When Life Isn't All Sweet
At first, all Florence had in her pocket was a diploma from the prestigious Economics Faculty of the Sorbonne and experience working in a sugar-trading company. In Russia, her “sweet” life continued. Through her efforts, a “river” of sugar flowed from Brazil, Thailand and Cuba to the Russian Far East. But having worked as a trader for several years, Florence realised that there was no way of developing further in this field.
“My financial partners and I decided to start our own business,” she recalls . “Having gone through a few ideas, we decided on cultivating roses which could be sold for a great profit. There are many imported flowers in Russia but very few roses produced domestically. It was precisely this area which I was interested in developing.”
At first, their business plan was based on mass production. The French visitors wanted to utilise three hectares and grow roses like those found, for example, in Kenya. But when Florence began to closely consider varieties of roses, she discovered that she did not want to do what most were doing. This, to her, seemed boring. She decided to grow only sweetly-scented roses, on one hectare, not three.
Straight away, she familiarised herself with the Moscow market. A large volume of sales was only possible in the capital. She began to look into demand. She asked about fragrant roses in the florists. Everywhere they asserted: “You shouldn't grow such roses, there is no demand for them, many people have allergies, you'll be ruined.” Flower-arrangers repeated: “Nobody likes fragrant flowers in Russia” citing lilies as an example with their “oppressive” smell.
“But I knew already that, in fact, with roses, it is the petals which smell, not the pollen. Jumping ahead, I will say that, later on, I never met anyone who was allergic to our roses! Therefore, I consider the findings of my market research in Russia to be complete gibberish.”
Once she set out to find land, Florence suddenly realised that Russia wasn't such a big country after all.
Once she set out to find land, Florence suddenly realised that Russia wasn't such a big country after all. Finding a place for a greenhouse wasn't that straightforward. “By then, I had lived in Russia for more than ten years, so I knew that travelling around all the outer Moscow farms saying: 'I'm a Frenchwoman and I want to buy some land from you' was completely useless. In such a case, prices would have gone through the roof, and production would have been pointless. I got to work, like a Russian, looking for land for sale through my acquaintances. They recommended Kaluga region to me. In the end, I bought a five hectare plot from a private owner in open countryside near to the village of Babynino. It's 200km from Moscow. There it is possible to have utilities connected – water and electricity – for a reasonable price.”
Setting up the business took 5.5 million euro of investment. Drawing up the necessary documentation was carried out by Irina, the Managing Director, who was working for the local authority. This, Florence is convinced, is beyond the foreigner unfamiliar with the mentality of local officials. In Russia everything depends upon unnecessary but obligatory expenditure. In one office, they issue forms and certificates, whilst in another they stamp them, and it all has to be paid for...
“Coffee Break” and “Extase”
Construction of the greenhouse commenced in the open countryside. In order to prepare an even area, three metres of earth was brought and spread over the virgin soil. They started to look for a bulldozer to flatten the ground, and it turned out that, at that time, all the equipment in the Kaluga region was being used for the construction of the Volkswagen factory...
Such were the realities in Russia. Originally, Florence was only prepared for solving organisational issues. As it happened, she had to become site supervisor and show the workers where to dig the pit under the waste-water system, how to arrange the drainage... And even guard the building materials so that they weren't pilfered.
Building work took almost a year and a half, twice as long as estimated.
“The building work took almost a year and a half, twice as long as estimated. To determine which varieties to grow, I went to an international trade-fair on the outskirts of Amsterdam. There they explained that there aren't that many fragrant varieties. Furthermore, the experts in Holland remonstrated with me: 'You can't imagine the kind of stink weed you'll get growing in the greenhouses. Nobody will be able to work in there.' In actual fact, petals generally give out their smell once the buds have already been pruned. Anyway, our greenhouse was 100m by 100m, with a six metre high ceiling, which is a very large area!”
Florence selected 12 strains of rose which no-one was cultivating anywhere in Russia. “Coffee Break”, “Angie Romantica”, “Peony Rose”... One of the most sweet-smelling varieties is “Extase”. She paid attention to the fragrance, colour, size of bud, the stems and leaves.
“In August of 2008, we planted 90,000 bushes. They were small 10cm cuttings. We applied a dropper to every root. We set up a state-of-the-art greenhouse where all processes were managed by a computer. When the air was heated to the right temperature, a device switched off the heating. If there was not enough light, powerful lamps were switched on. Special sensors sent a signal when the roses needed water or fertiliser...”
Kirill KONONOV, Market Analyst, Intesco Research Group:
“Imported flowers traditionally account for around 90% of turnover on the Russian market. In recent years, as a result of the increase in greenhouse facilities in the Moscow region and the country's southern regions, this proportion has been cut to 85% and is set to be cut further still in the very near future. In contrast to western markets, lower incomes and a smaller market volume leads to a comparably higher proportion of “seasonal” companies on the Russian market which appear in spring when sales are at their highest and then subsequently close. Furthermore, the comparatively undeveloped nature of the market translates into a conservative demand and preference for traditional varieties. Average profits in this branch of the economy fluctuate from 3-10%, however, due to the large proportion of grey sector, actual profits can be somewhat higher. According to market participants, the minimum area for competitive schemes is 25 hectares, but the optimum, enabling competition on the international market, is 50. In such cases, the construction of a modern, 1 hectare greenhouse costs around 1 million euro. The term for recouping of outlay on modern greenhouses is no less than 4-5 years.”
