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The benefit of an opposite climate: Flowers from Chile

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While Europe is checking her salt deposits and people are preparing for Christmas in the cold winter months, Chileans celebrate their holidays close to the beaches as summer is coming up now. But not before they have completed their harvest for the European market.

Besides the fact that the climate in Chile shows huge disparities within the country, spring season is a busy period for the companies that are active in the still modest floricultural export activities. South America always had the vertical trade routes burned into the mindset, but Europe has become an interesting export destination for flowers as well. Especially in the situation when the euro holds a better exchange rate to the local Peso (CLP) than the US dollar.

In 2010 and 2011 we see a significant increase in the amount of planted crops for floricultural purposes. Dropping margins on some fruits forces entrepreneurs to shift and spread their risks. This is why we see fruit farms having their ‘flower corner’ to investigate if this would be interesting for the future.

The largest farm with exclusively flower purposes there is in Chile is Agroaustral. Located in the south of Chile, they enjoy climate that is perfect to grow peonies and lots of other crops. CEO and owner German Barrientos has about 12 hectares of different products, which are sold in the local market, the United States and in Europe. To make sales in Europe feasible, a niche market needs to be available in order to start up the export program. Benefits and scale advantage in labour and production costs are not as big as we see in Africa, but the availabity of certain volumes of ‘out season’ flowers/varieties, creates opportunities. Barrientos chooses to work with FloraHolland in the European market, in a partnership with his Dutch agent. Barrientos: ‘I prefer to work through FH, because it guarantees me a safe, complete and well-informed insight about all aspects of sales and finances’
The future for Chile as flower producers depends on different aspects. Logistics and currency fluctuations remain important, as the scale of business is still small. Barrientos: ‘First and most important is that Chile is a stable country in political and economical sense. Secondly, Chile has a strong incentive to exports.
For flowers, we have different types of weather, which makes it special, because we can produce everything in one country. But we must quicken pace and find solutions to logistical problems as soon as possible, given the explosive growth of exports like salmon, fruit, seeds and flowers. It is working well in this line and we hope to resolve this as soon as possible, so we can meet clients as appropriate.’

The quality of his products looks heavy and carefully produced. Even tulips are grown, however mainly for the local market. Agroaustral will export mainly peonies to The Netherlands, but also small volumes of Alium.
‘Because of the geographical location of AA, we are working to produce and sell products that require a climate with moderate temperatures and low. The idea is to send different types of flowers to Holland and to maintain and improve the business in North America. I hope to continue working and improving every day.’

Source: FloraHolland News (10.12.2010)