Market Vision February 2022
These are challenging times. Times in which demand is unprecedented, as are volumes. And times of scarcity: the availability of raw materials and machines is no longer a matter of course. We, as a sector, are all having to the deal with this. All over the world. What does this mean for us and to our customers? And what can we expect for the future?
In conversation with Wouter
We will be discussing this in a conversation with WouterZieck, Director Sales & Marketing at Desch. How does Wouter see the future? Can we face the challenges, and if so, how? And...what is his advice for the professional horticultural sector?
Would you rather read the interview?
Hello and welcome! My name is Ruth and I’m here today at Desch plantpak. I’m going to talk to Wouter Zieck who's the director of sales here at Desch. So, Wouter… thank you for having me.
Thank you very much for being here.
Yes! thank you. So, let's dive right into it. How has the past year, year and a half been like for you?
Very exciting to start with, and also very challenging. We started out directly after covid with less demand then before, which we expected. But then all of a sudden, everybody started to buy big quantities of our product. Which let to actually an over demand of products, more than we could deal with. So yes, in that view it was quite a challenging year. So, demand has been at an all-time high for you right now at this moment.
Does that create any challenges for you?
It absolutely does. What you see happening is; normally we work from stock, we produce our products, we put them in stock and supply the growers from our stock positions. And if you sell a lot more than you usually do, you don’t get the opportunity to build any stock positions. So, we are more and more producing directly for all our sales. Which is really a challenge, because we have a limited number of machines, and we have a huge variation of tools.
So, is it possible for you to scale up in this situation? Do you have enough materials to use?
That’s a very good question, because material is the basic challenge that we have right now. Uhm, the world has changed a-lot in the past year and a half, two years
Recycling materials, what we basically use, 95% of our products is based on recycled materials, is getting more and more difficult to obtain.
And the reason for that, is that throughout the world we see that more and more industries, start using recycled materials. instead of virgin, virgin that’s new material, prime material. Which was not so much in supply, especially in 2020. So, they had to look elsewhere, for different types of products. They found recycled product as an opportunity to deal with that. And now they are used to that, so we don't see this situation coming back, where we get to buy all the good recycle materials.
So, are you still able to deliver everything on time?
No, we are not unfortunately. What we see happening in the market place is that, those always ordered at the latest moment. Dutch growers were to order today, get delivered tomorrow. Now they need to order half a year in advance, in order to get the product. And then still it it's a question, are we really able to do this.
And it’s not just Desch.All the industry, the total industry. All our competitors as well. They are being faced with the same challenge right now. And it's not just the raw material, it's also the machines. If you want to scale up in order to answer to the increased quantities of the market. You buy a new machine; the machine has a lead time. The lead time can be anywhere from half a year, to a year depending on what you order.
And we see that the lead times are being stretched based on: they can’t get the metal to build them, they can’t get the electronics to build them, etc.So, that's also a challenge.
We try to scale up by sourcing new materials everywhere. New material as in, new recycled materials. We try to buy additional machines, they don’t come or they come later. They have a knock-on effect on our production schedules and or on our production planning and thus on our supply to our supply to the grower.
Do you think that you can overcome all these challenges, is there a silver lining in all of this?
Off course there is a silver lining to it! The demand is good, we are in a new situation right now when it comes to sourcing materials. We have found new sources in the market. We are able to upscale also in that quality is still an issue.
We are upscaling in terms of machines, and we are also upscaling again in type of recyclability of the product, which is a huge topic in the market place. We used to do a-lot of black pots, pots that could not be recognized in sorting of recycling units.
Now we use the Detectable material in the recover pots, that can be recognized as such, recognized for what they are. And we can get the materials back, we or other suppliers in order to make new products out of them.
That’s a wonderful system. It creates a nice loop where the material that you use can then be feed back to you in order to be reused.
Yes, like I said, feed back to us or to other suppliers but at least the material can be taken back from the waste stream, so that it can be used for a new purpose. And the good thing is that we have two lines, D-TectPlus based on post-industrial waste, and we have Recover material that's based on post-consumer waste. So, what you throw in the bin at home, we sort it, it will be washed and will be made available for new production. And we call that one recover. We managed to get a very good contract for the years to come in order to obtain enough material to make those products.
So that’s a big step ahead!
So, in these times of challenges and COVID, do you have any advice for the growers?
Yes absolutely! Be on time with your orders, don’t wait until the last moment to order your product. Because If you do so, there is really the risk that you don’t get your product in time. Not just with Desch, but with all manufacturers. Yes, I can understand that this is a nationwide, even an international issue right now.
So, thank you for having me, and thank you for explaining the situation as it is in this moment.
Thank you. And thank you for watching this video about the latest developments here at Desch.