The Thrill Of Building New
Floricultura CEO Kees Schoone comes from a long line of Dutch orchid growers, and he’s been a part of more greenhouse expansions in The Netherlands than he can remember.
But Floricultura’s latest build, a 400,000-square-foot construction in Salinas, Calif., was a particularly refreshing project for Schoone–and for good reason. Schoone had no limitations in establishing a North American location. He wasn’t locked by land or forced to build around an existing facility. Instead, Schoone had an 80-acre property on which he could build and a wealth of ideas he could apply without any physical boundaries.
“Building from scratch is the most fun. It really is sort of thrilling,” Schoone says. “You start with a fresh piece of paper and build exactly the way you want.”
Coming To America
Floricultura saw an opportunity in the United States because only a handful of young plant growers here specialize in orchids. Many of the orchids historically finished in the U.S. are propagated in Asia or Europe, but inflation and the increased cost of receiving stock plants from overseas has hurt the bottom lines of some growers. The speed at which U.S. growers receive their stock plants from overseas is another issue Floricultura identified.
It’s because of these factors that Floricultura began eyeing the U.S. around 2000. By 2005, a property had been purchased in Salinas. Now, the operation is on the verge of its first sales after completing the construction of its facility last year. The construction took about two years in all, but the journey to completion was a long road.
“We looked for a location for a while,” Schoone says. “Salinas eliminates every uncertainty you have because the climate is good, we knew we had natural gas and electricity was available. For us, it was a no-brainer to go there.”
Once Floricultura settled on Salinas, Schoone began to explore ideas for a facility. The key to designing a facility for young orchid plants, he says, is the size of the containers.
“We designed the structure around the container,” Schoone says. “We wanted a relatively tall structure because we want a very stable climate. The taller, the more stable your climate is. You have more control of your humidity, more room to play with your light–especially if you use artificial light, which we’re not. We also needed the height because of our overhead systems.”
One challenge Schoone encountered throughout the process was receiving materials on time and in an orderly fashion. All of Floricultura’s structures in The Netherlands were built by Bosman, an affiliate of System USA, which built Floricultura’s Salinas facility. Still, despite having a U.S. company do the build, a number of the facility’s materials were sourced from Europe.
“Some take six weeks to arrive, some take four weeks,” Schoone says. “We spent a lot of energy planning how things leave The Netherlands and what order they arrive in the United States. Usually, your footing materials come last and your roof comes first. You’d like to do it the other way around.”
Another challenge was locating and buying a property. Particularly in Salinas, Schoone says it was difficult to find the specific acreage he needed. Property, he found, is clearly at a premium there, so when he bought the former Yoder Brothers facility he bought more space than he needed.
“In Holland you can buy an acre, but in Salinas Valley they don’t sell it by acre,” he says. “You actually overbuy a little bit. I don’t think it’s realistic to have 80 acres of greenhouses.”
But what can a grower do if he’s wanting to make an investment, and in California no less?
“It’s still difficult to tell how things will turn out because we’re not selling yet,” Schoone says. “But we’re very excited. The next couple years are dedicated to proving we add value to the orchid market in the United States. We think we will. Now, we have to prove it.”
Why Build Now
Another California grower, Greenheart Farms, is in the midst of a considerable greenhouse expansion in Arroyo Grande. Greenheart built its first 20,000 square feet specifically for roses in 2003, and it added another 40,000 square feet in 2006, when Greenheart’s rose program began to really take off.
Now, Greenheart is embarking on an expansion that will double the size of its facility. General Manager Bill DeVor expects the construction of his seven new greenhouses to be complete by June 1.
“This structure was designed to increase our capacity and to fulfill our desire to automate,” DeVor says. “We’ll continue to grow roses, reclamation plants and new propagation projects in this structure.”
There are a number of reasons Greenheart chose this year to build. The biggest reason, DeVor says, is price. Greenheart is able to build its greenhouses for a fraction of the cost it paid for the original facility.
“It will actually cost us about 60 percent of the original price,” he says. “It took us two years in the beginning to do all of the research before we even got started. This time, we do not have any of that initial cost. There are also other things to take into consideration for the cost decrease.”
Good planning during the first phase in ’03 is helping Greenheart keep costs down. DeVor has been watching the difference of the dollar versus the euro, as well, and he’s noticed today’s interest rates are lower than they were in 2003 and 2006.
Labor savings is yet another reason Greenheart is building. When Greenheart launched its rose program back in 1998, it was producing about 1 million roses per year and relying on about 40 people.
“By investing in these types of greenhouses, we’re now producing 6 million roses per year with 12 people–and we’re going to 12 million roses per year. The systems are doing the work for us. We just have to manage the systems.”
For Greenheart, now clearly is the time to build. For other growers, DeVor advises others to heed his words.
“Right now, if you’re able to borrow money this is the best time to borrow since I’ve been in the horticultural industry,” DeVor says. “This time, you don’t want to miss. This is the time to invest in your facility.”