Category: "Horticulture"

Ethiopia - Ethiopia’s flower sector outgrows Kenya

September 9th, 2007

Ethiopia’s flower sector outgrows Kenya

By CATHERINE RIUNGU

Special Correspondent
The East African


Ethiopia is now Africa’s second largest flower exporter after Kenya, with its export earnings growing by 500 per cent over the past year.

This has left Kenya stunned, given that five years ago, the Horn of Africa country was doing less than $20 million of exports compared with the East African giant’s $300 million.

It is estimated that, this year, Ethiopia will close its books at $120 million, slightly less than half of Kenya’s earnings.

“It has taken Ethiopia five years to achieve half of what we have in three decades,” Kenya Flower Council chairman Erastus Mureithi said.

Going by this rate, Kenya could be overtaken by Ethiopia in a decade, he added.

It is now estimated that Ethiopian flower exports could generate an about $300 million in just another two-three years.

According to the head of the Ethiopia export promotion department, Melaku Legesse, the export estimates are based on revenues earned over the past two years as well as growing demand for licences to grow flowers for the international market.

Investors from the Netherlands, Germany, India and Israel have secured licences for floricultural developments covering 1,700 hectares of land in the central region alone.

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Closer home, investors from Uganda and Kenya have also jumped on the bandwagon, citing incentives they have failed to secure in their own countries. Sher Agencies, a Kenyan flower firm reputed to be the largest flower outfit in the world, is already operating one of the largest farms in Ethiopia.

Two years ago, Ethiopia went shopping for investors who were promised an attractive investment package of a five-year tax holiday, duty free machinery imports, and easy access to bank loans, all these sugar-coated with 70 per cent investment bank funding and easy acquisition of leased government land at $18 per hectare.

The package was rated an alluring snare for project-hungry investors, particularly from Holland, who in addition to Ethiopia’s offer got something else from their own government — development grants for shifting their production to The Horn.

Another notable group of investors were white farmers from Zimbabwe whose farms were seized under President Mugabe’s infamous land redistribution policy. A number went to try their luck in Ethiopia, where they have since settled.

As all this was happening, Kenyan and Ugandan flower farmers were appealing to their governments for support, but their pleas went unheeded even as exporters threatened to relocate to Ethiopia. Two of Uganda’s exporters are reported to have relocated while four Kenyan growers have opened operations in Ethiopia.

Reports now indicate that Ethiopia’s flowers are rapidly gaining market acceptance even in countries like Japan where Kenya, says KFC chief executive officer Jane Ngige, has not made inroads.

A major United Kingdom retail chain, Morrisons, announced recently that it would soon stock Ethiopian flowers such as roses, carnations and the red-brown berried hypericum.

And an Indian floriculturist, Karuturi Networks, is among the latest investors to set up shop in Ethiopia with a 50-hectare farm at Holeta, west of Addis Ababa, and plans to acquire an additional hectare, Mr Melaku reported.

The managing director of Karuturi Networks, KS Ramakrishna, said Ethiopia’s proximity to European and West Asian markets, its climate and attractive investment conditions led the company to establish operations there.

The Dubai Flower Centre has also reported that Ethiopia’s flower industry is showing incredible growth, positioning the country to join the ranks of the biggest exporters in the world for cut flowers over the next decade.

“The rate of growth of the flower industry in Ethiopia is incredible, and the country is bound to rank among the biggest exporters in the world for cut flowers in the next decade or so, due to their ideal agro-climatic conditions, business-friendly environment and strong government support,” said Dubai Flower Centre marketing director Ibrahim Ahli.

There are about 70 flower farms in Ethiopia, of which 45 per cent are owned by local people and the remaining 55 per cent by foreign investors. This is similar to the situation in Kenya, which has just over 100 active flower exporters, half of them foreign-owned and members of the Flower Council, who supply 80 per cent of the country’s exports.

Ethiopia’s diversified agro-climatic conditions make it suitable for year-round production of a broad range of fruits, vegetables and flowers including grapes, apples, citrus, mango, avocado, guava, tomato, asparagus, sweet melon and cut flowers

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Ethiopia - Cut Flower Industry Said to Be One of the Biggest Exporters

May 30th, 2007

Ethiopia - Cut Flower Industry Said to Be One of the Biggest Exporters

30 May 2007

Addis Ababa, Ethiopia (ENA) -
The Dubai Flower Centre (DFC) said that Ethiopia's flower industry is showing an incredible growth pushing the nation to rank among the biggest exporters in the world for cut flowers over the next decade.
Ethiopia Flower Business Booming
"The rate of growth of the flower industry in Ethiopia is an incredible increasing by 200 per cent, and the country is bound to rank among the biggest exporters in the world for cut flowers in the next decade or so, due to their ideal agro-climatic conditions, business-friendly environment and strong government support," said DFC Marketing Director, Ibrahim Ahli.

The Director, made the statement following a series of marketing visits, meetings with public and private sector officials and visits to farms in Ethiopia and Kenya, according to the TradeArabia news report.

