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Russian Federation: Establishment of a modern growing facility for ornamental plants

General information
Project location: Pushnoe, Russian Federation
Consortium: Las Palmas International Trade BV, North West Flowers Ltd
Project Budget: Euro 750,000
External financing: PSOM
Project period: August 2007 - July 2009

Demand for pot plants is strongly growing in the Russian Federation. Import of full-grown pot plants is however expensive and risky as 10% or more of plants do not survive. Las Palmas International Trade from the Netherlands has been cooperating since 2002 with North West Flowers from St. Petersburg (Russian Federation). Las Palmas supplies a variety of young plants to North West Flowers, which in turn raises the plants for sale as pot plants to the Russian market. North West Flowers’ present production facilities (plastic tunnels) are inadequate to produce high quality pot plants, whereas production losses are high and efficiency is low. Growing conditions in the plastic tunnels cannot be optimally controlled, but investing in upgrading the rented premises is unattractive due to the uncertain tenure. North West Flowers and Las Palmas are jointly investing in the establishment of modern (glass) greenhouse facilities, training of staff and MPS certification of pot plant production on a new location.

The modern glasshouse will result in:

  • better quality of pot plants
  • shorter growing periods; more plants per m2 can be raised at lower labour and energy cost
  • reduced losses, from 15% presently to 5% in future
  • lower heating cost due to higher energy efficiency of glasshouses compared to plastic tunnels
  • lower cost of rent and labour at the new location.

Through the PSOM project, only 0.5 ha of glass houses can be developed but upon its successful completion, the partnership plans to expand the greenhouse area to some 3 ha.
Follow-up investment would concern the phased establishment of 2.5 ha. Moreover, where the initial production concerns ‘green’ pot plants, in future they plan to additionally invest in growing lights to produce flowering pot plants.

The PSOM project will increase the export by Las Palmas to Russia through its sales of young plants to the joint venture and through the sale of ready plants (that are not produced by the joint venture) to North West Flowers.

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