News on the Grow

January 16, 2002 - 12:24

Holmes to make home of OFA

After an extensive search process that began last summer,
the Ohio Florists’ Association (OFA) has named John R. Holmes, CAE, as
the association’s new executive director. Holmes will begin at OFA on
February 11, 2002.

Holmes brings 10 years of experience managing not-for-profit
organizations, including two years as executive director of the Alliance of
Indiana Rural Water; six years as vice president, legislative and political
affairs for the Indiana Health Care Association; and two simultaneous years as
executive director of the Indiana Health Care Foundation and government affairs
analyst at the National Association of Mutual Insurance Companies.

The incoming director has also consulted with the MD
Resource Group, Ind., an in-home testing service for obstructive sleep apnea
and with Network Staffing Resources, Ind., a temporary placement firm for
healthcare professionals who work with acute, long-term and home care
providers. Holmes also worked as a legislative assistant with the Indiana House
of Representatives for four legislative terms.

A graduate of Purdue University, Holmes has a law degree
from Indiana University and maintains an Indiana license to practice law. He
has earned the designation of Certified Association Executive (CAE) from the
American Society of Association Executives (ASAE) and association management
certification from the United States Chamber of Commerce’s Institute for
Organization Management.

“We are very pleased to have John’s record of
success in association management applied on OFA’s behalf at a time when
the industry and association face both opportunities and challenges,”
said OFA President Joseph Boarini, Grande Greenhouses, Indianapolis, Ind.
“Holmes’ strong management skills, focus on member needs and
association background will be important assets to the association,” he

Holmes is equally pleased to be joining the OFA team,
according to an OFA statement. “With the support of a visionary and
active membership, Dennis Kirven and the entire staff have taken OFA’s
leadership in the floriculture industry to a new level. I look forward to
continuing that tradition of success,” he said.


Maybe next year, GrowerExpo

GrowerExpo 2002, scheduled for January 16-18 in Chicago, was
cancelled in late December. Conference Manager Debbie Hamrick said
preregistration numbers were below expectations, presumably because of
September 11, the economic downturn and fear of traveling. Since growers were
hesitant to commit to attending, the organizers thought it unfair to exhibitors
to sponsor an event if attendance numbers were lower than anticipated. Growers
and industry members who preregistered for the conference will receive full refunds.
Hotel cancellations must be made directly to the hotel by calling (312)
464-1000 or (800) 325-3535; the organizers did not cancel hotel rooms because
some people also had plans to attend Mid-Am.


Home Depot to see more Lowe’s than highs in 2002

Not many will be surprised that despite a down economy, home
improvement retailers Home Depot and Lowe’s are poised to gain market
share in 2002. What may elicit a couple of raised eyebrows, however, is that
market analysts are expecting Lowe’s to pull customers from Home Depot,
according to a Reuters report.

While the retailers were hurt last year by deflation in
lumber and building-materials prices, both are expected to see sales growth
over the next six to 12 months due to a strong U.S. housing market. Patrick
Jeffrey, a Standard & Poor’s analyst who follows the retailers, said
the September 11 attacks led many people to travel less, devoting more
attention to the home; home purchases will therefore increase store traffic and
help the retailers increase market share.

According to Prudential Financial, Atlanta-based Home Depot
has an 11-percent share of the $472 billion home-improvement market, while
Wilkesboro, N.C.-based Lowe’s has a 5-percent share.

Barbara Allen, an analyst at Arnhold & S. Bleichroeder,
expects Lowe’s to take market share faster than Home Depot as it expands
to metro markets currently served by its larger rival. She said that many
shoppers find the soft lighting and neatly organized rows of products at
Lowe’s stores more visually appealing than Home Depot’s setup and
that sales at stores open at least a year indicate that Lowe’s may be
drawing customers away from Home Depot. Lowe’s, for example, posted a
4-percent rise in same-store sales, while Home Depot’s same-store sales
were flat during the 2001 fiscal third quarter .

