Flower firms radiant despite earnings drop

January 19, 2011
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, NAIROBI, Kenya, Jan 19 – The flower industry last year raked in Sh30.6 billion, marking a 15 percent drop in earnings compared to 2009.

The decline was attributed to the unusually cold conditions in Europe just before Christmas and the Iceland volcanic ash cloud in April last year.

Kenya Flower Council (KFC) Chairman Erastus Mureithi however said that despite these challenges, volumes estimated at 100, 000 tonnes were not affected.

"Eight months later, I am persuaded now more than ever that indeed the industry is resilient after weathering an enormous loss of 400-500 tonnes of cut flowers worth between $1.5 to $2 million dollars a day," he said of the major blow dealt to the industry last year.

The sector has been facing tough times since 2008 when Kenya experienced civil unrest that saw thousands of workers lose their jobs. This was followed closely by the global financial crisis whose impact was especially felt in 2009 and which affected Europeans purchasing power.

Kenya is the second largest supplier of cut flowers to Europe after Netherlands and accounts for 36 percent of the (European) market.

The industry has however proved its resilience and its ability to rebound as demonstrated by the 2.2 percent growth in exports in 2008 when the country was reeling from the effects of the post election violence.

For this reason, the industry has projected a six to seven percent growth this year driven largely by the ongoing initiatives to improve its performance.

However, players are wary of the competition posed by Ethiopia which has the fastest growing horticultural sector and which is threatening to overtake Kenya as a major producer of cut flowers.

Incentives offered by the Ethiopian government to investors in the sector including provision of water and land, faster processing of permits and the construction of bypasses to ease transportation of the produce to the airport have seen several flower producers relocate to the neighbouring country.

"The biggest grower Sher Agencies who was in Kenya but moved to Ethiopia now has land that is equivalent to what all of us (producers) in Kenya have. This shows that if we become too tough on this industry, we have competitors who are willing to take over,\’ Mr Mureithi cautioned.

However, he said that industry players were forming partnerships that should help them address the challenges they face. Key among these is the campaign to promote local consumption of flowers; an initiative that the council said is bearing fruit.

At the same time Mr Mureithi said a section of growers especially those operating around Lake Naivasha were still implementing measures to ensure the efficient and equitable use of water.

With the help of government agencies such as the Kenya Plant Health Inspectorate Service, they have also been monitoring the lake levels and physical parameters such as pH and EC.

"Farms have put in place strict measures to ensure the prevention of pollution of the environment where waste water is treated before disposal through acceptable means as outlined in the Environment Management and Coordination Act and monitored by the National Environment Management Authority," he added.

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