dutch horticulture sector is not as bad as often insinuated. "A large emphasis is put on the distressed growers, but not on the growers that are successful. “There are also many successful Dutch growers that thrive in difficult times. We need to emphasize that growers can take advantage of these difficult times, that they have to try to be increasingly innovative and have to discover new markets. New product possibilities are arising and growers need to take advantage of these new possibilities. In the end, it is all about the choices they make."

For more information
Cor de Fijter
Email: c.fijter@rn.rabobank

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