Current status of Phalaenopsis export from Taiwan- Its

competition on the marketof the U.S.

Speaker ： Ms. Stella Yuan

CEO, Agriculture Business Division

Taiwan Sugar Corporation

March 3, 2011

Preface Taiwan exports 2.5 billion NTD (about 80 million USD) of

Phalaenopsis to the world in 2010. United States and Japan are two major markets for

Taiwan Phalaenopsis, they hold 50% and 35% of Taiwan Phalaenopsis exports, respectively.

In America, the orchid market grows yearly. The wholesale value of orchids exceeded that of poinsettia in 2009. There will be a great increase in North American market in next three years.

Nations Plants Sales

Plants imported from Taiwan

Ratio of imported from Taiwan/sales

Japan 20 7 35% America 20 10 50% Europe 100 12 12%China 10 1 10%Others 10 5.6 56%Total 160 35.6 22%

Phalaenopsis market shares (Year 2009)Units:million plants

America orchid sales changes in 2005-2009 Units ： 10,000 pots

Data Sources ： USDA,

 States 2005 2006 2007 2008 2009

California 778.0 640 650.9 733.4 877.9

Florida 620.2 475.8 525 650 558.9

Hawaii 268.8 290.5 279.3 224.9 175.0

New Jersey

7.2 10.5 9.1 22.8 16.9

New York 27.3 11.6 11.2 12.6 26.1

Illinions 21.7 0 21.3 19.9 115.7

Ohio 0 0 0 0 125

Total 1800.2 1477.4 1542.1 1706 1947.3

Big company has the capability of mass and planned production

In America market, it requires extra amount of orchids during important holidays, while at regular time it also needs steady supply.

The products need to be diversified, more colors, different sizes and types or with different kind of pots and packing.

Marketing policy will be focusing on mass market, i.e. grocery stores, superstores, garden centers and other chain stores.

Mass markets require colorful products and steady supply

The change of competition and production in American Phalaenopsis industry

Traditional orchid production The introduction of Netherlands automation

greenhouse production International cooperation at different stage of

production The Netherlands orchid company invest

production facility in America. New orchid growers – Other non-orchid growers

in America change to orchid growers.

Growers in America forcing flowers with the plants imported from Taiwan

Phalaenopsis automation cultivation in North America Nursery

Matsui nursery estimatesThere will be 70 millions Phalaenopsis plants demands in American market in 10 years.

Matsui nursery improves cultivation method for future competition.

Future trends in American Phalaenopsis market

The impact of Culture model change -

Traditional Taiwan-America corporation model v.s. Netherlands automation culture More bedding plants and greens growers change to grow phalaenopsis. Floricultura invests production facility in America. China, Korea, Thailand, and etc. may get into the American market in the near future.

【 What is the advantage for Taiwan Phalaenopsis industry in the future ? It is a topic worth of thinking for everybody. 】

The Netherlands is the biggest competitor of Taiwan Phalaenopsis industry

Taiwan exports 32 millions USD phalaenopsis to America in 2009, and 39 millions in 2010.

There is a 25.3% increase in 2009, yet only 21.7% increase in 2010. The increase rate slightly going down.

The Netherlands exports 4.5 millions USD of Phalaenopsis to America in 2009 and 9 millions USD in 2010.

There is a 17.8% increase in 2009 and 146.3% huge increase in 2010.

Floricultura’s strategy in North America

The nursery in Salinas, CA will produce 5 millions plants in 2011. 2-3 millions are in 4”-pot with double spikes.

It cooperates with Matsui nursery, and will start with providing half million double-spikes plants.

Research ：There are gaps in varieties between research

and market.(Varieties need to fit in local environments;

varieties can tolerate transportation stress.)Production ：

Virus-infected plants are still present in certain percentage.

Short of SOP for large scale production.Mid-size or small orchid nursery have

difficulty to maintain steady supply all year round.

Improvements need to be done in Taiwan Phalaenopsis industry

Marketing ：A great competition in American market will raise due

to the entering of Netherlands large orchid company.

Precise control of production is urgently needed.

Short of cultivation handbook and poor post-sale service.

Production doesn't match the need of sales causing low output of the facility.

Improvements need to be done in Taiwan Phalaenopsis industry

Strategy of Taiwan Phalaenopsis industry for American market

• Actively collect orchid industry information from other country.

• Cooperate with growers in Taiwan or in America to scale up the industry.

• Provide new variety, creative products and new technology.

• Export virus-free plants.

• Increase sale channel or increase production facility for more local market in America.

Strategy of Taiwan Phalaenopsis industry for American market

Taiwan (Supply) North America (overseas facility)

Breeding materials collectionBreedingPropagationMature plants productionPre-transportation treatment

Brand managementProtection of intellectual

propertyMarket developmentLogistic Forcing flower

•Tightly corporation between domestic and America growers

Conclusions:『 Good Quality

Low Cost

Varieties variation 』

『 Cooperation

instead of

Competition 』

Thanks !