Sustainable production of Phalaenopsis in Guatemala Sales of phalaenopsis soared tremendously around the world, but the production requires high investments resulting in considerable (financial) risk. Phalaenopsis is a plant member of het family of orchids (about 20,000 varieties). At the beginning of this century the production and sales of phalaenopsis compared to other flowering plants, grew explosively in the Netherlands. Other countries start proving that this is not an isolated case. Brazil is an upcoming market, which is still in its initial phase, phalaenopsis production and sale are rapidly expanding. The United States is an important market for phalaenopsis that is not yet mature and is growing fast. The only country in Central America where phalaenopsis is sold in reasonable quantities is Costa Rica. Agro Orchids is the only professional provider/exporter of phalaenopsis to Guatemala. Guatemala is by far the largest and most interesting market to be developed for flowering plants. Here, the middle class is growing and creating new sales opportunities. Large scale production of phalaenopsis is a relatively young sector in the greenhouse industry. The vast expansion in the last decade is the result of the access to new technology (cooling) that has allowed production all year round at interesting cost prices in combination with an excellent quality for customers. The margins on these plants are interesting, but the investment required in hardware and working capital are huge. Ter Laak Orchids (Netherlands), Agro Orchids (Costa Rica) and Topke (Guatemala) intend to set up a project in Guatemala which has the potential to create a brand new subsector, the production of phalaenopsis. Guatemala offers great perspectives for phalaenopsis production due to the attractive location, climate (eternal spring), very competitive production costs, and access to promising markets. The three companies will form a joint venture, generating employment for 28 people.Corporate Social Responsibility (CSR)The employees will be offered good employment standards. The focus is to create full-time jobs, career development in line with the joint venture plans of expansion is possible, and the same goes for extra bonuses if expansion is a success. Basic-level employees will receive salaries at least 20% above minimum wage. The majority of the workforce will be women. The project partners will sponsor their children’s educational career (after six months of employment) and take care of additional costs such as books, uniforms etc. Transport to and from the greenhouse will be provided, also twice daily meals. Extra transport measures will be taken on paydays to guarantee employees safety. The project will be GlobalGAP and MPS-SQ certified, production will follow the highest environmental and social standards, and will become a member of the Guatemalan association CentraRSE (Centro para la Accion de la Responsablidad Social Empresarial). The environmental impact of the greenhouse will be as low as possible. Crop protection will be done predominantly with biological crop, creating no negative impact on the environment. Rain water will be collected and in case of surpluses made available to local community. The project partners will work with certified suppliers, and in case no certified companies are found they actively will check on social and environment issues. The company will also seek cooperation with the NGO Mil Milagros. In case there is a demand from the market, Fair Trade certification will be a next step. The partners will implement a zero tolerance policy towards corruption and local rules and regulations will be respected.Impact•	Employment and working conditionsThe employees will be offered good employment standards. The focus is to create full-time jobs. The project partners will compile a comprehensive HRM policy including salaries, job descriptions, training facilities and opportunities, transport, sponsoring, health policies. Employees are free to join labour unions and similar associations. Employees trained in first aid assistance will be available and additional training opportunities will be offered. Basic-level employees will receive salaries at least 20% above minimum wage. The project partners will sponsor children’s educational career and take care of additional costs such as books, uniforms etc. Transport to and from the greenhouse will be provided, as well as twice daily meals. Extra transport measures will be taken on paydays to guarantee safety. The project will be GlobalGAP and MPS-SQ certified, production will follow the highest environmental and social standards, and will become a member of the Guatemalan association CentraRSE (Centro para la Accion de la Responsablidad Social Empresarial). The project aims to be an example for other companies in the community in terms of social issues such as the prevention of child labour. The project partners will also set up a shop where employees can buy some goods against cost price on a credit system.•	Innovation / Transfer of knowledgeThe project will introduce the professional production of Phalaenopsis (semi-finished and flowering) in a modern, controlled greenhouse. The professional production of these plants does not exist yet in Guatemala. The project strives to start up a new subsector in horticulture and bring plant production and marketing to a new level in Guatemala putting the country as a promising lower cost destination. For the production modern climate control systems and computers will be installed, the technique is new to Guatemala, it will be GlobalGAP and MPS-SQ certified, guaranteeing production will follow the highest environmental and social standards. The Phalaenopsis assortment which will be used is unique and distinctive.•	Chain effectsImpact on local suppliersThe project will have a medium impact on the local suppliers of raw materials (fertilisers and biological pest control, substrate and packaging materials). The partners will do their utmost to create loyal working relationships with a group of trustworthy suppliers and will only work with certified suppliers. If these are not available the partners will work with known suppliers with track records. All the plant material varieties for the Phalaenopsis (liners) will be obtained from Ter Laak Orchids and Agro Orchids Costa Rica S.A.. Other necessary materials (pots, sleeves etc) will be bought locally or otherwise if not available in Guatemala imported from China and Europe.Impact on local customers/consumersPhalaenopsis is a new subsector in horticulture in Guatemala. The product is new and has an image of exclusivity and luxury. As part of the market penetration strategy the project will export 70% to 85% of the spiked and non-spiked Phalaenopsis to the USA and Central America. 15% to 30% of the production will be sale in Guatemala as flowering plants. Following the popularity of the Phalaenopsis in Brazil, the Netherlands and USA it is expected to tap into a latent consumer demand in Guatemala. Consumers in Guatemala will have year round the access to high quality Phalaenopsis. Once sales increase it is expected that prices will go down.•	Impact on the sectorProfessional production of Phalaenopsis is a new subsector in horticulture in Guatemala. The success of the project will positively affect partners up and down the chain and will create more jobs in horticulture. It will demand logistics on a micro level and offer opportunities for suppliers of packaging and product presentation materials. For the packaging materials the project partners will work with local women groups. The project partners will organise retail training and will also seek cooperation with existing organisations in the horticulture sector, the University Landivar and HAS Hogeschool for practical training and research assignments. The company will also seek cooperation with the NGO Mil Milagros.•	EnvironmentThe project will implement an environment impact assessment. The project will be GlobalGAP and MPS-SQ certified, guaranteeing that the production will follow the highest environmental standards. Crop protection will be done biologically. Rain water will be collected. Water usage will be much lower than with other comparable crops/ornamental plants, due to the optimal conditions in the greenhouse. The project is intended to be established at a location where renewable energy is available. If not, at middle-/long-term the project will start generating its own solar energy.•	Position of womenThe project actively promotes the position of women. About 60% of the staff will be women working in both basic-level positions in the greenhouse and in high-level positions in the administrative department and in the management. For the packaging materials the project partners will work with local women groups in order to design a unique label as part of the promotion campaign. If this works out well, Ter Laak Orchids and Agro Orchids Costa Rica S.A. want to use similar labels for their own brands and products.•	Impact on food safetyNo direct contribution.•	Impact on waterRainwater will be collected, and in case of surpluses, will be made available to the local community. In case where the project is located, the nearby community has no access to drinking water, the project partners will assist in creating access. To start up the production of phalaenopsis (semi-finish an flowering pot plants) and ignite a new subsector in horticulture in Guatemala improving the countrys reputation as renewed provider and exporter of high quality horticultural products.