The Russian demand for greenhouse vegetables has increased so much in recent years that despite the growing domestic area, the import also grew. Over the next few years around 2000 hectares of greenhouses will have to be built with subsidies. The country will have to produce 1.7 million tonnes of greenhouse vegetables annually in 2020. Is this growth achievable? The Dutch greenhouse builders from Gakon, Certhon, KUBO and VB Group discuss.
According to the ministry of Agriculture Russi produced 615,000 tonnes of greenhouse vegetables last year. This is a growth of 6.5 percent compared to 2012. The area grew to 2.6 thousand hectares of greenhouses in recent years. This is still a lot less than the 4.7 thousand hectares that existed in the country during the Soviet regime. Those greenhouses are now old or have been torn down. Rapidly increasing costs against slowly increasing prices, limits in gas use and strong competition made bad future perspectives for growers. Parts of the Soviet Union that no longer belong to Russia were also important for the vegetable production.The Russian retail is also playing into the growing demand for controlled product. Magnit, the country's largest retailer, has been cultivation its own tomatoes, lettuce and cucumbers since 2011. 40 hectares was being worked last year. Another 20 hectares will go into product this autumn and at the end of next year the goal is 80 hectares.
The situation in Russia has changed. The demand for greenhouse vegetables is increasing in the country. In fact, it is increasing so fast that the growing area of greenhouses can't keep up with the demand. The import exceeded 1 million tonnes in season 2012/2013 - a growth of 8%. But Russia wants to be less dependent on import. Building greenhouses is being hugely subsidised by the government. Subsidies on energy costs, investments and special loans for building, renovation and modernisation of greenhouses and equipment are to lead to an area of 4.7 thousand in 2020 - as much as there was in the Soviet era. The production should grow to 1.7 million tonnes in 2020. This means another 2000 hectares has to be built over the next six years. Is this realistic?
Last year VB Group worked on a tomato greenhouse in Volvograd, Russia. The total project has a circumference of 25 hectares.
VB Group has realised various projects within the Russian Federation in recent years. "We have significantly widened our activities," says Edward Verbakel. "This means that we can catch the eventual drop out of the Russian market." He believes there is still and increase in the demand for greenhouse projects. "This shows that the countries within the Russian Federation are attempting to become more self sufficient." However, Verbakel estimates that a self sufficient Russia in 2020 is unrealistic.
KUBO also does a number of projects in Russia every year. "On the one hand there are the existing companies who grow new greenhouses on a conservative scale, often to replace existing, old greenhouses. On the other side there are
the investors who start up larger projects from nothing. These are usually our customers," says export manager Henk van Tuyl. Despite there being no direct sanctions against the import of Dutch greenhouses and systems, he still notices that the situation has changed. "Our customers are unsure about possible limitations in the near future," according to Van Tuyl. "The rate of the rouble has also decreased over the last few weeks and the interest has gone up. This means decisions are being postponed and there are companies who are considering going back to Russian manufacturers. Dutch banks are also taking no risks and, for instance, do not want to give confirmation on Russian banks' LC's until further notice. This all makes our activities more difficult."
In February 2014 the first Russian Ultra-Clima greenhouse was opened. The concept by KUBO has a unique climate control, among other things.
Is the growth of the area and the eventual self sufficiency a realist picture of the future? Van Tuyl can see that the planned growth is not being reached at the moment. "Partially because starting new projects takes longer due to the bureaucracy. Getting the needed financing is also difficult. It is estimated that 100-150 ha of new greenhouses were built in 2013, but around half of this is probably to replace existing greenhouses that are being demolished. Around the same is expected for 2014.
"Russia is a country with a lot of growing potential and an important market for us," says John Lagerwerf of Certhon, speaking about the company's various projects. "But our sales strategy is consciously divided over various continents." He notices that there is a need for complete parties in Russia, in which all aspects are realised by one party. An example of this is a project that is being built in Belgorod
at the moment. "Even the planting materials are from the Netherlands. Similar projects are perfect for us, as we have everything they need." Over the last few weeks it has become more difficult to do business in Russia due to the boycott. Lagerwerf also says Russia's plans for 2020 are ambitious. "But in this is a challenge for us, and other Dutch companies."
Last year Certhon started building a project in Belgorod, Russia. The planting material for this project also comes from the Netherlands. On the right the contract for a new project in Russia is being signed during the last GreenTech in Amsterdam.
Pieter van Berchum of Gakon is also active in Russia. "Not directly, but through partners," he says. Characteristics of the sector are the large scale. "Formerly for tomatoes, cucumbers and peppers and in part also for the propagation of plants. Russians buy State-of-the-art products." Van Berchum also notices
that there are a lot of plans and initiatives in the country. "But it takes a long time for any
thing to actually be done. It takes years." Gakon has not noticed much of the sanction so far, but the company is worried about them. "We expect disadvantages in the near future."