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Healthy future Floriway through restructuring and repositioning

October 14, 2024

Floriway truck Floradome
In recent months, Royal FloraHolland, together with Floriway and external experts, has conducted a strategic study into the future of Floriway. Various scenarios were calculated and weighed up from a financial, commercial and operational perspective. A hard precondition is the realisation of profitability in the shortest possible term. The study concludes that the chosen scenario for restructuring and repositioning is the most optimal scenario. It has been decided that in addition to further restructuring, a repositioning of Floriway will take place with a focus on closer cooperation and synergy opportunities with Royal FloraHolland. In recent months, new management has implemented numerous concrete interventions and improvements already bearing their first fruit. The result of the independent investigation is that the strategic relevance of Floriway for Royal FloraHolland and the floriculture sector has been confirmed. Moreover, there is now a clear plan towards a financially healthy future.

Better results
Steven van Schilfgaarde, CEO of Royal FloraHolland, emphasises that Floriway is back on track. ‘In the third quarter of 2024, under the leadership of new management, significant steps have already been taken to improve customer service and the cost structure. That was one of the biggest pain points. Customers are central, and there is a real focus on operational execution. That makes for noticeably better service and improved financial results. We are convinced that with the plan, Floriway has a structurally healthy future ahead of it. Those plans also include room for the necessary investments in IT and the fleet to be ready for the future in that area. Although Floriway is not yet immediately profitable, the foundations have been laid for a stable and healthy future. This confidence is partly based on the results of the past quarter. From the board, we will continuously monitor the performance and implementation of the plan and discuss it periodically with Floriway's management.’ Acting Floriway managing director Marc Goudzwaard added: ‘Our focus is entirely on our customers and employees, in addition to improving our results, as it should be. Our drivers and other employees make strides for our customers every day. Our customers and employees are again our top priority. In addition, we are taking the final steps in integrating the three companies.’

Restructuring and repositioning
The restructuring consists of continuing significant productivity gains with targeted measures from a clear plan for the future. This opted for a sharpened focus on customers and process improvement to improve service and financial performance. The first results are visible: productivity is increasing, and the number of customer complaints is decreasing. An essential part of this decision is the repositioning, which aims to achieve maximum cooperation and synergy between Royal FloraHolland and Floriway. This will be achieved by integrating Floriway's internal logistics with those of Royal FloraHolland for more efficient, reliable and sustainable distribution within the RFH hubs.

Improvements and measures

In the past period, a start was made on reducing the number of indirect employees and other fixed costs. This included saying goodbye to rented spaces and docks in Aalsmeer and Naaldwijk and merging Floriway's boxes there for more efficient use of space. In addition, truck productivity, load factor, and box productivity have been significantly increased by tightening daily steering. Collectively, these measures provide a financially stable base, enabling customer promises to be realised. Several individual customer interviews confirm the growing confidence in Floriway's new direction.