'n Ekonomiese analise van die potensiaal van Sutherland as verbouingsarea vir die uitvoer van tulpbolle na Nederland
Thesis (MComm (Business Management))--University of Stellenbosch, 2005.
Tulips are the second largest floral commodity that is traded globally. Currently Holland controls half of the 20 billion Dollar tulip bulb market, although immense pressure from European institutions may serve to change this phenomenon in the near future. Not only do increasing labour costs and stricter legislation on the usage of pesticides impair this industry, but the Dutch government also places huge pressure on its own producers to convert scarce agricultural land into residential areas. These conditions could therefore provide a possible market opportunity for farmers from other countries. Due too the fact that the price of tulip bulbs is based on the size of the flower and the length of the floral stem, floral farmers generally gain an extra 2-3 cm stem length via physically cutting it out of the tulip bulb. Therefore, floral farmers annually destroy their whole supply of tulip bulbs, resulting in a need to reacquire bulbs from bulb growers. Due to the fact that the lifespan of cut tulip flowers is generally not more than seven days, Dutch land rezoning ought to result in tulip bulb production being the production component which could truly be relocated in a global context. In this study, an economic analysis is therefore conducted to ascertain South Africa’s potential to produce tulip bulbs in order to supply the growing demand in the Netherlands. Information was gathered by performing a literature study of existing literature and by conducting structured interviews with numerous experts in their various fields of operation. Due to the fact that expertise in South Africa was very limited, a large number of interviews were scheduled with experts from Holland and Germany. The presence of strict non-disclosure contracts resulted in a situation where interviews had to be conducted with individuals who are two to three levels removed from any relevant tulip organisation. The study was conducted through first analysing the global market from a horticultural perspective and thereafter from an economic-logistical stance. It was established that tulip bulbs are very temperature sensitive and therefore have to be produced far from any tropical zones. Since Sutherland’s winter temperature is similar to that of Dutch production areas, South African tulip bulbs could be planted in Holland. The difference in seasons of production allows farmers from the Southern Hemisphere to predict the extremely fashion sensitive market in one year less. Via moving production activities between alternative hemispheres, off seasons can be utilized for production, which could result in fashions being predicted with a greater sense of accuracy. If unfashionable bulbs are produced, a loss of up to R 34 129,87 per ha can be incurred, while mid-priced bulbs and fashionable bulbs can earn respectively R80 118,09 and R 122 626,57 per ha. Projections are however based on the prices of a bear phase where the market currently pays up to 75% less for bulbs than it did three years ago. The production costs in Sutherland could be cut by R 15 750 if it is decided to mechanise production but simultaneously this action will result in an increase of R120 000 in new capital equipment required. The use of 40 feet High Cube Reefers reduces transportation costs considerably and 1 042 437 bulbs with a circumference of between 10 and 12 cm can be shipped in such an container via utilizing South African produced SN 64190 crates and four way export pallets. Market penetration remains an important consideration since a farmer’s production history is very important in the international market environment. Partnerships, production of larger bulbs, organic production and seasonal production in alternating hemispheres, remain some of the most suitable techniques for market penetration.