In many cases, this changed market calls for service provision to be done differently than we always have done. This requires changes to the FloraHolland cooperative company: a renewed focus on service provision and a more efficient way of working on behalf of our members. Compass is a multi-annual plan to guide the changes that need to be made. It also charts a course whereby FloraHolland will be able to reinvent and reinvigorate itself as a service provider.
Developing FloraHolland Services
In terms of its services, FloraHolland will be concentrating more strongly on direct sales channels. The services developed will include both sales segment-focused ones (such as retailer and florist services) and virtual ones to restructure the marketplace and modernize clock sales. With the services it is developing for logistical solutions in direct streams, for logistical resources and for international financial services, FloraHolland is continuing to cater to the need to trade 24 hours a day.
Customized clock sales
The influence of virtualization increasingly allows for the disassociation of transaction, logistics and location. This provides for efficiency improvements for the large export flows. By exploiting these developments, FloraHolland is heading toward a Netherlands-wide approach to its auctioning. We are starting off this process by linking the Aalsmeer and Naaldwijk flower clocks together. The number of physical auction rooms will be reduced.
Increasingly, efficient selling of the clock supply requires completeness and reliability of grower information. Inspection by FloraHolland has therefore taken on a less important role. We are further developing 'self-inspection' and winding down the use of inspection as a standard FloraHolland service.
We are boosting the services we provide to smaller purchasers, such as florists and garden centers, by concentrating at our Naaldwijk location a "florists' clock", a web shop and all the support services that this target group requires. This throws open Naaldwijk's extensive assortment to them. To this end, we will move the Bleiswijk clocks to Naaldwijk.
The increasing operations in direct logistics (including for retail) carried out by chain parties based at our Bleiswijk location will remain supported there and will actually be extended.
A smaller, more decisive organization
In commercial terms, the selling of growers' products will become the reference point around which FloraHolland arranges its setup and services. Our people, knowledge and expertise will be integrally concentrated in two commercial departments: a Commercial Products Department and a Commercial Services Department. This way, FloraHolland can more closely match the way that member companies do business, so as to better serve our members.
The organizational setup will be streamlined and simplified. The number of managerial posts will be reduced by approximately 25 per cent.
For 2014, the above measures combined will mean the loss of approx. 200 full-time jobs. Unfortunately, compulsory redundancies cannot be ruled out.
The trade unions and the works council will be involved in the further measures. Operational management will have to continue to move with the times flexibly and continually, keeping up with the scale of change in clock sales volumes.
It is forecast that carrying out these measures will incur approx. €20 million in one-off costs. As provided for in the FloraHolland Articles of Association, the Cooperative Board intends to fund these losses out of the liquidity contribution. For the purposes of the forthcoming 2013 FloraHolland annual accounts, valuations of available legal rights to land acquisition will be scrutinized, and it is expected that approx. €10 million will have to be written off FloraHolland's equity.
These steps will ensure that FloraHolland can enjoy sound and future-proof business operations due to reduced costs, and that it can renew and reinvigorate the value it adds by its services to today's changed market.