Cuttings Farms Out Of Africa
Selecta's rooting station growers got a firsthand look at how their cuttings make their way to North America from Kenya and Uganda.
December 22, 2010
If you're producing MiniFamous calibrachoas or Selecta's new Trixi Liners, you may be impressed to know your cuttings began their journey to your greenhouse from Africa.
Based in Stuttgart, Germany, Selecta is a fourth-generation family business run by three brothers, Nils, Per and Christian Klemm. Ranked at No. 4 on Greenhouse Grower's Top Cuttings Producers list, Selecta is one of the world's top breeder-producers specializing in spring annuals, blooming potted plants and fresh cut flowers. While 73 percent of its cuttings are shipped to Europe, for the last 10 years, the United States has been a real growth market with growers embracing Selecta's innovative product lines.
For two years, the Klemms have been laying the foundation for future growth, while driving quality, performance and yields. One move was to consolidate production from seven farms to three in Tenerife (Canary Islands), Kenya and Uganda. The other was forging a distribution alliance with Ball Horticultural Co. in North America. This will be the second season all unrooted cuttings are brokered through Ball. Once they are rooted, they can be sold through other brokers.
"We're a family company with limited resources. We can't be everything to everybody, so we have to focus," Nils Klemm says. "Our partnership with Ball is win-win. Yes, there is competition because we are both breeding companies, which keeps us on our toes, but there is enough market for both of us."
Ball's Sales Manager Jim Kennedy says the two companies have been collaborating on setting expectations, breeding goals and the best way to serve growers in North America. While growers will receive their cuttings from Africa this year and next, the plan is for Selecta's varieties to be produced by Ball in Central America in 2013.
"We need to get infrastructure ramped up to do it right," Kennedy explains. "At our farms in Guatemala, the climate is ideal for geraniums. We have land to build on and a 10-year track record. Specialty garden annuals will be produced in Costa Rica, where we have economies of scale. We're evaluating expansion opportunities, climate and logistics."
Currently, shipments to the United States travel from Africa to Europe and then to USDA's inspection hub in Atlanta. Farms in Central America can ship to U.S. growers within 24 hours, six days a week.
Also as part of this joint venture, Ball has hired grower Rick Mast, who owned and managed Glass Corner Greenhouses in Michigan for 30 years, as quality assurance manager for Ball FloraPlant. He and a group of rooting station growers visited the farms in Kenya and Uganda in November. (The trip was hosted by Ball and Selecta and I tagged along as a guest trade journalist.)
Mast will act as a liaison between the rooting station growers, the farms, Ball and Selecta. In addition to being a resource to the growers, he will hold weekly conference calls to give feedback from the rooting stations. "I'll be making regular visits to the farms and rooting stations with the goal of building a cohesive program," he says. "We'll work on ideas and develop new and innovative product offerings."
Brent Troost of Zylstra Greenhouses in Michigan says he is looking forward to these new efforts. "Communication between cutting producer and grower is very important," he says. "Let's face it, everybody in this world is going to have problems, whether you are making widgets or growing plants. It's how you handle your problems and make them right that sets you apart from your competition. If you simply pass the buck, your customer will pass their bucks to someone else and you will lose out."
Dave Eastburn of Gro-N-Sell in Pennsylvania says the alliance between Ball and Selecta is progressing nicely. "I think it is a good fit and their commitment to open availability of rooted genetics helps all of our distributors, sales staff and customers have some of the best genetics for the final customer: the consumer," he says. "The genetics, distribution, sales and technical support make for a great combination. I see great opportunities for us and our customers in the future."
From Wine To Calibrachoa
While the Klemm family's horticultural roots are in the wine industry, in the 1960s, Siegfried Klemm started breeding carnations for the global fresh cut flower market. Then he took an interest in geraniums and poinsettias. But the genus that really put Selecta on the map in the annuals world was calibrachoa.
"My father became interested in calibrachoa when he went to Japan in 1995 to visit Sakata and we became licensed to produce Lirica Showers, which were in shades of blue and purple," Nils Klemm says. "Then Suntory came out with a Cherry Red. We told Sakata we needed more colors, but the breeding wasn't ready yet. We started breeding them because the market couldn't wait. We took a product someone else introduced and perfected it."
This marked the beginning of the market-leading MiniFamous series. While Selecta had tried to enter the North American market with geraniums, new product lines in spring annuals really opened the door. Selecta First Class opened its doors in Encinitas, Calif., in 2003 with Stefan Reiner managing activities. The office closed last year with Ball taking over sales, marketing and distribution in North America.
Selecta has 50 years experience breeding more than 50 species. Six breeders in Germany are focused on annuals, blooming potted plants and perennials, an emerging category. One is focused on cut flowers with key crops in gerbera, gypsophila, solidago and carnations. Crossings, evaluations and selections are perfomed in Kenya. All plants are vegetatively propagated.
In the spring annuals world, Selecta has leadership positions in calibrachoa and osteospermums and breakthroughs with double flowers. The MiniFamous Double calibrachoas won Greenhouse Grower's Industry's Choice award for breeding and a new double osteospermum will be a big introduction at California Spring Trials this year. In blooming potted plants, Selecta is strong in poinsettias in Europe and is estimated to have a third of the market share.
In global markets that are not growing overall, Selecta is growing as producers switch genetics and respond to new offerings. "There are pockets of growth," Klemm says. "If you hit the right market, you can grow, like we have with calibrachoa."
