Floribusiness ‘Export? Ascania-Flora receives better prices on the Ukrainian market’

‘Export? Ascania-Flora receives better prices on the Ukrainian market’

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Ukrainian Ascania-Flora is one of Europe’s largest rose nurseries. Around 220,000 roses are harvested every day at this modern company; mostly for the domestic market. “A few years ago, we were planning to expand with another 20 ha. But then came the crisis. The market is still not ready for an expansion, but we haven’t thrown away our plan”, says director Valeriy Gorban during our visit to the impressive rose nursery, 40 kilometres from capital city Kiev.

By Arie-Frans Middelburg

It’s quite exceptional these days, to be able to visit Ascania-Flora. Director Valeriy Gorban explains that they strongly reduced the number of visitors the last two years. All because of Ralstonia, which has had disastrous consequences for some Dutch nurseries. Gorban does everything he can to keep the bacterium out. For example, customers collect their orders in a quarantine department, employees always work in the same greenhouse, breeders aren’t allowed to go any further than the office and as for myself, I could only enter the greenhouse if I dressed like a Martian.

Old Soviet greenhouses

Ascania-Flora is part of a group of companies which are represented at the Ukrainian market in energy saving solutions, financial services, packing solutions for food products, logistic services, car tires sales, distribution of the food products, honey export and beverage production

Ascania-Flora started in 2000 with the purchase of 2 ha of old Soviet greenhouses. “But those greenhouses didn’t function too well”, says Gorban. “So, we decided to set up a completely new rose nursery, using different techniques from a number of different countries.”

The project began in 2004, and over the course of four years, they built four 5-ha complexes. It was all finished in 2008. They were planning to build another 20 ha. But they had to shelve those plans, due to the crises in 2008 and 2014.

“The crises had an enormous impact on our business. Ukraine is our main market and the devaluation of the hryvnia meant that we were badly hit by the crises. The demand for rose went down. In addition, a lot of our costs are in dollars or euros. We’ve only seen a slight improvement in the situation since last year”, explains Gorban. “The market is still not ready for expansion, but we haven’t thrown away our plan”, adds the director.

 

The fact that they put off the expansion doesn’t mean that Ascania-Flora, which has 550 employees, didn’t invest at all the last couple of years. On the contrary. They made adjustments to improve the efficiency of their current production. They significantly increased the light levels for example. Ascania used to illuminate with 8,000-12,000 lux. That’s gone up to 12,000-16,000 lux.

They also improved the greenhouse climate by investing in relative humidity management and shade cloths. Gorban: „We installed the humidification system of high-pressure ‘Fog’ into the greenhouses. This system offers the possibility to increase the humidity without humectation of plants using atomizing. As a result it is easier to manage the climate  and to create the optimal conditions for plants. Also we installed the system of greenhouses roof cooling. It is provided by sprinkling system and it offers the possibility to improve the microclimate inside the greenhouses.”

The most recent news is that Ascania signed an agreement with Philips about an illumination trial with the latest type of LED lights”, says Gorban.

Expensive electricity

The trial with LED lights is partially motivated by the high energy prices. Gas costs 27.7 cents per m3, which includes VAT. Eight boilers are used to heat the greenhouses and there are a number of large heat storage tanks and CO2 storage tanks spread between the greenhouses. Gorban estimates that their gas usage amounts to 10 million cubic meters per year. It can be more, or less, depending on how cold or warm the weather gets. Their biggest expense, however, is electricity. It’s twice as expensive. Gorban: “Yes, that’s why we’re investing in LED. We’re also investing in our own, 50-megawatt capacity power station.”

When we enter the large processing hall, there are two Aweta machines running. Some of the roses are still sorted manually. Gorban explains that in their greenhouses, they harvest seven days per week, around 220,000 flowers per day. One of the sections is filled with gutters with substrate and plugs, waiting for new plants. It’s for spray roses, they’re very popular in Ukraine, says Gorban.

The next section is newly planted. Crops are renewed every four to five years. Their main varieties are Avalanche+ and Grand Prix. Red and white are the most important colours in Ukraine, too. There’s a strong relation between demand and special flower days like Valentine’s, Women’s Day and Mother’s Day. In the run-up to those days, demand increases and so do the prices. When those days are over, prices always go down again. “At the end of the day, it’s the annual result that counts”, says Gorban.

Imports decreased

Our tour continues past a trophy case filled with prizes and certificates that Ascania won, including awards for their high yield. During the crises, the import of roses also went down, explains Gorban, because those roses became too expensive for the Ukrainians. Import of rose is still very limited. Gorban estimates that imports make up 15% of the market share. “We don’t really notice it. But it does exist.”

At some stage, the large-budded roses from Ecuador and Colombia were popular in Ukraine, but according to Gorban, that’s no longer the case. He isn’t worried about potentially increasing imports, when the Ukrainian economy has recovered. “If rose imports went up, that would be a good sign. It would indicate an increase in the demand”, says Gorban with confidence.

He feels that their main competition comes from other Ukrainian rose growers. They are very active on the domestic market, just like Ascania-Flora. 95% of Ascania-Flora’s production stays within the country. Only 5% is exported. Until recently, Russia was one of the export markets, but that’s no longer possible due to the war between Ukraine and Russia. Ascania’s export markets now include Poland, Belarus and a small amount goes to Germany. The reason for the limited exports is clear. “We receive better prices on the Ukrainian market.”

Ascania supplies to all channels on the domestic market. They take care of the distribution themselves, which gives them a very strong  position on the domestic market, explains Gorban. And they also include flower food with their flowers, which they produce themselves. Consumers can buy flowers directly from the company.

To conclude, Valeriy Gorban reiterates that rose remains the most popular type of flower in Ukraine. “50% of all the flowers sold in Ukraine are rose. There are a few other types of flowers that are popular during a certain season. But rose is popular throughout the year!”

 

 

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