Economy, Domestic Economy

Dutch Ponder Greenhouse Market

Domestic Economy Desk
The Dutch pavilion at Iran Green Trade Fair Exhibition comprises 17 companies active in floriculture and greenhouse industries.The Dutch pavilion at Iran Green Trade Fair Exhibition comprises 17 companies active in floriculture and greenhouse industries.

Keen on increasing market share in post-sanctions Iran, the Dutch pavilion with 17 companies active in floriculture and greenhouse industries, stands out at the 4-day Iran Green Trade Fair 'IGTF 2016'. The expo opened on Saturday.

“It’s been very busy and very positive. I have spoken to several Iranian local greenhouse builders with small and large projects and huge potential,” Wouter Heezen, sales manager at De Gier Drive Systems, Dutch manufacturer of greenhouse ventilation, screening and hoisting systems, told the Financial Tribune.

“[Iran] is going to be a big market. A lot is going on and the government is going to support investments,” he added. Opportunities in Iran’s growing greenhouse sector have kept Dutch companies on their toes.

Back in May, Aad Verbakel, founder of Dutch agricultural firm VB Group, signed a preliminary deal to build a 20-hectare greenhouse in Iran.

“This large-scale modern greenhouse complex, which will meet the need for local food and flower production, will be realized by VB Greenhouse Projects,” the Dutch firm reported on its website.

The greenhouse construction division of VB Group was active in Iran with several greenhouse projects until sanctions were tightened against Iran over its nuclear program. The contract was signed during the visit of a delegation of 45 companies led by Dutch Minister of Economic Affairs Henk Kamp.

While in Iran, the Dutch minister met with Iran’s Agriculture Minister Mahmoud Hojjati.

“The Netherlands is looking for long-term cooperation in agriculture. We are willing to collaborate in the cultivation, processing and later, export of Iranian fruit. The country has great potential for floriculture, hence the two sides can expand cooperation in the production and processing of flowers as well,” Kamp said at the meeting.

Iran has been working with Dutch companies to construct two other greenhouses, one in western Lorestan Province and another in the Aras Free Trade Zone in the northwestern province of East Azarbaijan.

Iran accounts for merely 0.3% of all the greenhouses in the world, according to Greenhouses, Medicinal Plants and Mushroom Department of the Agriculture Ministry.

Last year’s figures show there were more than 10,000 hectares of greenhouses under cultivation across the country. Officials say there is need to increase the land area to 48,355 hectares over 10 years.

According to First Vice President Es’haq Jahangiri, one of the main priorities of the government of President Hassan Rouhani in the current fiscal year that started in March is to develop industrial greenhouses. “This method of agriculture would help create jobs and conserve both water and soil,” he has been quoted as saying.

To tap into the drought-hit Iranian agriculture sector, some European companies have opted for forging partnership with Iranian and international companies.

“We believe that this [partnership] will put us in a better position to handle the challenges we face in Iran,” says Clement Nieus, Export Area Sales Manager at French greenhouse builder CMF Groupe, which is part of the Persian Growth consortium.

The consortium also features an Iranian partner Sepehr Fam Pasargad Company, which will work alongside two Dutch firms Codema, which specializes in irrigation and logistic systems, and Hoogenden, a provider of advanced automated computer solutions.

“Our aim is to be able to grow healthy vegetables with less pesticide. Also, what we’re trying to focus on is to save as much water as possible,” he adds.

> Looking for New Customers

Dutch companies are also eager to supply flowers, one of the Netherlands’ main exports, to Iran.

“We are here to look for new customers. Or for a distribution company who is willing to introduce us to smaller customers that are unable to import big quantities,” said Arjan Alkemade, sales manager of Dutch flower producer C. Steenvoorden B.V.

“We think this country has good potential,” he added. “We received lots of requests all over the year. Especially now that the markets are more open and the sanctions are lifted, we see a lot of interest in Iran. That is why we decided to participate in this event.”

The company says its exports have been growing recently, following a fall it experienced after the sanctions were tightened in 2012 over its nuclear program.

This comes as domestic flower producers often complain that the domestic demand for their products is not very impressive.

Some 60% of cut flowers produced in Iran are in excess of demand, according to the head of Iran Florists Union. “The domestic flower market is in a slump,” Akbar Shahrokhi says.

“The slump lingers on,” says Leila Ataie, trade manager at Saee Gol Tehran, which imports flower buds to supply domestic flower growers. “This is a limited market. There is no room for more suppliers.”

Per capita flower consumption in Iran is between seven and 10 flowers. The figure stands at 150 in Europe and 180 in Germany, which happens to be the largest consumer of flowers.

Iran accounts for close to 1% of all the flowers and ornamental plants produced in the world, but only 0.01% of the international market belongs to Iranian exports generating a meager $40 million annually.