Dutch Growing Media Industry Faces Rising Operational Pressures as Middle East Conflict Enters Third Week

VPN, the Dutch trade body for potting soil and substrate manufacturers, urges the Dutch government to take action to ease the impact of rising fuel costs, warning that transportation and logistics expenses will soon push up prices in the growing media market.

VPN director, Han de Groot, has voiced concerns over soaring road and sea freight rates, emphasising the growing impact on potting soil and substrate businesses. He says that products that require oil/energy, such as fertilisers and greenhouse plastic sheeting, are also becoming more expensive.

VPN asks the Dutch government to step in and introduce measures aimed at limiting the rise in fuel prices.

Since the US and Israel first has launched an attack on Iran on 28 February, there is currently, and likely to be for some time, great uncertainty about in the length of the war in Iran, and its disruption and costs. The Middle East conflict has a major impact on international business, including growing media manufacturers.

De Groot says, “Naturally, one of the Dutch government’s first thoughts was  to bring back Dutch nationals stranded in the Middle East. This includes preparing expat employees for repatriation.

“At the same time, petroleum, diesel, and gas prices have been rising rapidly, and the war is also affecting the production cost of horticultural substrates.”

To ensure the safety of crew and cargo some ships re-route as a precaution. Considering that logistics costs and energy sometimes account for more than 50% of the production cost, De Groot says the consequences for the growing media industry are far-reaching.

Both the supply of bulk raw materials needed for horticultural substrates and the transport of bagged and bulk substrates for end users are concerned. In the transport industry, profit margins are too tight for firms to absorb further financial pressure. So, eventually a fuel surcharge will be passed on.

De Groot comments, “Sadly, history has learned that disruptions to maritime shipping and container rates often are long-lasting in duration. Significant surcharges are already being applied to sea freight. It is expected that even if the war were to end in the short term, it would have a lasting impact on rates. Energy prices are also extremely volatile and can change from one day to the next.”

The energy price shock comes at the busiest time of year for the horticulture industry with the the first six months of the year contributing the majority of sales. Meanwhile, huge supply constraints on raw materials continue.

VPN advises the buyers of horticultural substrates to discuss in the market situation with their supplier.

VPN, or Vereniging Potgrond – en Substraatfabrikanten, is the leading industry body that represents over 98 per cent of the Dutch growing media industry, making it a pivotal player in shaping the industry’s future.

VPN members are manufacturers and traders of growing media, raw materials such as peat, rockwool and non-peat substitutes such as coir, wood fibre, and green compost. These materials include the internationally operating and certified top-selling brands in growing media: Bol, Kekkilä-BVB, Cultilene, Dutch Plantin, Freepeat, Grodan, Intervema, Jongkind, Klasmann-Deilmann, Legro, Lensli, Megaa Substrates, Pokon Evergreen, Primasta, Van Egmond, and Van der Knaap.

All VPN members have earned RHP Horticulture certification, the Dutch certification scheme for substrates and raw materials.