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Colombia: Cut flower care products

General information
Project location: Free Trade Zone of Bogota, Colombia
Consortium: Enhold BV, Pokon & Chrysal Colombia SA
Project Budget: Euro 1.4 million
External financing: 50% grant funding by PSOM
Project period: July 2006 - June 2008

Enhold BV, holding company of the Pokon & Chrysal group, will invest in the production of flower care products and provision of associated services in Colombia, through its recently established daughter company Pokon & Chrysal Colombia SA. It will do this in close cooperation with BAM SA, a distributor of agrochemicals for the floriculture sector of Colombia, and its Dutch daughter company Pokon & Chrysal International BV, which manufactures and markets plant and cut flower care products for the international market.

Colombia is one of the largest cut flower exporting countries, second only to the Netherlands. The business opportunity arose from developments in the international cut flower market, notably in the USA which is the principal export destination for Colombia’s cut flowers. Following the developments in the UK and other European countries, large retail chains in the USA are tightening their quality demands of cut flowers in terms of appearance and vase life. In order to supply this premium market, growers, bouquet makers and exporters in Colombia (and Ecuador) must therefore apply post-harvest care products to ensure consistent quality throughout the supply chain. P&C offers a post-harvest quality chain concept based on its lines of pre-treatment, conditioning and nutrition products. Production of P&C’s products in Colombia will avoid high costs of transport and import duties, to the benefit of the Colombian cut flower industry.

The purpose of the project is to establish a facility in Colombia producing the Chrysal flower care line for the floriculture sector and to provide technical services to growers, bouquet makers, transporters, exporters, etc. The project will assist the Colombian floriculture sector to raise to a higher level of quality, which will keep the sector competitive while meeting the increasingly stringent quality demands from large retail chains in the main export markets (notably the USA). At the same time, P&C will have a solid basis for increasing its business in Latin America; for the local distribution of its products, P&C will enter into long-term cooperation with BAM SA.

A rented building in the Free Trade Zone in Bogota will be adapted for the purpose of producing P&C’s liquid and solid flower care products, also in view of safety and environmental protection. Two production lines will be installed; one for liquid products for professional use and another one for solid products, packed in small sachets, for final consumer use. Production will be based on special premixes supplied by P& C International from the Netherlands, to which bulk ingredients such as dextrose are added.

A quality control laboratory will be set up, including a conditioned room for vase life testing and demonstration. Experts of P& C International will train the production staff in all aspects of production and the lab technician in conducting quality tests. Professionals of P& C International as well as P& C USA will train agronomy staff, together with staff of distributors, in advisory and quality control services to promote the proper use of care products throughout the post-harvest chain. A quality manual (“code of practice”) will be prepared and distributed. Research in the cut flower post-harvest chain will be carried out by P&C together with Ceniflores, the floriculture research centre of Asocolflores, the Colombian association of flower exporters.

Within the PSOM project phase, at least 22 new staff positions will be created at P& C Colombia. Within 2-5 years following the project, the direct employment is expected to increase to 35. Indirectly, local employment and income will be generated during the project and thereafter, mainly through its contribution to better performance of the cut flower sector, benefiting from access to premium export markets, which would be basis for new investment in and expansion of Colombia’s floriculture. The project is fully supported by Asocolflores.

Follow-up investments will be invested shortly after the PSOM project phase, in extra machinery for production expansion and diversification and the purchase or construction of an own building.

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