Category: "Horticulture"

Ethiopia's flowers grow into new forex earner

May 9th, 2006


Ethiopia's flowers grow into new forex earner
By Linda Muriuki and Arnold Temple

NAZRET, Ethiopia (Reuters) - Inside Jobera Flowers' vast greenhouses, there are rows of rose buds ready for harvest and destined to brighten rooms in faraway Europe.

The Jobera farm, about 90 km (56 miles) south of Ethiopia's capital Addis Ababa, is one of the most successful in a thriving industry that is helping to diversify the country's coffee-dependent economy.

The Horn of Africa country, which prides itself on being the birthplace of coffee, earns about $20 million annually from flowers, according to the Ethiopian Horticulture Producers and Exporters Association (EHPEA).

It is still a paltry amount compared to the $334 million (180 million pounds) it earned last crop year from sales of coffee, its main export commodity. But given the rate of growth in the flower industry, it could soon catch up -- good news for an economy that has been ruled by fluctuating coffee prices for many years.

"Ethiopia will rank as the second or third (biggest exporter) in the world in the next two to three years, I think this will be the major supply for the whole world," said Mike Asres, owner of Jobera Flowers.

Despite having no experience in growing blossoms for sale, Asres decided to risk savings worth $3.1 million and took out a $2.4 million loan when a close friend told him Ethiopia's climate was ideal for the lucrative industry.

In 2000, after 25 years of a relatively comfortable life in the United States, he set up one of the first commercial flower farms in Ethiopia.


Like Asres, many local farmers are pouring their savings into flowers and foreign investors -- from the Netherlands, Germany, India and Israel -- are also buying up land for farms.

The government has sought to entice investors with incentives, including an improved investment code, five-year tax holiday, duty-free import of machinery, and by leasing land out at just $18 per hectare per year.

The plan appears to be working -- 70 new farms have sprung up in the last eight years, including Tsegaye Abebe's on the outskirts of the capital.

Just a year ago, Tsegaye took over the four-hectare (10-acre) piece of fallow land and planted beds of roses. Now, he has a thriving farm and he wants to quadruple its size in the next couple of years.

There is so much demand for his products that he rarely gets time off to spend with his two young daughters.

"When I come home late they are asleep, when I leave early they are asleep," he said.

Growing a flower business is not always a bed of roses as industry pioneer Asres found out.

There were no examples to learn from in Ethiopia, so he had to make expensive weekly educational trips to neighbouring Kenya, which ships out more than 88 million tonnes of cut flowers worth about $264 million every year, and is the biggest cut flower supplier to the lucrative European market.

"When we started this farm, this was one of the first three rose farms in Ethiopia, it was very difficult for us because we didn't have any point of reference to learn from," Asres said as workers carted away hundreds of blooms in plastic pails.

Jobera, which is 6,500 metres (21,320 ft) above sea level, exported 36 million roses in 2005 and employs 1,200 workers. Most of them were unemployed before the farm opened.

According to EHPEA, Ethiopia ships out 70 tonnes of flowers every day but the volume is growing and exporters now have to charter daily flights to Europe in addition to using regular scheduled flights.

Ethiopia is keen to advertise that flights from its capital reach European auctioneers two hours earlier than those from Kenya, which means blossoms stay fresher longer.

"We are literally growing on a monthly basis," said Samson Sebehatu of the EHPEA. "We are negotiating with other operators on cargo capacity to take out more and more (flowers)."

Five Major Flower Firms to Abandon Naivasha for Ethiopia

February 21st, 2006

Five Major Flower Firms to Abandon Naivasha for Ethiopia

The East African (Nairobi)
February 21, 2006
Posted to the web February 21, 2006

By Catherine Riungu

High production costs and insecurity are forcing firms in Kenya's flower sector to relocate to neighbouring countries, particularly Ethiopia, Uganda and Tanzania.

Already, five investors have acquired farms and started the groundwork to set up operations in Ethiopia.

Kenya Flower Council chairman Erastus Mureithi told The EastAfrican, "Flower exporters have complained for too long about rising production costs, which are at an all time high now because of spiralling fuel costs, a strong shilling and insecurity."

Mr Mureithi said, "A combination of factors is persuading investors in this high-investment industry to shift their operations to Ethiopia, Uganda and Tanzania." Ethiopia has become a favourite with the investors, with at least five Kenyan flower firms - who asked not to be named - having acquired large farms there.