While Home Depot has scaled back overall store openings to
about 200 a year over the next three years, Lowe’s is increasing
openings. Lowe’s plans to open 123 stores in fiscal 2002 and 130 stores
in 2003, mostly in larger markets. Home Depot has over 1,300 stores in the
United States, Canada and Mexico. Lowe’s has more than 740 stores in the
United States.

Jeffrey of S&P, echoing what many in the horticulture
sector have known since the big box-effect started decreasing margins, stated
that smaller players need to distinguish themselves in some other way from the
larger players. “It’s very hard for them to compete on
price,” he asserted.


Negative report smarts Kmart

“The next six months represent a critical time for Kmart,
and we would not be surprised if the company were to file Chapter 11 bankruptcy
if trends do not improve,” wrote Prudential Securities analyst Wayne Hood
in early January of the nation’s No. 2 discount chain. The New York Times
reports that Hood’s negative report, in which he urged investors to sell,
sent the price of Kmart’s shares plummeting 13.2 percent, a 20-year low.

Hood outlined 10 reasons that filing for bankruptcy could be
the next logical step for Kmart, including that the company could reduce its
tax liability and restructure or eliminate debt. The report also stated that
Kmart would have the freedom to close stores, reduce the number of advertising
circulars and make other “dramatic strategic changes.”

To add to the dubious outlook is the fact that Kmart’s
president and CEO, Mark S. Schwartz, led two other companies down the
bankruptcy path before arriving at Kmart, according to Burt Flickinger III, a
consultant with Reach Marketing in Westport, Conn.

A Kmart spokesperson insisted that everything at the company
is progressing normally. “Kmart has sufficient funds and available lines
of credit to carry out its strategies,” said spokesman Jack Ferry.
“We are seeing evidence of the long-term benefits of the company’s
strategy, including improved in-stock positions, unproductive inventory being
removed from the system, expense dollars being deployed back into the stores
and a senior management team that is changing the corporate culture to increase
accountability and responsiveness to the customer.”

Ferry also stated that additional advertising in circulars
benefited stores during the holidays, but Kmart’s sales did not meet
executives’ expectations for the month of December through the 29th. They
predicted sales would be flat or increase up to 2 percent compared to December
2000, but sales fell below even that.

The Hood report followed downgrades from the Moody’s
and Standard & Poor’s debt-rating agencies, which have questioned
Kmart’s ability to pay off its debt. Some manufacturers supplying
products to Kmart’s 2,000 stores have complained that the company is not
paying them on time or is seeking concessions on the payment terms. Many
growers can vouch for this statement, as sources have confirmed to GPN that
Kmart’s new policies involve payment delays of 120-180 days (for more
information, see p. 6 of the December 2001 issue of GPN).

The Times also reports that several high-level Kmart
executives have abruptly departed, including CEO Jeffrey Boyer, who left after
just six months on the job. Kmart’s new chief executive, Charles C.
Conaway, has been trying to reinvent the store as an important destination for
mothers eager to save on such products as apparel and shampoo, but analysts say
the chain’s image is “muddled”; that whether it is a place
for low prices or the trendy colors of Martha Stewart creates a problematic

Other analysts say that such negative conclusions are
unnecessary. “I don’t think it’s realistic to come up with
any definitive conclusions on the company in the middle of a recession,”
said Emme P. Kozloff, a retail analyst for Sanford C. Bernstein.


16 percent anticipate staff increases, decreases

According to a new Employment Outlook Survey conducted by
Manpower, Inc., a continuing slowdown in hiring activity is anticipated for the
first quarter of 2002. In a survey of nearly 16,000 firms among 10 industrial
sectors across the United States, 16 percent of respondents expressed intention
to increase employment during the first quarter; another 16 percent, however,
said they anticipate staff decreases. Sixty-one percent will remain unchanged
and 7 percent are uncertain.

