Renewing the acreage doubles yield at Floratom based in Hungary

Looking at the current facilities of greenhouse grower Floratom, based in Hungary, it is hard to compare them to the operations of five years ago. Throughout the last lustrum, the company renewed almost 25 hectares of older greenhouses into high-tech, automated, modern facilities. Today, these greenhouses grow tomatoes, cucumbers, eggplants, and a variety of peppers, including bell peppers, Palermo, and the traditional Hungarian white pepper. Balazs Szabo, who has been driving the expansion strategy, explains how this answers the demand from retail partners and responds to developments such as increasing energy prices and more extreme climatic conditions, which are becoming a structural challenge rather than an incidental one.

Renewal and expansion strategy
Floratom currently operates 31 hectares in total and stands as one of the four major greenhouse operators in the country. The company expanded with multiple new sites, including two recent 6.5-hectare projects—one focused mainly on peppers and another on tomatoes. In addition to expanding its acreage, Floratom also invested in a new packing hall and advanced automation systems. One-third of the production is sold domestically, while the remainder is exported to Germany, Italy, Poland, and the Netherlands. Floratom handles its own sales and logistics, with a dedicated team focused on building long-term partnerships and positioning the company as a premium supplier in the market.

Renewal and expansion
The renewal and expansion strategy started after a change in ownership five years ago and addresses the demand for replacing open-field-grown production with more safely grown crops. "We've seen the demand grow and also realized that by investing in new facilities, we could double the yield of the same acreage while keeping costs almost the same," Balazs explains. He illustrates this with concrete figures: yields increased from around 15 kilograms per square meter in older greenhouses to up to 30 kilograms in the new facilities in case of peppers.

And there's more. "Year by year, we see the climate changing. Three years ago, we had an extreme summer—10 days in a row above 40 degrees," Balazs notes, adding that such conditions are increasingly frequent. This was hard to cope with in the former facilities. "It's not just about optimizing the crop, but also about reducing losses and preventing outfalls. Thanks to the new technologies, we will no longer lose trusses in hot summers. In the end, the investments bring us much better revenue."

This is why the company invested in a complete technology package, including a double-screening system, extended irrigation with higher-capacity tanks and equipment, and significantly taller greenhouses—ranging from 6.5 to 7 meters compared to around 3.5 meters previously.

High-pressure fogging
Combined with a high-pressure fogging system developed by Dutch tech supplier MJ-Tech and installed by local partner Ditusz, these investments are designed to prepare the company for the next decades. Balazs explains this is key in dealing with hot days. The principle behind the high-pressure fogging, is evaporative cooling: the fine mist evaporates in the air and absorbs heat from the surroundings. The crop temperature will become lower.

Supported by MJ-Tech, the company also holds bi-weekly consultation sessions with Letsgrow.com to make the most of the crop and the possibilities with the new technologies. "In hot summers, it's about lowering the temperature, but together we can also find applications for the fog and increased humidity in the upcoming weeks, when temperatures are expected to rise."

Jurnjan van den Bremer of MJ-Tech adds that dialogue is important to maximize the system's benefits. "The benefits of the system outweigh the cons, but it can be tempting to overuse it for cooling, whereas we see that plants can handle higher temperatures in a more humid environment. With the support of Letsgrow.com, they will create a consistent growing climate optimized for the plants."

High energy prices
Another driving factor for the greenhouse investments is the high energy prices in Hungary. The company meets almost all of its heating demand with geothermal energy. One of the wells, approximately 1,500 meters deep, pumps water at 65–66 degrees, while the well at the most recent greenhouse produces water of more than 80 degrees from a depth of 1,800 meters. In addition, the geothermal water contains methane, which is separated and used in a gas engine to generate energy. "Combined with our solar panels, we expect we can move toward zero emissions in the future," Balazs confirms. "And it allows us to mitigate the high electricity prices that growers in Hungary have to deal with." This is also why the company is not yet working with LED lighting. "We work closely with our retail partners and would, of course, adopt it if it helped a partner, but it's not an investment that works without considering the entire chain."

At the same time, challenges remain. "For the next five years, labor will be one of the biggest issues," Balazs notes. "Not only availability, but also rising costs." Combined with increasing energy prices and relatively stable vegetable prices, this puts pressure on margins and further underlines the importance of efficiency, scale, and technology.

Premium player© FloratomIn the latest expansion, the plants went in in the middle of last month, and the harvest is expected to start in a few weeks. It's looking good, Balazs confirms — not only as a result of the investments made, but also because of how well those investments were thought through, with one final goal in mind: to be a premium player in the market. He explains this through the acquisition process of the young plants. "We can always go for low or intermediate quality to achieve a lower price, but the plant is the foundation of the project. So, like all the investments we make, we are willing to pay for quality, expecting to earn it back by offering shippers and retailers a premium product they are happy to work with."