Mr Mureithi said even of more concern is the drought currently facing Kenya. The drought has also brought into focus the reliability of irrigation-dependent farming in the long-term. Flower firms are worried that without government intervention to harvest, store and regenerate water, Kenya will not have any farming water in five years' time.

Tiku Shah, chairman of the Fresh Produce Exporters Association of Kenya, said that Kenya has not had a reliable rainfall pattern since the 1997/98 El Nino rains, despite the fact that there is no water policy in place, leaving agriculture at the mercy of the vagaries of the weather.

Oserian Development Company managing director Ron Fasol said Lake Naivasha - where 70 per cent of Kenya's flowers are grown - could dry up due to the uncontrolled use of its waters if the government does not stop issuing more water permits to farmers.

In 1995, the lake was designated as a Ramsar site, a wetlands of international importance due to its rich diversity of flora and fauna.

But with the expansion of the 4,000-acre flower farming sector on the lake, the population around the lake has grown in the past 20 years from about 7,000 to about 300,000.

Mr Fasol said the Ministry of Water and the National Environment Management Authority should stop issuing water permits until the lake waters are sufficiently replenished, "Otherwise, the flower sector will be wiped out in five years because there won't be any water for irrigation."

There is no legal framework guiding the use of water from Lake Naivasha. The flower farms, through the Lake Naivasha Growers Association and the Lake Naivasha Riparian Association, have drafted their own self-regulating codes for responsible water use and conservation of the lake. Among these are keeping a 100-metre buffer zone of riparian land between the farms and the lake, establishment of wetlands for natural water purification and the sinking of boreholes instead of drawing water directly from the lake.

Over the years, however, environmental lobbyists have raised concern over the unmonitored use of water from the lake by flower farms, as well as the uncontrolled sinking of boreholes. Farmers around the lake, who initially dismissed the concerns as alarmist, now want the government to control water usage and enforce regulations to protect the lake, including ensuring that permits for domestic water are not used for large-scale farming, a common malpractice.

Minister for Water Mutua Katuku said the government was studying the situation with a view to taking action, adding, "We do not want to reach a situation where we cannot move any more."

According to Permanent Secretary for Agriculture Dr Romano Kiome, the government has drawn up a comprehensive water harvesting and conservation policy within the current Agricultural Strategic Plan that will see stalled irrigation schemes revived. Micro-dams and large-scale boreholes are to be built all over the country for water harvesting. A fresh inventory is to be carried out to establish how many small dams and water pans there are in Kenya.

The last such exercise, done in 1992, put the number of dams at 406 and water pans at 2,254. The new inventory will be useful in the planned transition of water use patterns from the current smallholder and private commercial farms to community-based irrigation.

There are growing concerns that the success of Kenya's flower industry, whose earnings are estimated at $350 million, has blinded the authorities to the reality of the competition, to break the country's domination of the world's largest market - the European Union. Kenya has commanded a 25 per cent market share since 2000 after edging out Columbia and Israel and, last year, its share increased to 31 per cent. But now, emerging suppliers such as Rwanda, Ethiopia and Uganda have designed intensive marketing programmes to promote their countries as friendly for foreign flower investors.


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Ethiopia promises bed of roses for floriculture sector (Flower)

January 4th, 2006


THE Dark Continent is beckoning Indian hi-tech floriculturists who are
making a beeline to set up shop there.

The focus is initially on Ethiopia in North Africa. The reason? Proximity to main consuming markets such as Europe and West Asia, ideal climatic conditions round the year, improved investment code in the country, easy accessibility to bank loans and land availability.

Karuturi Networks, which has a floriculture division, has set up a 50-hectare unit at Holeta near Addis Ababa and is in the process of adding 50 hectares. A few more companies including Pushpam Florabase Pvt Ltd are in the process of setting up their operations in Ethiopia.

"Karuturi is relocating some of its green house assets from India to Ethiopia," said Mr K.S. Ramakrishna, Managing Director, Karuturi Networks. Karuturi, which recently bagged a major order from the UK-supermarket chain Morrisons, is relying on its Ethiopian operations to service it.

The Ethiopian Government offers large tracts of land for floriculture companies on a perpetual long-lease at very attractive rentals. Located in the equatorial belt, Ethiopia has an ideal climatic condition that helps in producing premium grade roses, according to Mr Ramakrishna. Roses produced in Ethiopia are of top quality and command a significant premium compared to the Indian roses, he said.

"Indian growers expect to reap the low freight cost advantage by operating from Ethiopia," said Mr Manjunath Reddy, CEO of Pushpam Florabase. "Freight costs, which account for over 50 per cent of the floriculture earnings, from Ethiopia to Europe are lesser by 50-60 per cent compared to the costs from India," he added.

