5.2.4.- Honduras
Honduras is often referred to as ‘the forgotten country’. It has not faced severe internal conflicts like Guatemala, Nicaragua, El Salvador and Panama but has suffered severely due to disputes in neighbouring which were using Honduras as an escape or an entrance from or to their own country. Besides that, Honduras was never able to promote itself like for instance Costa Rica did and still does. Honduras is in surface the second country of Central America and counts with the facilities of the second biggest Atlantic harbour of Central America. The term ‘Banana Republic’ originated in Honduras due to the strong influence of foreign companies (Standard Fruit and Tela Rail Road) on local politics.
Due to the fact that Honduras hasn’t managed to put itself ‘in the picture’, the country has attracted less international attention than neighbouring countries like, for instance, Nicaragua. A clear example of this was hurricane Mitch. Although Honduras had to face more severe damage than Nicaragua, Nicaragua received triple the amount of foreign aid.
In horticulture, this situation has always been similar. International companies normally put their eyes first on Costa Rica and secondly on Guatemala. Honduras has not really managed to sell itself and based on the actual organization of Trade Promotion Organizations, it is not likely that this situation will drastically change in the near future.
Honduras has very favourable conditions for the production of various types of fruits, vegetables and ornamental plants. What is lacking most of all, is companies bringing in knowledge and capital to set up joint projects. To establish such projects, it can strongly be recommended to facilitate such developments in the most attractive way possible. The Dutch government has its PSOM program available for Honduras.
A joint project to be set up by organizations like FPX, OIRSA, the University of Zamorano, FIDE and / or the Ministry of Agriculture to put more emphasis on the benefits of Honduras as a producer of non-traditional agricultural crops could be a logical step.
5.2.4.1.- Export of vegetables to the East Coast of the United States / Canada
Actual Situation
The United States has not been a very attractive export market for Central American vegetables for various reasons. First of all, there have been restrictions on imports which are now gradually taken away. Because of these restrictions, there was no real need to produce vegetables under quality standards as required in North America. Besides that, focus has been on Mexico as the main foreign supplier to North America which has taken away the focus on Central America as a possible candidate. On top of that, Mexico has a big potential local market which Central American countries have to a far lesser extent.
Times are changing. First of all, the USA starts to open up its market and as a result, various projects in countries like Guatemala, El Salvador, Nicaragua and Honduras have been set up to export vegetables to North America. A number of these projects have been set up with Israeli technology and Israeli capital and / or loans.
Description of the opportunity
Central America could turn into a main supplier of vegetables for especially the East coast of North America using sea freight from one of the Caribbean harbours. Costs of transport and even transport time are comparable to products coming from Mexico. The climate is comparable to Mexico or even better in certain locations and production costs can be rater low due to labour costs in Central American countries.
Dutch investors, producers and exporters to North America looking for backwards vertical integration, can find great opportunities in Central America. Honduras is probably one of the best options although it usually is the first country ‘to forget’. Seed companies can also find fertile soil for expanding their business in Central America by participating in or setting up demonstration projects for export oriented vegetable production.
5.2.4.2.- Production of Phalaenopsis for Europe and USA
Actual Situation
Honduras has good conditions for the set up of greenhouses where plants are grown for (sea freight) export to Europe and / or North America. Puerto Cortes has a well equipped harbour, frequent connections with both Europe and North America, labour is available and there are some counterparts which have existing ornamental farms and willing to diversify. These conditions seem excellent for a new phase of a crop which has gained enormous market share during the last 10 – 15 years in the European market, Phalaenopsis.
Phalaenopsis is a crop which requires large investments in plant material but most of all in greenhouses and greenhouse facilities. Cultivation of Phalaenopsis has three phases; the vegetative phase (‘high’ temperatures), the generative phase (moderate temperatures, around 18 degrees) to develop the spikes, and the final phase to get the flower shoots out and have the plant flowering.
Future scenario
If Phalaenopsis plants can be produced in Central America with spikes induced and if they can be transported to the Netherlands and / or North America, only the final stage will have to be executed at the nursery abroad (Holland). This would lead to a substantial reduction of costs as about 12 months of production time (depending on the pot size) will be done in a country with much lower costs and a much more favourable climate.
In order to do so, greenhouses need to be set up which have to be equipped with climate control to realise the second phase (between 17 and 19 degrees) or plants need to be produced on two separate locations; a location with a low altitude for the first phase and a location with a higher altitude for the second phase. From a quality point of view, the first option is more recommendable.
The plants with induced spikes could be shipped on Danish Containers to the European market and on other logistic carriers to the North American market. As Phalaenopsis is not cultivated in peat moss, substrates can be used which do not cause problems with imports into the USA / Canada.
Dutch companies are actually considering moving part of their production process to other countries with a more favourable climate and lower costs. However, focus has been on Asian and African countries so far. Having North America as ‘it’s second home market’, Honduras (and other Central American countries) could be much more interesting for Phalaenopsis than Africa and Asia. On top of that, container sea freight is much quicker from Central America as well.