Ahli observed that the Ethiopian government had sought to entice investors with incentives, including an improved investment code, five-year tax holiday, duty-free import of machinery, and by leasing land for just 18 dollar per hectare per year.

Ahli said a number of Ethiopian and Kenyan horticulture producers and exporters expressed a strong interest in utilizing DFC's most advanced cool chain and one of the world's fastest growing transit hubs

During the visit, the DFC delegation met with Fantaye Biftu, Ethiopia's Minister of Trade and Industry Special Advisor.

Fantaye is confident that the co-operation with Dubai Flower Centre would enable Ethiopia to access new markets.

Around 70 professionals from the public and private sector involved in the horticulture industry attended the function.

Ethiopia is earning just over 20 million US dollar annually from flowers, according to the Ethiopian Horticulture Producers and Exporters Association (EHPEA).

There are about 70 farms in Ethiopia, of which 45 per cent are owned by local and the remaining 55 per cent by foreign investors.

The DFC was born from a vision to provide a world-class, comprehensive air cargo gateway for perishable goods and to provide state-of-the-art facilities for the logistics needs of the region and beyond.

The centre was set up at a cost of 70 million US dollar. The facility has been designed to boost the overall perishable cargo handling capacity at the Dubai International Airport.

The state-of-the-art transshipment facility has a capacity to handle 180,000 tones of perishable products annually.

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Ethiopia - Kenya - Flower Companies Threaten to Move to Ethiopia

April 2nd, 2007

Flower Companies Threaten to Move to Ethiopia as Workers and Council Protest

The Nation (Nairobi)
April 2, 2007
By Ken Opala

Nairobi, Kenya
- A local authority is targeting flower firms to raise Sh320 million to pay debts.
Ethiopia Flower Business Booming
But the growers warn that further taxation could force them out of Kenya and into the welcoming arms of neighbouring Ethiopia.

Naivasha County Council hosts 47 flower farms that earn Sh32 billion in exports yearly - almost 80 per cent of Kenya's total cut flower exports.

With 75,000 tonnes of exports each year, Kenya is the leading cut flower supplier in Europe, accounting for 31 per cent of the market.

However, the council collects a paltry Sh2.2 million in the form of business permits and land rates from the farms.

"This flower industry has left us poorer," says Naivasha mayor Thomas Gitau. "They have led to increased population, which is seriously straining our ability to deliver services. Yet they don't pay cess."

Raising money

He has set up a team - what he calls Cess Committee comprising farmers, council and government officials - to explore ways of raising money from the farms.

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"This is the kind of money that can help us develop better housing for the farms' workers and rehabilitate infrastructure."

The authority requires Sh320 million to provide water, repair roads, housing and health care for an estimated 40,000 workers in the farms, according to the mayor.

Only one in every four workers is housed by employers on the farm estates; the rest live either in Naivasha Town or Karagita, a makeshift settlement.

According to sources, the council collects Sh36 million yearly against its Sh48 million salaries bill. "Our total collections cannot even pay salaries for the municipal staff," says the mayor.

He draws parallels between the flower farms and tourist lodges in the game reserves. Lodges in Maasai Mara remit cess to the local council, he argues.

Naivasha lacks residential estates and factories - the traditional revenue bases for local authorities.

However, the growers say the country's law protects foreign direct investments from the kind of taxation the council plans.

They say they are already burdened by other remittances such as corporate tax and statutory contributions to the Kenya Plant Health Inspectorate Service and Horticultural Crop Development Authority.

The industry pays Sh22.5 million to the two and Sh10 billion to Kenya Revenue Authority, say sources.

The farmers claim more taxation would increase production costs, and have threatened to relocate to Ethiopia.

Agricultural Employers Association chairman Martin ole Kamwaro says the industry deserves "encouragement", not punitive measures.

"Ethiopia is taking upon itself to encourage foreign investments."

Insecurity and government red-tape had forced a number of flower farmers to relocate to Ethiopia.

Things different

They settled at Alem Gena, 30 kilometres from the country's capital Addis Ababa. Dutch grower Felix Steeghs (owner of Ethioplants) is among those firms that have moved.

"It's easy for the council to think we are making big money here, yet after statutory deductions, we find ourselves with little. Things could be different in Ethiopia," says a flower farmer.

The growers argue that they have created jobs for several people and earn the country foreign exchange.

"There is also fear that local authorities mismanage funds," says Mr Kamwaro.

The council claims the Sh320 million is one per cent of the farm's earnings per year.

Kenya controls 31.1 per cent of the European flower market. "Export volumes rose by 14.9 per cent from 70,700 tonnes in 2004, to 81,200 tons in 2005," says Mr Kamwaro.

The 47 farms have employed over 40,000 flower workers, 70 per cent of them women. But they live in squalid settlements.

"On average they earn Sh4,000 per month inclusive of housing allowance. This is peanuts for people who have come from far to work here," says Mr Peter Otieno, the secretary of the local branch of the Kenya Agricultural Plantation Workers Union.