Indian growers are battling a steep hike in freight costs, which have increased 300 per cent in three years.

Pushpam is setting up a 50-hectare unit in Ethiopia for which the company hadroped in a London-based investor, with whom it had a marketing tie-up, said Mr Reddy.

The company has 11 hectares under cut-flower cultivation near Bangalore.

"Though Ethiopia offers no fiscal incentives, growers can avail themselves of funds at a low rate of interest from the World Bank-assisted fund, which has earmarked close to $350 million for the development of floriculture in Ethiopia," Mr Ramakrishna said.

Karuturi, which had invested $8 million for its first phase of operations, is investing about $6 million for the second phase and is taking assistance from the World Bank fund, he said.

News reports from Addis Ababa indicate that annual flower exports from Ethiopia from the existing units are expected to reach $100 million by 2007, from a little over $20 million at present. Projects by another 100 investors from the Netherlands, Germany, India and Israel — which have acquired 450 hectares of land to set up farms — should generate another $300 million a year by 2007, they said.

Considering the pace at which the Ethiopian flower industry is generating investments, the sector could change the image of the country often associated with famine and acute poverty, the reports said.

The Hindu Business Line

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Ethiopia sows the seeds of growth with flower power (Financial Times)

Kenyan Flower Farms Move to Ethiopia

September 1st, 2005


Kenyan Flower farms are moving to Ethiopia

Insecurity, high freight charges, poor infrastructure and soaring petrol costs are threatening this east African country's biggest farm export, the Kenya Flower Council chief executive officer said Thursday.

Kenya, the biggest supplier of flowers to Europe, already sees at least two growers each month move to neighboring Ethiopia, said Jane Ngige, the chief executive officer of the Kenya Flower Council.

Read More

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Ethiopia flower exports to challenge coffee

June 23rd, 2005


Thursday June 23rd, 2005 13:52.

By Tsegaye Tadesse

ADDIS ABABA, June 23 (Reuters) - Ethiopia's flower business is booming and could one day overtake coffee, its main export commodity, a leader of the horticultural sector said.

Tsegaye Abebe, chairman of the Ethiopian Horticulture Producers and Exporters Association, told Reuters the Horn of Africa nation was currently generating $20 million annually from flower exports, only one tenth of coffee exports.

"But as expansion of farm areas by 32 existing foreign and local investors is progressing, the total export income from flower is expected to reach $100 million by 2007," Tsegaye told Reuters in an interview late on Wednesday.

Projects by another 100 investors from the Netherlands, Germany, India and Israel -- who have acquired 450 hectares (1,111 acres) of land to prepare farms -- should generate another $300 million a year by 2007, he added.

"The aggregate income to be generated from all farms under production is expected to reach $400 million by 2007," he said.

Out of the 100 new investors, Dutch company Sher Agency has received 300 hectares at Zwai, southern Ethiopia -- the largest area ever acquired by a single investor.

"Ethiopia has a great potential and is endowed with vast natural resources," Tsegaye said.

"Given the speed with which investment in the flower industry is developing, the sector will change the image of the country which is often associated with famine and hunger."

Membership of the Ethiopian Horticulture Producers and Exporters Association had risen to 32 from just a handful three years ago. Half of them are foreign investors, he said.

They have been attacted by an improved investment code, a five-year tax holiday, duty-free import of machinery, and easy access to bank loans and land acquisition, Tsegaye said.

So far the industry has provided employment for 13,000 peasant farmers, he added.

"They had never had steady income. (Now) they receive seven birr ($0.80) a day and this has helped them to send their children to schools and lead better lives than previously," he said.

Golden Rose Agro Farmers Ltd, a subsidiary of London-based Rina Investors, is one of the producers of flowers from its farm in Sebeta some 30 kms (20 miles) south of Addis Ababa.

Shahab Khan, farm manager, said the company exports an annual $5 million of roses, mainly to Europe and the Gulf.

Khan said within six years it has expanded its farm from 3.5 hectares to 22 hectares. The company grows flowers in 22 greenhouses with drip lines where water and fertilizer is mixed under computerized central control.

He said the only problem his company faced was lack of air freight to transport their perishable products in time.

"Because of lack of air freight, the company has suffered losses," he said.

Ethiopia's annual coffee production, the biggest in Africa, is estimated between 250,000 and 300,000 tonnes. More than half of this is consumed locally.