Troubled raw materials market also affects the greenhouse horticultural sector

Troubled raw materials market also affects the greenhouse horticultural sector

Just as every sector has experienced the consequences of COVID-19, the same applies to the greenhouse horticultural sector. These effects were particularly noticeable in the Purchasing Department of Gakon Netafim.

For example, the aluminium price is more than one and a half times higher than last year. The steel price has also doubled, in addition to having to contend with longer delivery times. Where previously it was possible to count on 5 weeks delivery time, this has now become 10 weeks plus in most cases. And PVC and plastic are scarce and therefore hardly available.

“But the hardest part is getting horticultural glass,” says Peter van der Gaag, Head of Purchasing at Gakon Netafim. ‘‘The glass comes from China and has to deal with extremely long delivery times due to problems with transportation. This mainly applies to sea freight. But especially the high demand and the small supply make it difficult to buy glass.”

The small supply has its origin because of COVID-19. All factories that produce raw materials downgraded their production. They dismissed employees, people started looking for other jobs and the factories turned off the machines. Then, when the market picked up again and demand increased, those machines slowly started up again. Only then was there a staff shortage. The factories simply could not meet the demand.

“USA and China were the first to go back into production,” adds Peter. “All raw materials therefore also went to those parts of the world. Only when USA and China needed less, did it also come to Western Europe.”

Still, Peter foresees better times. ‘‘I hope and believe that prices for the horticultural sector will be at an acceptable level in April 2022. Then hopefully we can live with COVID-19 and the market stabilizes a bit again. Slowly but surely it will go in the right direction. Until then, we do everything we can to achieve the most favorable prices and delivery times for our customers.”