Landgard and FloraHolland investigating joint-venture auction company: Towards a single strong floriculture auction in the Euregion

AALSMEER/HERONGEN, 9 July 2009 (press release) - The FloraHolland and Landgard auctions are looking to combine the auction operations (‘clocks’) of Landgard (Herongen and Lüllingen) and FloraHolland Venlo. The two organisations made the announcement today at a joint press conference in Herongen (Germany). Both companies have signed a declaration of intent to form a joint venture based on further review. Preliminary research by both organisations presents a positive image of market potential and operating results in the event auction operations are bundled in the Euregion. The coming period will see further investigation into how auction operations can be merged at the Herongen location. Current auction turnover of the three locations is more than € 300 million in total.
Merging the clock operations of Landgard (Herongen and Lüllingen) and FloraHolland Venlo is intended to result in a single strong, internationally oriented marketplace in the Euregion. A single strong clock operation within the FloraHolland network contributes to reinforcing the position of marketplace users in Herongen in Germany. This applies to members/suppliers as well as buyers. Synergies can also be achieved. Plans for cooperation comprise only the auction operations of both organisations. The aim is to move from three auctions to one at the Herongen location.

The most significant arguments for cooperation are in the region itself. Growers have long sought to concentre supply in the Euregion area. Concentration is expected to result in better alignment between supply and demand, hence more stable pricing and reduced costs. Concentrating auction operations in the region gives auction buyers a broader, more attractive range of products and services.

A single strong floriculture clock will result in lower costs in terms of business operations and in the supply chain for both suppliers and buyers. The combination of all these factors ultimately helps increase efficiency and strengthen the floricultural cluster in the Euregion.

The basic principle is that the new Euregion auction will fit seamlessly into the FloraHolland network. The cross-border merger of auction operations requires a certain amount of effort. A new organisation must be set up. Efforts must also be made in terms of ICT and logistical infrastructure, finances and buildings. Consequences for personnel are also part of the investigation.

A final decision on the joint venture is expected in the second half of the year, with the new auction able to start in the summer of 2010. The process involving competition authorities is part of the research. Until the joint venture is reality, both companies will continue their current operating method.