These results are considerably lower than those of the
first-quarter 2001 period, when 27 percent said they would add workers, 10
percent foresaw cutbacks, 58 percent planned no change and 5 percent were
undecided. In August 2001, 24 percent expected to recruit further, 11 percent
intended to decrease staff, 60 percent planned no change and 5 percent were
uncertain. The report did not reveal whether or not this slowdown occurred as a
result of September 11.

According to Manpower Chairman and CEO Jeffrey A. Joerres,
the figures approximate those of the recessionary years of 1982 and 1991
— historical lows in the survey’s 25-year history. p

The study is broken down into regions. In the Northeast, it
has been a decade since firms in the region were so pessimistic, with 15
percent anticipating hiring increases, 59 percent expecting no change, 17
percent intending to decrease staff and 9 percent uncertain.

The Midwest has not seen such malaise since the outset of
the 1980s, when the first quarter outlook was negative for four years. Nearly
all industries reported plans appreciably lower than those of the third quarter
of 2001 or the year 2000. Of those interviewed, 15 percent expected an increase
in new hires, 64 percent anticipated no change, 17 percent planned for a
decrease in staff and 4 percent were uncertain.

Not in 25 years has the South seen such a bleak outlook as
that revealed by this survey. Fifteen percent expected to increase staff, 64
percent anticipated no change, 15 percent intended to decrease employees and 6
percent were uncertain.

The aggressiveness, particularly in the information
technology sector, that had fueled a two-and-a-half-year period of employment
prosperity in the West, has vanished. Despite this, however, the West remains
the most optimistic among the regions, with its anticipation of hiring new
staff at 18 percent; unfortunately, all industries in the region also expected
to decrease staff by 18 percent. Fifty-three percent planned no change and 11 percent
were uncertain.


Nintendo and S&G pick Pikmin

Strategic partnerships are taking interesting turns these
days. S&G Flowers/USA, in a co-venture with Nintendo of America, is
marketing their new flower variety Bacopa ‘Cabana’ as “The
Pikmin Flower” through channel partner Proven Winners. Pikmin is
Nintendo’s newest action-strategy game developed for their new game
system, Gamecube. According to S&G, the Pikmin characters look like the
real-life Bacopa Cabana’s round, white flowers with yellow centers.

The Pikmin video was launched on December 3, 2001, and the
Pikmin Flower will be available to gardeners and video game enthusiasts the
first half of 2002. The flower boasts more blooms and larger flowers than
competitive varieties, as well as greener foliage, better branching and
increased vigor.

Nintendo Co. Ltd., Kyoto, Japan, manufactures and markets
hardware and software for its popular home video game systems. The systems
include Game Boy, Nintendo 64, Game Boy Advance and the Nintendo Gamecube.

Syngenta is a world-leading agribusiness headquartered in
Basel, Switzerland. Its global flower brand, S&G Flowers, is based in
Enkhuizen, the Netherlands, with breeding and distribution facilities on every


Hines helps September 11 efforts

Hines Horticulture, Inc., Irvine, Calif., donated $128,500
to the Red Cross Disaster Relief Fund during the 2001 holiday season to assist
in September 11 relief efforts. The donation represents a pledged percentage of
Hines’ October sales. “We are tremendously happy to be able to
contribute these funds to such a worthy cause,” said Steve Thigpen, Hines
chairman and C.E.O. “The magnitude of the September 11 tragedy has been
felt by all of us at Hines, and we hope that our contribution can help the families
who were directly affected by the event.” Thigpen also encourages the
growing industry to follow Hines’ lead.


Dragging feet end duty-free

The Andean Trade Preference Act (ATPA) expired at midnight
on December 4, 2001. As legislation to renew it was not finalized before the
expiration deadline, the ATPA is now a thing of the past, WF&FSA and SAF

The ATPA was signed into law in 1991, and gave the four
Andean nations of Colombia, Ecuador, Bolivia and Peru trade benefits including
the ability to export flowers to the United States duty-free. The Act was
designed to help those nations fight drug trafficking by bolstering local
economies and encouraging production of legitimate agricultural crops.

