Complementary fields of greenhouse industry

By Habet Madoyan | October 2014

There is always place for growth: How the Dutch greenhouse industry has created opportunities to excel in complementary fields
According to the international trade theory, nations should have comparative advantages to compete in international markets. The advantages comes when a nation enjoys favourable conditions such as cheap raw materials, infrastructure, good climate conditions, etc. Specialization in one field (where a nation has an advantage) sometimes can result in the development of complementary industries. Favourable climate was one of the main reasons why the Netherlands became specialized in greenhouse horticulture. Meanwhile, specialization in the greenhouse industry has created a comparative advantage in another industry.
The Dutch greenhouse industry is a good example of how specializing in one industry allows knowledge to be accumulated and thereby create opportunities for the growth of subsidiary industries. With the growth of growing under glass the Netherlands has become the world leader in greenhouse technology. Specifically they are world leaders in the design and manufacture of greenhouse equipment and horticultural consulting. One of the most popular glass greenhouse types is called Venlo after the region where it has originated.
Today Dutch companies are the most innovative in greenhouse design which has allowed them to become world’s leaders in the following major fields:
  •          Energy saving: energy is the biggest component in the cost structure and efficient running of any greenhouse.
  •          Environmental friendly technology: Decreasing CO2 emissions and becoming a source of energy for the local community.
  •          Crop breeding: Innovations in this field result in produce with higher yields.
  •          Use of geothermal heat as an alternative
  •          Consulting in design, construction, education and crop management
With the rapid development of the greenhouse industry in the developing world a huge need has arisen for trained professional staff. Taking into account that there is a need of 10 horticultural professionals per 1 ha of greenhouse then human resources becomes a key factor of success in the industry. The Netherlands, with its developed educational system, provides specialists from the earliest stages of greenhouse operation with training of the local staff, etc. The University of Wageningen UR is the leader in horticultural education, offering Bachelor, Masters and Ph.D. programs in Greenhouse Horticulture. The University is ranked as the number one educational institution in the Netherlands (International Student Barometer, August 2012) and number four in Europe. About 50% of all their students come from more than 100 countries.
Being close to the innovation centres, accumulated knowledge and expertise of the leading manufacturers of greenhouse equipment give Dutch consulting companies a distinct competitive advantage in the world horticulture industry. These consulting companies provide services to all corners of the developed and developing world in the following fields:
  •          Preliminary and detailed design of the facility. At this stage the master plan of the greenhouse is created, the preliminary OPEX and CAPEX are calculated and the plant structure is determined.
  •          Negotiations with suppliers: Dutch consulting companies take care of the negotiations with different suppliers by writing the RFPs and ensuring competitive bidding. The companies maintain that on average their consulting allows the developers to save around 15-20% of the construction costs.
  •          Overseeing construction process.
After the construction phase, provide services in sourcing professionals and organizing on-site and remote training to develop local capacities.
During the first year of greenhouse operation, provide consulting services with on-site visits by horticultural specialists as well as provide remote control and monitoring of the new greenhouse facility.
Today the Netherlands is the leader in greenhouse manufacturing. Dutch companies offer turnkey solutions for the rest of the world. For example, Dutch greenhouse manufacturing company Dalsem is the leader in production of Venlo style glass greenhouses. The company offers turn-key solutions in building a greenhouse that includes: manufacturing of the glass greenhouses, installation and on-site construction supervision, co-generation systems and computerization of the production process and so on.   In some cases, manufacturers can offer comprehensive consulting services by their own means or through subsidiaries.
The Netherland’s greenhouse manufacturing is a good example how the development of one industry accumulates knowledge and expertise that allows complementary fields to excel. However, this would not be possible without a developed Innovation system and co-operation between the market players.
Dutch leadership in horticulture/floriculture solutions and consulting is due to the developed greenhouse industry. For decades the Netherlands has been the leader in the international trade of growing cut flowers, pot plants and vegetables in greenhouses. In 2012 Netherland’s share in the world export of cut flowers reached 57.6%. They are also the leading exporter of vegetables too with for example 24% of the worlds export tomato market.
Currently the Dutch greenhouse industry covers about 12,000 ha which is in the open-air.  The Greenhouse industry is concentrated in 6 clusters called Greenports. About 7,000 ha are located in the Westland region (mostly vegetables), 4,000 ha in Aalsmer, with the rest concentrated in Venlo, Emmen, Noord-Holland, etc.
As Dutch growers recognized a potential threat from producers in countries with a better climate, they started a process of internationalization. They established production facilities in Africa, Latin America and China. However, even with this process, the Dutch greenhouse cluster keeps its role as a centre of innovation and new solutions for the whole industry.