Catherine Riungu
20 November 2007
Nairobi — Eldoret could be Kenya's solution to the threat posed by Ethiopia in the battle for supremacy in the international flower markets.
According to former Central Bank of Kenya governor Micah Cheserem, now a flower exporter and chairman of the Eldoret Business Council, Eldoret is Kenya's next big flower centre after Naivasha, since the area's climate is as good as Ethiopia's at an altitude of 2,200 meters above sea level, just 100 meters below that country's 2,300.
In addition, Eldoret enjoys good rains, has a good supply of rivers and a cool climate. Besides, the Eldoret International Airport has a 230-tonne cold storage facility and is increasingly attracting big cargo freight orders.
"Eldoret now has everything it did not have previously, especially world-class cargo handling facilities with a cold storage, which is critical to horticulture development," he told The EastAfrican.
The Fresh Produce Exporters Association of Kenya, which last week staged a horticultural fair dubbed Eldoret 2007, said that instead of worrying about Ethiopia, Kenya can open up Eldoret for flower growing.
Chief executive officer Dr Stephen Mbithi said there are new frontiers for Kenya's markets in Japan and Russia which he said: "Love our flowers."
He added that Eldoret and Kericho have the ideal climate for flowers in the country considering their altitude and rainfall distribution.
The Eldoret "discovery" could lead to a major shift given that besides the airport and climate, it is also endowed with large swathes of land under maize, the most important cash crop.
It is also home to the majority of Kenya's international athletes who have invested heavily in Eldoret town, making it one of the fastest growing urban centres in the country.
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's worth of exports compared with Kenya's $300 million.
It is estimated that, this year, Ethiopia will close its books at $120 million, exactly 40 per cent 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 recently.
At this rate, Mr Mureithi added, Kenya could be overtaken by Ethiopia in a decade. It is now estimated that Ethiopian flower exports could generate 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 a rising 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 of Africa.
Another notable group of investors were white farmers from Zimbabwe, whose farms were seized under President Mugabe's land redistribution policy. Some 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.
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.
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.
But according to the Kenya Horticulture Council, Kenya may not have much reason to worry after all.
The country has recorded an 8 per cent leap in market share for the period up to September, widening the gap between it and the next best suppliers - Columbia and Ecuador - whose market share is tied at 25 per cent well behind Kenya's 40 per cent.
That is where Kenya was in 2000 when it edged out Israel and Columbia, the then market leaders. Israel has since retired as a major contender and its place has been taken by Ecuador.
The surge in Kenya's market share, from 32 per cent earlier in the year, is attributed to a shortage of flowers that hit the country over the past two months owing to the abnormal cold weather, creating a serious shortage in Europe.
It is also a blessing in disguise for a sector that had for the better part of this year complained that a strengthening shilling was hurting its business.
Due to the shortage, flower prices have soared, fuelling expectations that the horticulture industry - which last year earned some Ksh49 billion ($731.3 million) in foreign exchange - could this year surpass this figure by a big margin, given that Africa supplies close to 75 per cent of Europe's flowers, almost half of them coming from Kenya.
At the moment, Kenya's flower exports are almost three times larger than those of the next six suppliers from Africa combined.
With Eldoret coming on board, and the Horticultural Crops Development Authority joining in to promote the cold storage facility which has been put up by Canken Ltd and commissioned last week, analysts say that Kenya's supremacy will take a long time, if ever to be challenged.
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