Dear colleagues,

Well done! We gratefully note that we have come through the Corona crisis quite well so far. In the first half of 2020 we have outperformed Sales of the last year and we are still on track to reach our ambitious plans for 2020. Also our project works are well on track:

• Our partner production projects in China, Japan and France have started and are making good progress.
• In Japan, we have founded a new KD sales company “KD Japan” to support our growth ambitions with locally produced substrates.
• With the takeover of the Sales Activities of Shakti Cocos, we are seizing an opportunity to well establish ourselves in the coir business and also to further support our 30% scenario.
• Our Growcoon Success Story continues – we can now score points with a further developed and even more sustainable model of the Growcoon.
• The Log & Solve platform is increasingly proving to be an entry ticket to new customer groups. We have just decided to integrate the software into our Global Advisory Services and roll-out this new digital platform to all our customers world wide.

The intense developments in the recent months have further sharpened our perception of Klasmann-Deilmann: Our business proved to be very robust, our teams performed even in the most difficult circumstances, we were able to ship product and support our colleagues across the globe at all times. Also we have jointly identified, what Klasmann-Deilmann can learn from this crisis. We analysed strengths and weaknesses, opportunities and risks of our business model and, quickly adapted our strategic roadmap to these findings.

In this issue of our Sales Newsletter we will give you more insights into these topics and wish you an inspiring and profitable read.

Best regards,

Moritz Böcking
Michael Hwang
Sebastian Kipp
Sergej Luft
Carmen Mecklenburg
Dirk Röse
Ted Vollebregt

In recent months two dynamic developments have clearly revealed the strengths and weaknesses of our business model: the coronavirus crisis and the “European Green Deal”. So far so good: as Klasmann-Deilmann is part of the food industry, the coronavirus crisis does not pose an existential threat to the Group. However, we have been facing challenges in logistics and human resources. With its “Green Deal”, the EU aims to achieve climate neutrality of Europe by 2050. This target requires a strong willingness by Klasmann-Deilmann to embrace change as, in the medium term, we will have to abandon the very resource that makes us strong in times of crisis – peat. Therefore, a few questions arose:

• Will our efforts to automate production and digitise processes really make us less dependent on personnel? Will we be even more robust and prepared for the next crisis?
• Do we think big enough about new partner-production projects? What will it take to significantly reduce our risks in logistics and to really become less dependent on peat?
• Have we already found the new raw material(s) that will grant us sufficient resources and maximum leads in the post-peat era?
• Do we already have a clear idea of our business model to take horticulture into the future, and have we got sufficient capacity to implement it?

In the strategic paper “Green Deal and the coronavirus – will we have to adapt our Strategy 2025?”, we identified the strengths and weaknesses of our current business model and proposed measures to further accelerate our company’s preparations for the challenges of the future.

How should Klasmann-Deilmann prepare for these scenarios?

The measures listed below are intended to strengthen Klasmann-Deilmann’s strategic reorientation and to make the company even more robust to face the next crisis:

• Our production companies will increase their storage capacities for peat and for alternative constituents, our sales companies will take more substrates into stock in order to be better prepared for supply chain disruptions;
• We will enhance the development of strategic procurement partnerships for our most important alternative constituents;
• We will train additional staff (“crisis teams”) for emergency use in production;
• We will incorporate work trends that have proven their worth in times of crisis (video conferencing, working from home) to save costs and make our business processes even more flexible;
• We will continue to monitor the impact of the crisis on consumer needs and trends in commercial horticulture (e.g. increasing demand for growing vegetables at home, vertical farming), so as to identify opportunities and risks of new horticultural potential at an early stage;
• We will gear our product portfolio and key account management activities more strongly to the food industry in order to further strengthen our business model;
• We will examine online-based sales channels in order to increase access to existing and new customer groups and exploit extra sales potential;
• We have started to intensify our lobbying at European level to raise public awareness of the substrate industry’s systemic importance to the food sector;
• We are stepping up our digitisation drive (order processing, automation in extraction and production, Log & Solve, video calls and meetings) to save costs, time and travel and make business processes less dependent on personnel;
• We support the expansion of our close-to-customer production to decrease our freight risks and to use more local raw materials.

Are you interested in reading the full strategy paper? For more information, please contact Dirk Röse, Head of Corporate Communications at

Yes, as in almost any other industry, our business has also been affected by the coronavirus. There were, and still are, logistical disruptions, government-imposed restrictions and a decline in economic activity across the globe. As a result of the above, we are behind a few of our ambitious growth targets for this year in Africa (PLAN 2020: +11%), America (+12%) and Asia (+22%).

However, due to the geographical spread of our sales network, Group substrate sales performance reached last year’s level. The expected decreases in sales within our core markets turned out not to be as high as expected. We had significant increases in our very profitable organic segment (+ 15K m³) in Central and Western Europe. Some markets and segments benefited from advance sales due to the coronavirus and to weather conditions, whereas others quickly recovered. Overall, the food sector demonstrated its resilience in the face of crisis. This helped us to outperform last year’s Group gross margin generated from substrate sales.