As of 12:01 a.m., December 5, 2001, importers of record in
the floral industry must now pay duties on flowers imported from Colombia,
Ecuador, Bolivia and Peru. Duty amounts are 6.8 percent on roses, 3.2 percent
on miniature carnations and 6.4 percent on all other flowers. Importers of
record will have to pay duties until Congress acts to renew the ATPA.

At this time, there is no mechanism in place to bring
flowers into the United States duty-free. A Á program called the
Generalized System of Preferences (GSP) that would have enabled certain
countries to apply for duty-free status expired September 30, 2001.

Legislation to renew the ATPA and GSP is included in the
economic stimulus package being debated on Capitol Hill. Congress is discussing
whether to renew the ATPA for six months or fully renew the pact for another
five years. Although the House approved a renewal bill on November 16,
disagreements developed in the Senate over other products included in the pact,
especially two “T” items — tuna and textiles. Those
disagreements and others kept the ATPA from being renewed before it expired.
ATPA renewal is a priority for the Bush Administration, and there is strong
bipartisan support for it on Capitol Hill.


Thrips resistance through promoters and inhibitors

Plant Research International, Wageningen, the Netherlands,
has initiated research on whether the incorporation of protease-inhibiting
genes can lead to thrips resistance in chrysanthemums. This follows thesis
research for the University of Wageningen completed by Seetharam Annadana, a
Plant Research International guest staff member from India, who developed new
techniques permitting the genetic modification of two-thirds of the available
varieties of chrysanthemum. Annadana also identified better “promoters,”
or genetic switches, that ensure that genes incorporated into the
chrysanthemums will be sufficiently active.

Researchers hope to develop chrysanthemums resistant to
insects, especially thrips, with the help of this technology. Presently, thrips
damage can only be adequately prevented using chemical pesticides;
consequently, various ecological practices cannot be applied. The development
of thrips-resistant chrysanthemums would mean using far less chemical pesticide
— or even none at all.

Annadana investigated what type of genes could be used to
make chrysanthemums resistant to thrips, discovering that genes encoding
protease inhibitors — the substances that inhibit the activity of certain
Á enzymes in thrips’ digestive tracts — might be suitable. Many
plants create protease inhibitors naturally when attacked by insects. The
researcher tested the effectiveness of various inhibitors and found that egg
production was reduced by as much as 50 percent.

Van Den Bergh promoted

DeVroomen Holland Garden Products recently announced that
Roland Van Den Bergh has been promoted to executive vice president. He joined
the company three years ago and has been successful at running daily operations
in the United States. Roland previously worked for KLM Airlines (cargo) for 13
years and brings significant experience and a strong background in logistics
management. Having married into the Rademaker family (a bulb propagator in the
Netherlands), he has firm roots in the bulb industry. He also contributes a
passion for the business and a keen management ability that will help guide
DeVroomen into the future.


No bananas, just fresh flowers and international

Dole Fresh Flowers recently obtained ISO14001 certification,
a third-party certification administered by SGS International Certification
Services, making the company the sole ISO14001-certified international grower
in the world. This certification ensures that the company has an active
environmental management system covering all activities in bouquet production
and flower production processes, as well as postharvest packing houses,
integrated and disease pest management control, labs and service areas.

To qualify for this certification, according to Vice
President of Operations Moises Croitoru, Dole was first required to comply with
a series of strict national laws and regulations dealing with environmental
controls. This includes preservation of natural resources, minimization and
control of residues or solid waste, controls to prevent airborne contamination
and utilization of only crop protection products permitted by the EPA, European
Union or any country where they operate.

