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Proflora 2005: the bri

Review

Proflora is held every two yearsand the eighth version took placein October with more than 200exhibiting growers, breeders,

propagators, service and material suppli-ers. A high level of diversification in thisnow mature industry was evident with thegrowers only outnumbered by the 43 serv-ice providers. Cluster development, ratherthan just an increase in growers, has beenone of the successful strategies. Other serv-

ices ranged from internet flower auction tologistics, and customised process softwarefor growers. Proflora, mainly a cut flowershow, is the largest of the Americas.

Living up to its reputation of flowerexport giant, Colombia sells 95% of itsproduction overseas (200,000 ton/year),which makes the country the worlds sec-ond overall flower exporter and numberone carnation exporter. Exports have aver-aged US$700 million annually (Figure 1).

The international nature ofProflora was clear in theauditorium: speeches inEnglish only, signs inGerman and Russian, andgroup conversations in

Spanish flowed in accentsfrom different countries. Theimportance of flowers in theColombian economy washighlighted by the presidenthimself, lvaro Uribe, atProfloras opening ceremony.

AsocolfloresThe Colombian Associationof Flower Exporters is bothone of the causes of this sec-

tors initial success and a driving force forits present day modernisation. Responsiblefor 75% of all flower shipments,Asocolflores started out as the sector uniteto deal with protectionist measures by theUS market curbing the growing imports ofColombian flowers, back in 1973.Membership has been growing since; lastyear it went up from 200 to 220 farms.

Ernesto Vlez, president of the Board ofDirectors at Asocolflores and owner ofSuasuque Farms recalls: Initially theColombian flower industry had to dealwith dumping allegations from theColorado carnation industry, and later onthe Californian rose growers. Twelve yearand many millions of dollars later, spent

on attorneys and lobbying, all sides agreethat joining forces was a better way to batle a common enemy: stationary con-sumption in the American market. Alongwith the relatively low per capita flowerconsumption, these are the main chal-lenges in a market that is still mostly driven by celebration dates.Vlez continues Carnations and

chrysanthemums started this business, anlater on due to technical, commercial andphytosanitary issues, diversification came

Arri ving in Cartagena, Colombia,

visi tors are fi rst overwhelmed by the

sweltering heat of this beach town on

the Caribbean coast, and then by the

str iking flower arrangements in the

airport hall , courtesy of Colombian

growers. This shock-and-awe campaign

works, the murmur is audible and

tourists li terally get out of l ine to touchthem, not sure whether the colours and

sizes are real.

By Mauricio C. Mathias

Colombian president lvaro Ur ibe (second from ri ght) , to his ri ght i s Ernesto Vlez of Asocolflores. The fl ower

sector is responsibl e for 95 ,000 di rect jobs plus 80,000 indirect ones.

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Figure 1. Colombian flowers is a 35-year old industry withsteady growth based on organisation and overcoming

successive challenges.

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with roses and others such as freesias andgypsophila, now there are more than 50products. Bouquets for supermarkets is agrowing trend: 15 years ago its marketshare was only 5%, against 50% today.Supermarket sales mean mass productionand price reduction. In the last sevenyears, the world flower trade went up 62%in volume, but only 2% in value, putting aprice squeeze in the sector that we havehad to adapt to.The word to describe the joining of

forces of Colombian growers and the USwholesale/retail industries is interdepend-ence. Today 85% of all Colombian flowersgo to the US, an average of 60% of allflowers imported into the US come fromColombia, and some flowers such as car-nations and alstromerias exceed a 90%market share. The resulting unique mutualreliance is such that representatives of theColombian growers now contribute to,and hence have seats in, the Boards ofmany American trade associations, such asthe Society of American Florists and theFlower Promotion Organisation; the latterbeing in charge of increasing consumptionof flowers, so that today Colombians par-ticipate at an institutional level in the UShome market. In a reverse trend, fruitgiant Dole bought a number of largeColombian farms 8 years ago and nowsells its own flowers, which correspond to15% of Colombias flower exports.

Unable to compete with the price andquality of flowers grown at a nearly idealclimate, some American growers have

closed, others however became importers.Wholesale evolved where there wasalready a tradition for certain crops, rosesin California and carnations in Colorado,for example. Other sectors, e.g. air trans-portation and flower trading/distribution,boomed in Miami, destination to nearlyall incoming Colombian flowers. Royaltieshave also been another major source ofrevenue to US and European breeders.

In the end, according to Asocolflores, itis estimated that for each dollar received

by the grower, about 10 times more is paidby the end consumer, showing that amuch larger part of the chain is in the US,encompassing importers, shippers, whole-salers, retailers, marketers and so on. And,while 200,000 Colombia jobs depend onthe flower sector, in the US it is 220,000,so that there is more added value on theimporting side than in Colombia.

Flor Verde All that may be history now, but the FlorVerdelabel (literally Green Flower), acombination of social and environmentalprotocols, is todays apple of Asocolfloreseye. It has been changing the sector for 10years, achieving great reduction of chemi-cal use, recycling of rainwater captured bygreenhouses (thus reducing flooding),increasing average wages and forbidding

child labour. A school of floriculture hasbeen created to train new workers, manyof them displaced population, an expres-sion describing those who had to leavehomes in the civil war zone.To date, 56 out of the 141 farms partici-

pating in this voluntary program are certi-fied by the Swiss-based SGS auditing com-pany. Expectations are that all memberfarms will participate in the next threeyears, for this is an ongoing programdevised for the sustainable growth of the

whole industry. Social achievements, suchas 13% of flower workers belonging tolabour unions, against 5% of the nationalaverage, have been recognised asAsocolflores won the British & ColombianBusiness and Social Award.