Our business activities involving the Growcoon and consumer substrates grew significantly, and this helped to lift our total Group sales above last year’s level.

Despite all the prevailing risks and uncertainties, we can be proud of our sales performance so far, and we should be confident about the next few months as well.

In the late 1990s, Klasmann-Deilmann entered the Japanese professional substrate market by providing farmers’ co-ops, large nurseries and soil-mixing companies with quality European substrates. Over the years, Japan has become one of Klasmann-Deilmann’s most important Asian markets in terms of sales revenues.

Most Japanese soil-mixing companies offer substrates based on Canadian peat, which are generally dry and have a fine structure. Our Japan sales team can see there is a market for locally produced substrates with European peat produced to German quality standards in 40 l bales, the size preferred by Japanese growers.

In 2019, Klasmann-Deilmann decided to launch another of our “partner production projects” in Japan by way of response to the long-standing interest in locally produced substrates. Our company has teamed up with Ogaki Engei, one of our long-established business partners and a renowned soil-mixing company and clay supplier in Japan. Local growers would soon have greater accessibility to our growing media, as they would not need to order in full containers and place orders three months in advance.

With local production in mind, Dave Ebizawa and Teruki Kobayashi – our Business Development Consultants in Japan – and Armin Rothhaus (Advisory Service) have developed four substrate recipes targeted to the vegetable seedling, fruit vegetable grow-ons, potted ornamentals and strawberry segments. In addition to Lithuanian peat, locally sourced constituents such as perlite, vermiculite and Kanumatsuchi clay are also used.

Hiroshi Kobayashi joined Klasmann-Deilmann at the start of the year. He is the Sales Manager of our newly established subsidiary Klasmann-Deilmann Japan. Our Japanese sales company is responsible for purchasing the locally produced substrates from Ogaki Engei and selling them to distributors and end-users. Meanwhile, Klasmann-Deilmann Asia Pacific will continue to serve Japan with imported substrates and raw peat from Europe.

Since Japan lifted the state of emergency in late May, the Japan sales team has resumed travelling, promoting the new recipes to prospective customers. Currently, the focus has been on Kanto region (east Japan) for the upcoming growing season in autumn. The team will soon roll out the new recipes to the other regions in Japan.

An important argument for using the Growcoon is its decomposition by microorganisms. Disintegration tests have proven that the firm structure of the Growcoon will fragment into smaller and smaller pieces, with these fragments eventually becoming invisible.

Now Maan BioBased has carried out further developments involving its Growcoon product, and a new type of Growcoon is now available that decomposes faster than the previously available versions. The material used for production was chosen for its greater susceptibility to microbial decomposition processes. The aim was for the Growcoon to adapt even more flexibly to local conditions in a given nursery. Commercial growers can now decide whether the more rapidly or the more slowly biodegradable option is better suited to their cultivation method.

The new, more rapidly degradable Growcoon versions are being marketed under the brand name “Growcoon Progressive”, and the well-known original Growcoon is now called “Growcoon Regular”.

In this context, another video clip was uploaded to our YouTube CHANNEL. Digitally animated, the clip explains and shows how the decomposition process works.

Product Manager Franziska Watermann is currently coordinating the introduction of the new Growcoon in consultation with our sales companies and Maan BioBased. She will be glad to receive any queries, suggestions and requirement notifications: .

Bol Peat B.V. has taken over the business of Shakti Cocos B.V. With effect from 1 June 2020, Shakti Cocos transferred the exclusive international distribution rights and the existing customer base to our Dutch trading company. The agreement includes the acquisition of the Shakti Cocos brand and the patent for the buffered coir product Shakti Amla® including the trademark rights. Under these arrangements, product manager and Shakti Cocos sales representative Jack van Batenburg is being transferred to Bol Peat.

Shakti Cocos distinguishes itself from other coir suppliers through exceptional quality characteristics, product certification to the widely adopted RHP standards, tightly organised production with local partner companies and the possibility of manufacturing customised solutions. “It was very important to us that Shakti Cocos has been certified in accordance with the internationally recognised SA8000 standard for socially responsible jobs in the production facilities,” says Ted Vollebregt. “In this way, Shakti Cocos supports sustainable development within the KD Group.“

In addition, production of Shakti Cocos in India and Sri Lanka is characterised by the fact that all coir products can be tracked or traced from the receipt of the raw materials to the delivery to the customer. The coir raw materials are stored in bunkers to increase their physical stability while also preventing contamination. During subsequent processing, various treatment methods such as washing, buffering and the patented Shakti Amla® treatment are used before the finished coir products are laid out on concrete floors again for drying. Finally, there are various options available for sorting, mixing and packaging. “Great importance is attached to environmentally compatible wastewater management,” affirms Ted Vollebregt. “Used water is purified and reused in our own coir production or in agriculture.”