Unexpected difficulties arose in recruiting workers. And this in a country with 8% unemployment! For the first year, staff received a salary of 9,000 rubles, and as much again in bonuses. 18,000 (about $600) for a remote part of Russia is no little money. But people went for a lesser salary so as to work less. Strict discipline had to be introduced. Although the Frenchwoman says herself that she wanted to manage, dictating was not interesting to her. But what could she do?
She quickly managed to recruit a more or less hard-working team. Now, 40 people work at the venture with an average salary of 22,000 rubles (just over $700). Their working day is set out to the minute. The workers have three breaks during the day: one hour-long one, and two half-hour ones.
Especially difficult was finding an agriculturalist willing to grapple with rose-growing technology. At first, Florence arranged collaboration with the French Institute of Agriculture. But she soon had to part with an incompetent employee. For those few months while she sought a new consultant, she had to get to grips herself with the installations and electrics. Then an experienced agriculturalist arrived. And the result of a whole summer was the writing down of official instructions for the flower-growers. The consultant personally showed the workers how to pick a strong stem, how to bend the roses. This involves many subtleties. For example, the line of incision for the flower should run at a height of up to three fingers from the root, and not a centimetre more.
Florence originally calculated the project to recoup itself after 3-5 years, now she thinks it will be more like 6-7 years.
“What Do you Use to Scent Your Roses?”
The first roses were cut after 30 days. Arrangements with florists had already been made.
“Our roses have to be displayed for sale a maximum of two days after cutting,” says Florence. “For me , it was very important that they bore a trademark, which is why we took part in shows with our flowers and travelled to exhibitions. We sometimes heard: 'What do you use to scent your flowers?' Many didn't believe that our flowers exude the fragrance of perfume naturally...”
Leonid GROMOV, Agriculture Minister, Kaluga Region:
“I think that Florence Gervais D'ALDIN's motto over the gate to her enterprise could well be 'Thoroughness and Responsibility'. It is precisely these qualities which distinguish her as a business-person and individual. Her creative and tremulous relationship with her unique roses, with her own brand, doesn't allow her to rest on her laurels. She is very proud of the fruits of her labour and always presents her products herself. For more than three years her excellent flowers have enjoyed an unwavering demand not only in Kaluga but also in other Russian cities, including the capital. Florence's roses are a constant adornment to regional and nationwide agricultural exhibitions. The policy of Kaluga region in the area of the agro-industrial complex is orientated towards attracting investment. It is precisely for this reason that we are conducting a renewal of capital assets and implementing technological re-equipping and modernisation. Our investment portfolio has now reached 20.3 billion rubles. 80% of output produced by the region's agricultural organisations is down to those farms where investors are operating. As part of this, investment projects are being carried out successfully in not only large enterprises, but also at the basis of smaller forms of husbandry. The necessary conditions have been created so that every participant in the mixed agricultural economy, geared towards market requirements, reliant on their own entrepreneurial initiative and the support of the government, can find its place and operate effectively.”
In winter, Feya Rozy produce 2,000 stems a day, in summer, 6,000. They are sold in the shops for 95 rubles each. Vendors mark-up the price 3-4 times. “In my opinion, they shouldn't be sold at retail for more than 150-200 rubles, but sometimes in salons their price reaches 400 rubles, and once I saw 700 rubles being asked for them,” tells Florence.
70% of the production cost is the outlay for electricity and staff wages. Florence originally calculated the project to recoup itself after 3-5 years, now she thinks it will be more like 6-7 years.
“We do have something to be proud of: we have a good product,” she says. “Which, no doubt, is why we have VIP clients. The Russian President's administration and the Federal Security Service buy our flowers.”
These days, at Feya Rozy, they are thinking about how to make use of the flowers' by-products. One possibility is to dry the petals. Specialist equipment is needed for this. Florence says that she would gladly produce an exclusive batch for bath salts with rose petals.
“Being a businesswoman in Russia isn't easy,” she admits. “There is a particular attitude amongst men towards them here. It has been the case that I have arrived at negotiations and future partners...began to deal only with my colleague and stubbornly refused to even acknowledge me. Then they are surprised to find out that “Mr. D'ALDIN” is in fact me...
Providing a quality product in Russia, in her opinion, is also tough, and the risks are fairly high. “But one thing I know,” Florence sums up, “is that I wouldn't have had such success with such a greenhouse in France. At home, society is entrenched, everything was carved up long ago, family tribes have their niches occupied.
But in Russia, it is still possible to come out with a new product. Living here isn't easy, there are always problems cropping up, but there is a multitude of solutions to them...” Here is just one example. Once, due to a breakdown with the pumps, the greenhouse was left without water for two days. For the flowers, this was a long time. Almost fatal.
“And, what do you think?” Florence raises her eyebrows. “The local fire brigade saved us with their fire engine. In France that would be impossible!”