Local flower industry confronts global slump


Published on 13/02/2009

Naivasha, Friday

Farm worker Daniel Apinde pushes a cart laden with long-stemmed red roses through Oserian farm, a 240 acre (97 hectares) business nestling on the shores of Kenya’s Lake Naivasha.

The run up to St Valentine’s Day, the most important sales day in the cut flower calendar, has been fairly busy as usual but concerns that the global economic crisis will hit the flower industry niggle at the back of his mind.

“Many are fearful about the future because the way things are headed, many might suffer,” he told Reuters.

Hamish Ker, production director at the farm, hopes the crisis will have a silver lining for Kenyan flowers that have a reputation for quality.

“It is going to be a challenging period but with those challenges come opportunities,” he said.

The depreciation of the pound sterling in the second half of last year cut export earnings to the British market, Ker said. Demand there absorbs 25 per cent of Kenya’s flowers.

“Demand in the UK has dropped drastically though in countries like France, Germany, Norway and Austria, we have not seen any changes,’ said Richard Hechle, general manager at Panda Flowers, a farm that employs 850 people. His comments found an echo in central London, where Sylvia Martin, a shop assistant at the Blackfriars Flowers shop, said: “Business is flat. But then it’s not Valentine’s Day until tomorrow. So that might have something to do with it. But it’s much quieter than last year.”

Producers in neighbouring countries are already feeling the pinch. Tanzanian producers are afraid their businesses are in danger of shutting down and Ethiopia says it missed targets by 40 percent in the last 18 months.

Kenyan farms such as Panda and Oserian have not slashed production but say the earnings outlook this year are hard to forecast.

“We have to sit back and calculate where we are going to go this year,” said Jane Ngige, chief executive of the Kenya Flower Council, which represents 72 flower farms.

The European Union is the main destination for Kenyan blooms. Last year, Kenya exported 2.2 per cent more flowers despite a violent post-election period which specifically hit Naivasha, the lakeside town where most of the farms are located.

Growers there responded to the violence by housing workers on the secure farms and hiring extra security personnel.

The Government also provided armed escort for the journey from the farm to the airport.

The exports are a leading earner of hard currency. Last year, they dropped to Sh40 billion from Sh43 billion in 2007 due to higher production costs and a weaker British currency.

—Reuters.

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Local flower industry confronts global slump
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