Croitoru also said “we have strict systems in place to
preserve human health and prevent accidents or health-related diseases associated
with labor conditions in everything we do.” Doles urges its suppliers and
contractors to comply with ISO14001 regulations and will not continue to work
with companies that are not following rules.

Any company reaching this high level of certification is
required to abide by certain procedures. These include: informing employees at
all levels about the labor and environmental rules and regulations; ensuring
that all workers and processes involved are documented; monitoring by external
auditors who go to the fields and interview workers to determine if rules are
followed all the way through the labor chain; and ongoing monitoring by
external auditors who survey the operations for initial certification, followed
by a six-month check-up.

Dole Fresh Flowers operates more than 21 flower farms with
11,000 employees, and opened a new, state-of-the-art facility in Miami, Fla.,
on December 15, 2001. Contact information for the new facility is: Dole Fresh
Flowers, 10055 NW 12th Street, Miami, FL 33172, (800) 333-1223 (phone), (305)
591-2081 (fax).


CCFC elects new representatives, announces Open House

The California Cut Flower Growers’ Commission recently
elected five representatives to the CCFC board of commissioners. Leendert
DeVries of Sun Valley Floral Farms; Ron Obertello, Jr., of Obies Floral; Hans
Brand of B&H Flowers; Dan Vordale of Ocean View Flowers; and Bob Mellano of
Mellano & Company were each elected to three-year terms. Board Alternate
Wilja Brand of Brand Flowers was appointed by the Commissioners to complete the
term of John Murphy, who moved out of state in 2001.

Rounding out the board of commissioners for 2002 are Fred
Matteson of Silver Terrace Nurseries; Kirk di Cicco of Watsonville Nursery;
Andy Matsui of Matsui Nursery; Anthony Vollering of Sunshine Floral; Fred Van
Wingerden of Pyramid Flowers; Bob Echter of Dramm & Echter; and Steve Siri
of Glad-A-Way Gardens.

Commissioners elected Bob Mellano to a third term as
chairman of the board at the winter 2001 board meeting in Pismo Beach, Calif.

There are 13 seats on the CCFC board of commissioners
— 12 elected grower seats and one appointed member-at-large seat. Board
members actively serve on CCFC committees and set policy for the direction of
CCFC programs.

In other CCFC news, the industry’s second annual
statewide California Flower Growers’ Open House has been set for July
2002. Cut flower growers are offering $100 product rebate vouchers to each
preregistered company that visits their facility during the July 8-10 and 14-19
self-guided open-house program. The Open House dates surround the Fun ‘N
Sun Convention, which will be held in Santa Barbara, July 10-13, 2002.

Open House registration materials will be mailed to
qualified wholesale and mass-market buyers after Valentine’s Day. While
there is no registration fee, all buyers must preregister.


Cool osteospermum

Ohio State University horticulturists have found that cool
temperature treatments may be the key to successful greenhouse production of
South African-native osteospermum, which are gaining popularity in the United
States as ornamental plants. Vernalization, which involves subjecting plants to
temperatures between 35-45° F, promoted and synchronized flowering,
increased flowering times and reduced overall stem growth in OSU’s
research. This technique eliminates the sporadic flowering or nonflowering
limitations osteospermum growers were facing by relying on day length to
control flower development.

According to Jim Metzger, a horticulturist at OSU, while
osteospermum will flower without vernalization, the time it takes is both
lengthy and erratic. Cold treatment provides growers with a product they can
produce more quickly and cheaply — increasing flower time means shipping
out product faster, and only heating the greenhouse five degrees above
freezing, rather than 65-70° F, means savings on energy costs.

Osteospermum is considered a weed in its native region, but
is becoming more popular in the States because of its diversity in flower
color, petal and foliage shape, and its full display of flowers. This wild
daisy is related to such plants as the Cape daisy, also a South African native,
and the Freeway daisy, predominantly grown in California. Typically planted
mid-to-late spring, this annual will produce flowers that last through summer
and rebloom in the fall.

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