Karagita where most of the workers live is a rickety jungle of mainly tin mud-walled-houses faced with insecurity and chronic water shortage.

Essential services

The high number of people moving from other parts of the country to work in the farms have increased the area's population, straining the council's capacity to provide essential services.

For instance, a sewage system commissioned in 1984 to cater for 50,000 residents has almost collapsed. Now the population is over 300,000, and continues to increase at the rate of six per cent, says a source in the council. Half of the population comprises workers on the flower farms and their families.

The council is also unhappy that while it suffers chronic water shortage, flower farms have unfettered access to the Lake Naivasha waters. The level of water at the lake is reportedly declining and experts fear it could disappear by 2015 due to over-fishing, uncontrolled abstraction and pollution.

Though farms near the lake use its waters for irrigation, they don't pay any levies to the council.

The town suffers chronic water shortage, but it cannot use water from Lake Naivasha due to Government measures to protect it.

Further, farms and other entrepreneurs around the lake - owners of floating restaurants, tourist hotels and cottages - have blocked community access to the lake.

Initially, the community, with their livestock, could access the lake through 17 designated corridors. Most of them have since been closed.

"Access to water for domestic use is difficult even in the catchment areas," says a report of a workshop organised by the Netherlands Development Organisation (SNV) last year.

Community agreed

Maasai pastoralists are opposed to appropriation of the lake. They said in a memorandum presented at a workshop Kenya Wildlife Service organised in Naivasha last month: "The pastoralist community agreed that the era of feigning ignorance and allow a few individuals to run roughshod on a vital resource that actually embodies their collective desire for economic and social emancipation, will be a thing of the past."

Mr Kamwaro, the group's spokesperson said: "Animals lick dirty and muddy water on the trenches because access to the lake has become virtually impossible."

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Ethiopia could earn $600 mln from flowers in 5 years

March 23rd, 2007

Ethiopia could earn $600 mln from flowers in 5 years
Fri 23 Mar 2007, 13:23 GMT

ADDIS ABABA (Reuters)
- Ethiopia would become one of Africa's leading flower exporters, generating over $600 million annually within the next five years, the country's Horticulture Producers and Exporters Association said on Friday.

The Horn of Africa country generates 60 million euro from flower exports annually, the association's chairman Tsegaye Abebe said.

"In five years, we expect to be one of Africa's leading flower growers with more than 3,000 hectares under production and generating over $600 million in foreign currency a year," Tsegaye said.


"The flower sector in Ethiopia is growing at almost 200 percent annually. New growers come into the business everyday, while existing farms are being expanded," he added.

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Tsegaye said 68 investors had developed 750 hectares under greenhouses and another 150 hectares of tunnel or open field production.

The government is processing land purchase applications by 100 international investors who would like to grow flowers, Tsegaye said during a horticulture exhibition.

Ethiopia's investment policy provides a five year tax holiday which has been a good attraction for investors. Land and labour are also cheap and banks are ready to lend up to 70 percent of the initial investment without collateral.

Tsegaye said 70 percent of flowers produced in the country are exported to Holland

Photo Credit: Walta

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Ethiopia committed to developing flower industry

March 22nd, 2007

Ethiopia committed to developing flower industry

Ethiopian Deputy Prime Minister Addisu Legesse said Wednesday the government is committed to developing the horticulture sector.

"This is aimed at promoting diversity in the countries export product mix," said Addisu at an opening ceremony of Hortiflora Ethiopia 2007," an international flower exhibition held in the capital Addis Ababa.

"No doubt this is also consistent with our effort and program at reducing poverty," said Addisu, who is also minister of agriculture and rural development.

He said his government will do the maximum possible to encourage the development of the sector.

"I believe this initiative ensures the setting up of a clear standard of good agricultural practice whose faithful implementation would make flower farms of our country socially and environmentally responsible," said Addisu.


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Meanwhile, at the same occasion, Tsegaye Abebe, chairman of the Ethiopian Horticulture Producers and Exporters Association ( EHPEA), said Ethiopia is expected to be one of the world's leading exporters of cut flowers within just three to five years.

"The agricultural potential of the horticulture sub-sector is proved to be a vital force for our economic growth by giving job opportunities, introducing new technologies and diversifying Ethiopia's agricultural export product range and bring in much needed foreign exchange," said Tsegaye.

The Horn of Africa country, which prides itself on being the birthplace of coffee, earns about 20 million U.S. dollars annually from flowers, according to EHPEA statistics.

It is still a paltry amount compared to the 334 million dollars 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.

According to the EHPEA, Ethiopia ships out 70 tons 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 advertize that flights from its capital reach European auctioneers two hours earlier than those from Kenya, which means blossoms stay fresher longer.

Organized by the EHPEA, the exhibition is one of the two bi- annual events of its kind in the continent, attracting over 150 companies from 21 countries

Source: Xinhua

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