CHC Agriculture: Selling flowers in China

Club China member Nic Pannekeet came to China in 1994 planning to set up an export-geared production facility. Once arrived, he realised great sales potential was locked in the Chinese market itself, with great opportunities to sell – for example – flowers in China. Today, Nic oversees CHC Agriculture, a prime domestic supplier of roses located in Kunming.

Nic Pannekeet spent a couple of years in China before he met Arie van den Berg, owner of Netherlands-based plant nursery Van den Berg Roses. CHC Agriculture, the CHC Group subsidiary that Nic is responsible for, concluded a joined venture with Van den Berg Roses; the two are now domestic supplier of premium quality flowers in China. Nic: “Arie takes charge of the know-how necessary to grow flowers; I add almost two decades of experience doing business in China. Together we own a 15-hectares plant nursery, 10 hectares of which are designated for roses, the other 5 we employ to cultivate other crops. Our unique selling point derives from the large-scale investments and in-depth knowledge required to cultivate the high-quality flowers we produce. Our products speak to the top segment of the Chinese flower market.”

Business plan

“When I first came to China”, Nic recalls, “I was determined to learn the language. I enrolled at the lowest possible level and during the two years that followed, did little else than studying Mandarin Chinese at a university in Shanghai. An acquaintance told me I would be best off learning the language in Beijing. But because it quickly dawned Shanghai is China’s entrepreneurial centre, I knew this is where I had to be. I had no clear business plan at the outset. Along the road I tried several sectors, and stayed around as long as I could earn a revenue.”

Selling domestically

Staying with flowers, then, seems to have been the right decision for Nic: “During the cultural revolution the use of flowers was forbidden. Which makes generations from 40 and above have lost touch with this beauty of life. It is remarkable, however, how younger generations rediscovered flowers. Youth culture invariably invents reasons to celebrate, amplifies these reason using social media, and leads people to buy flowers for causes I could never have imagined. But fact is, our sales are disproportionally distributed; we sell in places where people’s dispensable income is highest. Of our total produce, 95 per cent is sold domestically, of which in turn 70 per cent is sold in Shanghai, Guangzhou and Beijing.”

Remaining a competitive player

Nic foresees the country’s shift from production powerhouse to consumer market have a significant influence on his short- and medium-term business decisions. “A lot is happening in China. Most of China’s climate is useless for plant nurseries or agriculture in general. I expect this given will increase demand for our location, the district of Kunming, which is one of the few places in China fit for agribusiness. On another level, it will be a challenge to calculate for our employee’s salaries – which rise by 10 to 20 per cent per year – and remain as competitive a player we are today.

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