New York based private equity firm investing about $200 million in Ethiopian flower company AfrifloraJune 4th, 2014
KKR Buys Rose Farm in First Africa Deal
The Deal is the Private Equity Firm's First Foray in Africa
LONDON—For private-equity giant KKR, a debut investment in Africa smells of sweetheart roses.
Source: The Wall Street Journal
Afriflora is an Ethiopian company that grows about 730 million of the flowers a year for export to Europe, making it a significant player in the east African country's blossoming cut flower export industry. KKR is investing about $200 million from its $6.2 billion European fund to buy a stake in the company, according to a person familiar with the transaction.
The deal opens a new chapter for KKR, the New York-based firm best-known for its hostile $25 billion leveraged takeover of RJR Nabisco in 1988, the subject of the book "Barbarians at the Gate."It also comes as private-equity firms, seeking opportunities outside the crowded markets of North America and Europe, show tentative interest in Africa. KKR rival, Washington-based Carlyle Group, raised a $698 million African fund earlier this year and has invested in a food distributor and a logistics company, for instance.
Ethiopian Flower Exporters Cash In on Valentine's Day
By Marthe Van Der Wolf
ADDIS ABABA, ETHIOPIA — Ethiopia’s flower exporters are cashing in on Valentine’s Day, as the industry blooms.
Many of the roses that lovers give each other on Valentine’s Day happen to be grown in Ethiopia. In the last decade, the industry has grown from nothing to one of the dominant players on the international market.
Zelalem Messele, an Ethiopian flower grower and chairman of EHPEA, the Ethiopian Horticulture Producer Exporters Association, said Valentine's Day is very important for the country's flower sector.
“It’s one of the holidays the flower industry flourishes. And the production goes up by 30 to 40 percent and so the demand,” said Messele.
About 85 percent of Ethiopia’s flowers are exported to Europe. Flower exports in 2012 were valued at more than $210 million. This year, the amount is expected to be more than double, at $525 million.
Industry growth and government-provided tax breaks and loans have attracted many foreigners here to set up flower farms in Ethiopia. Of the 90 flower producers in the country, more than half are non-Ethiopians - many of them Dutch.
AQ Roses, a 40-hectare flower farm, 180 kilometers southeast of Addis Ababa, employs 1,250 people. It is run by a Dutch family who came to Ethiopia in 2005. General Manager Frank Ammerlaan said there were multiple reasons for coming to Ethiopia.
“We were much more attracted by the whole atmosphere in Ethiopia. There’s a lot of sunshine. The temperatures are moderate. It’s not too hot, not too cold. That’s why we are able to produce good flowers,” said Ammerlaan.
About 1,500 hectares in Ethiopia are used to produce flowers. The fast-growing industry has directly created about 85,000 jobs and roughly 110,000 jobs indirectly. Women take up 80 percent of these jobs.
ZK Flowers is a flower farm 50 kilometers south of Addis Ababa. There are only a few men to be spotted on the eight-hectare flower fields, as women occupy all jobs from cleaning to production management.
Birke Gormis works six days per week in the fields of ZK Flowers. She said the industry has improved her life and that of her family. She said that since she is employed, she is not dependent on her husband when she wants to buy items at the market.
Kenya is currently Africa’s biggest flower exporter and Ethiopia is second. As Ethiopia aims to surpass Kenya in the coming years, it is focusing on penetrating the North American market.
Roses bring industry, jobs to Ethiopia
A rose is a rose is a rose, unless it's from the Federated Democratic Republic of Ethiopia. That's according to growers of the flower from that country, whom I had an opportunity to meet at a reception and dinner at the Ethiopian Embassy in Washington in March.
Throughout the large reception room at the embassy, there were literally hundreds of roses of all colors and hues — bright yellow, brilliant red, deep orange, hot pink — lining the walls and placed on pedestals. They had been shipped in for the event, and the growers proudly talked about the numerous varieties that can be found on their farms that were in the room.
Sadly, when many people think of Ethiopia, famine and drought are what usually come to mind and not the velvety, sturdy roses that are being grown there in increasing numbers and exported worldwide. It's no surprise that roses do so well there because Ethiopia has an agriculture-based economy, with 75 percent of its exports being agricultural products such as coffee, sesame seeds and flowers.
Bad weather affects Ethiopia's flower export for valentine
A recent spell of inclement weather in some of the main horticultural areas proved devastating for Ethiopia's Valentine's Day flower exports.
Officials at the Ethiopian Flowers and Vegetables Exporters Association say that cold weather saw the late cutting of flowers, affecting exports to European market for Valentine's Day.
The association said that the country failed to reach an expected 30 percent increase in exports, as the bad weather delayed flower cutting by up to 15 days.
Horticultural products have, in recent years become one of Ethiopia's major export products along with traditional coffee.
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Another flower firm withers away in Ethiopia
By Muluken Yewondwossen
The Development Bank of Ethiopia (DBE) has announced the foreclosure of another flower farm.
Site Agro Plc has been closed because of a failure to pay back a DBE loan.
According to the notice posted in the Amharic state-owned daily, Addis Zemen, the estimated value of Site Agro Plc was 3.7 million birr. The farm is located in West Showa Zone, Ajere Woreda, around Addis Alem town, on an area of 13.13 hectares, which is cultivated with various types of flower.
Previously the state-owned bank foreclosed five other flower farms due to failures to keep up with payments. Three of them are in the process of being transferred to other owners by negotiation because an auction did not attract buyers.
Although too late for Site Agro Plc and the others, recently steps have been taken to try and ease the situation for the troubled flower firms. The government suggested a rescheduling of land lease and loan terms and an agreement has recently been reached.
"The international crisis had had a negative impact on us. Considering this, rescheduling of the loan payment duration is a welcome move by the government. It is encouraging," Ethiopian Horticulture Producers and Exporters Association (EHPEA), President Tsegaye Abebe recently told Capital.
DBE has established a Flower Administration Committee to manage flower farms until they are transferred to other private companies.
Ethiopia has emerged as one of the biggest flower and other horticulture producer in the continent over the last few years and the export of the product has become one of the major foreign currency generators for the country.
Currently EHPEA has 90 members. Members are required to be registered and licensed and actively engaged as producers or exporters of horticultural products (flowers and other ornamental plants, fruits, vegetable, and herbs,) in Ethiopia.
Over the last eight months of the last budget year, the country earned over 100 million dollars from the sector's exports.
From the total 2,800 hectare of land covered by flower and horticulture, 1,200 hectares is allotted to flower cultivation. Most of the sector's developed land is in Oromia within a 200km radius of Addis Ababa.
According to a report last year from the Ethiopian Horticulture Development Agency, the country secured 151 million dollars from flower and horticulture products exports in the last full budget year, an increase of 26 million dollars from the preceding year.