Times of changeMarket diversification to maintain growthis a likely trend for the sectors future,says Juan Piedrahieta, QueensflowersGroup, with EU, Russia and Asia as newoptions. Colombian participation in thegrowing Russian market is recent, but lastAugust Asocolflores had its first stand at aMoscow fair and even won two qualityprizes. We will be at HortiFair inAmsterdam too.

His group is comprised of independentfarms that split costs, buying supplies

together and trading under the samebrand name. His opinion of the presentmoment is the same as everyone at theevent The two biggest challenges for flow-ers now are the Peso revaluation andflower overproduction. Revenues havedecreased with the 22% Peso appreciationto the US dollar since 2003. There is also a25% excess on offer, to a market thatgrows 3% yearly. Its not crisis-mode yet,but there is great expectation to see whereit will all go. Its very different from the

hter side of Colombia

The 2005 Proflora

edition had more than

200 exhibi tors and over

5,021 visitors from 40

countries.

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Review

last Proflora, when people were investing.In addition, Colombian inflation, around6% yearly, has eaten away any price gainwe might have had overseas. And that isthe average inflation, the sectors actualinflation is twice that much due to recordoil prices, since we are so reliant on plas-tics, fertilisers and aviation fuel whoseprices are very oil-dependent.

Since growers cant change the prob-lems, this price-crunch has made us morecost-aware. Labour, being 50 to 60% ofour final cost, has received the most atten-tion, and staff training to raise efficiency isalready happening. The average workermakes around US$ 240/month and eventhough there have been no major layoffsyet, its a risk - we are all in the same boat.Moments like this may be a window ofopportunity for use of technology as well.We have been a very organised sector, butnot a highly technical one so far. Nowthere is a growing interest in thermal

screens, heaters and greenhouse ventila-tion so this could be a turning point forthose willing to adopt a different cultiva-tion approach, Piedrahieta concludes.

Marius Kooij, director of P. Kooij andZonen, a carnations-only breeder andpropagator present at Proflora, sees thesame issues and believes that they aretemporary, not structural problems in thesector. There are around 3,000 ha of rosesin Colombia, but they are also producedin other countries; Colombias 1,500 ha of

carnations on the other hand have nocompetitor at this level. A company pres-ent in Colombia since the 70s, Kooij hasseen changes: Only 10 years ago it was allsoil-cultivated, now everything is grown incoconut fibre or rice husks. Destinationshave diversified to the EU and Japan,which is a market that demands specificvarieties and a broad assortment. Withgood shelf life and plenty of types, carna-tions are back in fashion again. Its a buy-ers market; however, growers with areduced cash flow are renewing theirplants less frequently.

OutlookColombia has had tremendous help fromnature, but the bliss of good weather at the2,500m-high Bogota plateau with 12 h ofdaylight may have hidden the possibleproduction gains via climate control.Whereas quality flowers grown at reason-able cost is definitely a competitive advan-

tage, higher yields is one area with roomfor improvement. So is the adoption ofautomation systems in general, with anaverage 17 workers/ha, it is a very labourintensive industry. The EU and US growershad to face a production cost shock whendeveloping countries became competitors.Colombians now have to deal with a rev-enue loss due to an unfavourable exchangerate. The answer may be the same though:increased yield via technical investmentswith returns from the lower unit costs.

The country also has favourable logisticwith a 3-hour flight to Miami and plentyof airfreight companies (there were 17 atProflora) that result in US$0.9/kg ofcargo. Its greatest advantage though,seems to be the entrepreneurial level of itgrowers. The degree of organisation of thflower sector, not common in developingcountries, has been present from the startWith free trade agreements being negotiaed with the US, Colombia risks increasinits dependency on the American econom

even more. But market diversification isbeing sought; sales to Europe and else-where slowly develop. Its dependence onthe US may be under review, but thismain market still has great potential forgrowth as well. Crop diversification hasalso increased lately, and the country hasmore microclimates to explore, tropicalflowers for example were also present atProflora.Colombian flowers have faced bigger

challenges in the past: trade disputes, phytosanitary issues and the image of anindustry not friendly to the environmentor its workers. As each was overcome thesector improved, and even though thereare still problems, they are beingaddressed by Asocolflores members. Thisassociation has acted as a true sectororganisation, working on long-term issueleading to sustained growth rather thanshort-term goals of individuals. Socialresponsibility as an added value to theirflowers seems to be more than a fad.Most people have seen Colombia in the

news associated to its regions with guerrila and drug problems, and these issues arreal, but there is just as much good newshappening in the flower sector. AnnaBueno, Asocolflores PR Director puts it ina nutshell: People dont have to believewhat we say; they should come and see fothemselves. The brighter side ofColombia, as the sector calls itself, seemslike a good name.

mauriciomathias@hotmail.com

The Bogota plateau alone, home to 85% of the Colombian f lower acreage, stil l has 200,000 ha of fl at, avail able

land.