The preparation, mixing and packaging of the raw materials is carried out according to the specifications of the individual customer. For this purpose, coir pith, coir crush and coir chips are available (among other products), which have been sieved into different fractions. In order to achieve the physical properties desired by the customer, certain coir products are mixed. Common packaging units are 5 kg blocks, Easyfill bags and Growbags; customised blocks are also offered that fit exactly into the cultivation benches of a given nursery.

The patented coir product Shakti Amla® is characterised by a consistently low pH value and thus offers nurseries a unique additional benefit. The often fluctuating pH levels of coir products are stabilised by the Shakti Amla® process, thus simplifying the application of the substrate and the subsequent fertilisation of the crops.

Your contact for coconut products from Shakti Cocos is
Jack van Batenburg
E-Mail:
Phone: +31-6-54221977

As you may know, our Incubator is located in the same office in Schiedam as Klasmann-Deilmann Benelux. This enables us to be continually updated concerning the latest developments in their work. The Incubator mainly draws on the Dutch customer network of Klasmann-Deilmann Benelux in testing new alternative constituents and digital services. This way of working requires the sales team to invest more time, but in most cases, our customers appreciate that we are innovative and continuously looking for new alternative raw materials and products.

The story of Log & Solve started two years ago. Back then, this was only a simple minimum viable product (MVP). The Incubator wanted to test this idea, so they worked together with our Benelux sales team to introduce the first product to the market. We visited more than 100 growers for interviews. Thus, Log & Solve was co-created with customers from the very start, resulting in a product that is a good fit with their nurseries.

After introducing Log & Solve to existing customers, we began using the platform to acquire potential new customers as well. Within a very short time, Log & Solve has proven to be a suitable door opener to generate new leads. Aided by the new online solution, we obtain insights and further build trusted relationships with growers. And that is essential for our business: we are aware that selling substrates is very much based on trust. We know from past experience that, as soon as new customers have switched to one of our innovative products such as container mulch or the Growcoon, the door is also wide open for substrate sales.

Log & Solve can help us to achieve our goals and to assist growers with the challenges they face:

• We know that peat-reduced substrates potentially lead to more risks during cultivation. With Log & Solve, we can assist them in their work with the “new” substrates. Growers can gain more insights into what happens during the cultivation cycle as well.
• Customers who plan to scale up with their production often face a lack of skilled employees who are well-versed in cultivation knowledge. Log & Solve can support the production managers in their daily work and decision-making. For example, they can set up benchmarks for different locations.
• Log & Solve establishes a new business model that is strictly future-oriented and not peat-based.

We are very happy and proud of Log & Solve. We hope that its success in the Netherlands will expand to the rest of the world.

Shakti-Cocos

The brochure created to support our sales of coir products by Shakti Cocos is ready and available in English and Mandarin. The relevant PDFs can be found among the DOWNLOADS on our website. The special landing page is already online in English. If local language versions are desired, please send the translation to Carmen Mecklenburg.

TerrAktiv PLUS

The marketing campaign to promote the new green-compost product TerrAktiv PLUS is ready to use in your markets and countries. So far, it consists of a two-page leaflet, a landing page on our website, an advertisement, a roll-up banner and a TerrAktiv PLUS folder. All of these are ready for your DOWNLOAD. If you are interested in a local version, please send translations to Carmen Mecklenburg.

GreenFibre video clips

Three videos about GreenFibre have recently been produced:

• General introduction to GreenFibre
• Drainage capacity of GreenFibre
• Water supply and drying with GreenFibre

The content of the clips is interlinked. The clips are available in German and English. As usual, you will find them on our YouTube channel. If you are interested in a version with subtitles in your local language, please send a translation to Carmen Mecklenburg. Additional video projects are already planned concerning, for example, TerrAktiv PLUS, Growcoon and Shakti Cocos. There will be more to come in subsequent issues of our sales newsletter.

The extranet has moved

The well-known technical/marketing database at www.kd-extranet.com has moved to a new home. It can now be found in our WEBSHOP. If you already have access to the webshop, you can also use these details to access the extranet. Otherwise please use the old extranet password.

New online shop for giveaways

Brochures, flyers, giveaways – the warehouse with our promotion material provides a wide range of items relating to customer loyalty and employer branding. Since April, an external service provider has been responsible for storage and logistics. The associated shop can now be reached online or via our Marketplace.

Please order your preferred advertising material at any time online:

• directly in the promotional product shop at www.promotion.klasmann-deilmann.com (please use Firefox to open the link).
• via our Marketplace https://marketplace.klasmann-deilmann.com, where the promotional product shop is listed as an external catalogue

If you have further questions, please contact Carmen Mecklenburg.