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Ethiopia: Country's Flower Sector Outgrows Kenya
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The East African (Nairobi)
11 September 2007
Posted to the web 11 September 2007
Catherine Riungu
Nairobi
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.
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.
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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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