Another hot product line is Trixi Liners, in which growers root instant combinations with three cuttings in one liner. These recipes present challenges on the cuttings production side. If you're missing one variety, it's the same as missing all three. One strategy is to simplify the program by choosing one variety to represent a color in each genus.
Selecta is seeing a 100-percent increase in demand in Trixis this year over last and a 40-percent increase in production overall from last year to this year. This is growth in an environment where the market is flat and indicates the partnership with Ball is working.
"I think Selecta made a good move to increase their sales," says grower Nicolas Zyromski of Les Serres Frank Zyromski Inc. in Quebec. "One of the downsides is the lack of availability in the peak weeks. I think they have a hard time to adjust with the sales going up so quickly."
Moving Production Offshore
Selecta first got involved in offshore production during the 1970s, when there was a labor and oil crisis in Germany. "Production became very expensive," Klemm says. "My father set up a company in Italy for mother stock and rooting. He was also trying to reduce the seasonality of the carnation peaks."
The next move was to Tenerife, one of the Canary Islands owned by Spain off the coast of Northwestern Africa. Climate was favorable along with reduced labor costs until tourism drove costs up. Workers were flown in from Poland to work in Tenerife, but costs have come down again with the halt of tourism and related construction since 2008.
Today the Tenerife farm is used for Super Elite (SEE) stock and to produce varieties in the solanaceae family, like petunias, which can't be shipped into the European Union from Africa due to import restrictions. Selecta moved production to Kenya in 2000 and to Uganda in 2005 with connections to European rose producers. While Selecta owns the farm in Kenya, it leases the one in Uganda. The common thread of moving labor and energy from Germany to Italy, Tenerife and Africa is escaping labor and fuel costs.
Until recently, Selecta had additional farms in other countries and contracted with other cuttings producers. Consolidating production to three farms has paid off. "We have more control with fewer locations," Klemm says. "There's more opportunity to produce better quality and to reduce the cost per cutting. With two farms, we can really invest, build specialized centers and focus the best people. We can see that both our cost per cutting and the quality has been affected positively by this reorganization."
Selecta is producing more cuttings out of the same space. "Since 2001, we've more than doubled our geranium production and sales, and our square-meter yield has almost doubled," Klemm says. "We went from 16 plants to 28 plants per square meter. It's what the customer is asking for. We need to be more competitive and drive down the cost per cutting."
Strategies range from cutting harvesting practices and stock plant management to connecting smaller greenhouses to create bigger ranges with bigger tables and reduce unproductive space. Selecta also matches crops with climate. Geraniums and carnations are produced in Kenya, which is drier and cooler and at a higher elevation. Poinsettias and most of the spring annuals are produced in Uganda, which is more tropical.
Serious About Sanitation
When it comes to keeping out insects and diseases, there are no shortcuts. Selecta's Kenya farm is certified by USDA for geranium production and the Uganda farm is certified by MPS for environmentally responsible practices.
Employees are trained extensively on defined hygiene procedures. All water sources are disinfected with chlorine, ultraviolet rays and 10 micron filtration. This is especially important with Ralstonia being indigenous to the water in Kenya. Plants are grown in volcanic rock that is steam sterilized at a high temperature for 72 hours.
Insect screening excludes whiteflies and aphids but thrips are a bigger concern. "We've been whitefly free on poinsettias for three years," Reiner says. "Our customer expects it anyway, but our whitefly-free label reinforces it with our team."
The farms have laboratories that are always testing the water, fertilizer levels and plant material. But training workers to be good scouts is key. "You cannot test your way to clean," says Ludvig Allnoch, who manages Selecta's production in Uganda. "A sample is not as effective as a great team of scouts. The chances of elimination are higher. We prefer to educate the employees to go through the crop and find issues early, as well as our testing programs."
Going to larger houses and reducing the number of entrances and movement of people has made a difference, too. A worker is stationed at each entrance to assist with sanitation - footbaths, handwashing, smocks and gloves. At Selecta's SEE facility in Tenerife, employees shower, put on new clothes and are there all day. Food is provided and they don't leave the premises.
"Instead of focusing on what we do when we have an insect or disease problem, we just don't want to get it in in the first place," Reiner says. "Once it's in, you lose the house anyway. If you don't bring it in, you don't have a problem."
Taking Care of People
Providing social programs is a big part of cultivating a reliable, high quality workforce. The farms in Uganda and Kenya both have health clinics and workers are fed lunch every day. You'll see soccer fields on site for recreation and the teams from Kenya and Uganda will get together for matches.
At the Kenya farm owned by Selecta, there is extensive employee training and a clear path for advancement. Entry-level workers begin at level C and are expected to move up to B in six months. While the B level represents average speed and quality, A represents good speed, higher quality and the ability to work autonomously. Above that is the AA level, which gets paid the most. From C to AA, workers can increase their earnings six fold. Beginning wage is about $2 a day, which is considered very good in Africa.
Workers are trained and retrained each year and receive diplomas as qualified harvesters. "Many have never had a diploma or even a picture of themselves," says Selecta Kenya's Managing Director Aart de Leeuw. "We have a role to play, to provide jobs, opportunity, even a career. Our goal is to invest in local people and have them here for a lifetime. Developing a local force is more stable than relying on expatriates from Europe."
The investment on the people side impressed Eastburn, who is looking for business partners who share his values. He feels Selecta is delivering the entire package sustainably. "Sustainability, to me, means a growing model that ensures quality, best-use practices, environmentally sound, profitable at each stage, a quality difference for our customers and consumers, but also making a difference in the lives of the people and country from which it originates."