Ornamental sector Brazil mapped

The ornamentals sector in Brazil was mapped in a new report from the University of São Paulo. It shows a number of interesting findings.

In 2014 the total production value of the chain - including garden and landscape architecture - was R$4.51 billion [based on the exchange rate on 14-12-2015: €1 = R$4,26. US$1= R$3,88]. Revenue totaled R$10.23 billion. 20% of this turnover was realized by production companies, 13% in the supply sector and 63% in distribution and services. The ornamentals chain employs 190,000 people and provides government with R$2.5 million in revenue through tax payments. Flower consumption is still low, with on average R$27 per capita per year.

Dutch and Japanese immigrants have greatly contributed to the development of the ornamentals sector in Brazil. In 2014 cut flowers and pot plants had a turnover of more than R$5.4 billion. The ornamentals acreage is estimated at around 15,000 hectares and the number of producers at 8,248. São Paulo state, which includes Holambra, is still the most important area of production by far, with the largest ornamentals acreage and the most producers.

The ornamentals acreage in São Paulo is 7000 ha (46% of the total acreage), respectively followed by Rio Grande do Sul and Santa Catarina with ornamentals acreages of 1,360 ha and 998 ha. Companies in São Paulo are also the largest with an average of 2.99 ha. São Paulo also has the most producers: 2,288 or 28% of the total. In Rio Grande do Sul there are 1,550 producers (19%) and 1,030 producers (12%) in Rio de Janeiro. Lastly, 37% of turnover was realized in São Paulo in 2014, followed by Rio de Janeiro with 11%, 10% in Minas Gerais and 8% in Rio Grande do Sul.

According to the report a strong stimulus is provided in the state of São Paulo by the presence of the three cooperatives (Holambra, Cooperflora and SP Flores) and the large, strong sales market nearby. Both CEAGESP and CEASA Campinas are there. In São Paulo a combination is found of easy access to suppliers of products and services, investment in technology, better training of the workforce, a willingness to cooperate and better access to the market. Disadvantages are the mostly unfavorable climatic conditions and high labor costs, land prices and taxes.

Main production regions in São Paulo are Holambra, Atibaia, Mogi das Cruzes and Ibiúna.

In the other states ornamentals production is generally smaller and much simpler. Many of these are small-scale family companies using little technology, with little training/education and low income. The cooperative spirit is often lacking. This also applies to the second major production state, Minas Gerais, with its approximately 576 producers and ornamentals acreage of 645 ha. The production of roses is important, especially in Barbacena and Andradas, although to a large extent these are 'free species'. There is a great lack of education, training and technical assistance. The mostly traditional producers are not really open to change.

Because of its geographical location and specific microclimates the state of Ceara holds a somewhat special position. In 2014 there were 191 producers with a total of 338 ha. Because of the local conditions it is possible to produce roses and plants here which are then exported to major markets. It has an equable climate and many hours of sun. Roses are mainly cultivated in greenhouses. There are cold stores at the international airport. However, there are problems with infrastructure and energy and water supply. There are all sorts of businesses and producers there with many different levels of technology.

For the first time an attempt was made to quantify the supply sector in ornamentals production. In 2014 it produced a turnover of R$1.3 billion, of which R$855 million in inputs and R$435 million in machinery/equipment and investments.

Turnover from cuttings, seeds and bulbs amounted to R$248.5 million, not including royalties. Substrate turned over R$171.1 million. Plant protection products R$30.7 million, biological control R$3.3 million and fertilizers R$82.6 million. Harvest mechanization is still in its infancy. Most harvesting is still done by hand.

Greenhouses (structure) turnover in 2014 is estimated at R$147.2 million, cover materials (plastic, fabric, agrotextiles) at R$118 million. Production tables at R$52.1 million, climate control systems R$15.5 million and (ferti) irrigation R$81.9 million. In lighting turnover is supposed to have been R$6 million and in potting machines R$13.4 million.

97% of production is sold in Brazil itself. In descending order of importance distribution channels are specialized middle wholesalers (41%), garden centers (14%), garden and landscape architects (12%), retail (flower shops and supermarkets) (9%). Only 2% of ornamentals is sold to wholesalers in wholesale centers.

Losses in wholesale and retail are estimated at 10% and 20% respectively for cut flowers and foliage and 5% and 10% for potted plants.

São Paulo is not only the main production area, but also the most important market. The average consumption per capita there amounts to R$45.

Brazil has to import a significant part of the starting material. The import of live plants and cuttings was US$10.13 million in 2014, a strong increase compared to 10 years ago, when import totaled US$0.8 million. In 2014 also just under US$1 million was imported in bulbs and rhizomes. The Netherlands is Brazil’s main supplier, with 44% of import.

When the report was presented OCESP, the organization of cooperatives in the state of Sao Paulo, mentioned poor transportation and storage, lack of trained personnel, limited funding and inadequate phytosanitary control as the main bottlenecks in the chain.

Fava Neves, coordinator of the study, thinks the cooperatives are at the basis of the success of the ornamentals chain. The three major cooperatives in the country, Veiling Holambra, Cooperflora and SP Flores, are all in the state of Sao Paulo, which represents 40% of the local market. Outside this state ornamentals production is fragmented and attracts limited technology and investment. Fava Neves sees formation of cooperatives as the way to further expansion of the ornamentals sector in Brazil.