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Written by Caroline Marshall-Foster
While 2013 turnover for the Royal FloraHolland Flower Auction Cooperative grew by 1.8% to €4.5 billion, volume decreased dramatically with the Auction recording a loss of €7.4 million as a direct result of growers increasingly moving to selling direct rather than putting their products through the auction. In addition two large bankruptcies and land devaluation of €10 million added to the woes.
As regular business operations were unable to sufficiently absorb these losses, FloraHolland has had to take measures to bring the operating results back to the desired level in the foreseeable future and in October ’13 implemented a reorganisation strategy – codename Kompas - costing in the region of €22 million which will be underwritten by the members of FloraHolland in order that the company can maintain its financial stability.
Commenting on the results General Manager Lucas Vos said: "In 2013, European consumers stayed loyal to our product in what was a difficult year. I am fully aware that there was not such good news in all areas. Our individual members saw varying results and many companies in this sector have been struggling for a while. While the Netherlands' floriculture sector has a solid structure, we need to continue to respond to developments in the market from this strong basis."
However while Kompas has already resulted in changes, not just to costs, services and organisation but 200 redundancies as well, greater clarity of the strategy has been demanded by both customers and members of the auction. As a result FloraHolland 2020 has been launched to more clearly explain the plans.
General Manager Lucas Vos comments, "Strategy starts with one question: 'Why?' In our case the question is, 'Why are members loyal to FloraHolland?' The second questions is, 'What are the specific areas in which we need to excel in the changing market to ensure that we earn and even increase their loyalty in 2020 too?' We will be answering these questions under FloraHolland 2020 over the next few months."