"Trade is picking up, renewal is needed"

The trade in flowers and plants is picking up. Royal FloraHolland is expected to close 2016 with a turnover of over €4.6 billion, an increase of 3,8% compared to 2015. To achieve the ambitions for 2020, Royal FloraHolland will go all out next year. This became clear at the General Members' Meeting on 8 December.

Lucas Vos, CEO Royal FloraHolland: "Next year we will again accelerate the execution of our strategy towards 2020. We are investing heavily in digital solutions, bringing order to our services and fees and will start working more efficiently for our members and their customers."

Ambitions
The global trade in flowers and plants is changing significantly. New markets are appearing, sales through digital channels are increasing and growers are, more often than not, selling their horticultural products without the auction clock. Royal FloraHolland wants to capitalize on these developments and continue to achieve healthy trading results in the future. In 2020, the floriculture cooperative wants to achieve substantial margin growth for its members and customers. Royal FloraHolland also wants more consumers to buy more flowers and plants by 2020. To achieve these ambitions and necessary changes, operating costs will have to be reduced by one third by 2020.

Investments
In 2017, Royal FloraHolland will continue executing the strategic renewal programs which started in 2015. €20 million has been budgeted for this. That money will be used to, among other things, achieve sales growth in new markets and sustainable start-ups in the floriculture industry. The commercial auction process and relevant logistics will also be improved. An investment of €72 million has been budgeted for 2017, of which €16 million in special real estate projects such as the renovation of the halls and offices in Aalsmeer. The business premises will thus become safer and healthier and will better meet customer needs. Digital will be the standard in ornamental horticulture. An investment of €14 million will be made in IT next year, most of which will go to the development of a digital trading platform.

Cost reduction
Operating costs in 2016 amounted to €349 million. Royal FloraHolland wants to decrease this by €8 million to €341 million in 2017, by working more efficiently, discontinuing some operations and partly outsourcing others. Unfortunately, this also means that about one hundred people will leave the company.

Sales prognosis
Total turnover is expected to increase by more than €170 million next year to €4.8 billion. This growth is mainly expected in direct flows; flowers and plants sold by the grower directly to the wholesaler, exporter or retailer. Sales of floriculture through the auction clock are expected to fall slightly.

Source: Royal FloraHolland