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GLOBAL BRIEFS

Kenya Fights to Wrestle Back EU Market
Horticultural exports are set for an additional standard from next month in a new development by the country to reverse the dwindling share of her produce in the 28-member European Union. Fresh Produce Exporters Association of Kenya chairman Apollo Owuor said the new standard – KS 1758 (Part Two) – applies on fruits, vegetables and herbs.

The standard, Owuor said, will bring all exporters and handlers under a uniform, standard practice and will be the basis on which export permits will be issued. “This will essentially eliminate the possibility of any rogue practice and lack of proper documentation that has in the past led to expensive interceptions at the market entry in the European Union,” he told said.

FPEAK and Kenya Flower Council, which represents large-scale flower producers, have also partnered to launch the Kenya Horticulture Council in a bid to help the horticulture industry jointly articulate sector concerns. KFC and FPEAK have previously dealt with sub-sector matters separately, leading to delays in responding to arising issues as well as increased costs, the interim chair of the Kenya Horticulture Council Richard Fox said. Owuor emphasised that the council is not a merger between the two organisations, but a joint entity which will address issues of mutual interest. The new body has been set up with technical and financial support from USAid through the Kenya Agriculture Value Chain Enterprises. Kenyan exporters have since 2012 faced challenges in the EU over excess pesticides and quarantine pests which has cost the country billions of shillings in export losses.

“We have spent the last five years developing systems to ensure that the challenges of excess pesticides and presence of quarantine pests does not haunt the industry again,” Owuor said. Latest data indicates that the sector earned Sh102.5 billion in foreign exchange earnings in 2016, the second largest after tea, with a steady growth of 10 per cent despite the challenges. The sector’s contribution to the country’s gross domestic product – national wealth – is estimated at Sh200 billion.

Uganda: Flower Farms Licensed as Free Zones
uganda Free Zones Authority (UFZA) has issued two developer’s Licences to M/s Fiduga Limited and M/s Royal Van Zanten Limited. The companies are meant to develop Free Zones in Mukono and Mpigi Districts in Uganda.

A Free Zone is a special designated area where goods introduced into the area are generally regarded, so far as import duties are concerned, as being outside the Customs territory. These include Export Processing Zones or Free Port Zones.

Ms Evelyn Anite, the minister of State for Privatisation and Investment, speaking during a field tour at Nsimbe estates recently, said the two companies that are already in the business of exporting, will further contribute to towards addressing the export gap by investing up to a tune of US$ 365 million (about Shs1.3 trillion) by 2021. “This feeds into the Government’s Vision as enshrined in the National Development Plan II and Vision 2040 which are Frameworks aimed at ensuring that Uganda attains Middle Income Status,” she said.

Uganda Flower Exporters Association (UFEA)’s executive director, Ms Juliet Musoke, said: “This year we exported more flowers compared to the previous year 2015.” In 2015 the country through UFEA members exported 6,300 tonnes of flowers worth $27.5 million (Shs99 billion). Ms Musoke also said in the year ending 2016, UFEA exported more than 6,500 tonnes of flowers, 200 tonnes more than what was exported the previous year.

The chairman board of directors of UFZA, Eng Frederick Kiwanuka said: “Licensing these two companies today brings the number of licensed Free Zones in Uganda to five including M/s Arua SEZ Limited which is setting up a Special Economic Zone in Arua District., M/s Uganda Wood Impex Limited in Kalungu District and M/s Nilus Limited in Jinja Municipality.”

THE BENEFITS
M/s Fiduga Limited and Royal Van Zanten Ltd Fiduga Ltd projects are likely to hire 927 workers while Royal van Zanten Ltd anticipates to create 1,625 jobs by 2021, majority Ugandans. This will mean enhancement of the skills of the local community and improving their social economic standards

 
INDUSTRYBRIEFS

A New Flight to UK
A new flight from Kenya bringing fresh vegetables and flowers to major UK suppliers has landed at Doncaster Sheffield Airport. A water arch celebrated the arrival of the aircraft in the traditional way – marking DSA’s first scheduled flight handling perishable goods. The airport secured a deal with Network Airline Management and the weekly service is from Nairobi. It comes as it celebrates being named the fastest growing in the country, after experiencing 43.1 per cent growth with 1.3m passengers in the year to April. The latest cargo figures also show a new record after a 113 per cent annual increase in 2016.

Dayle Hauxwell, cargo manager for Doncaster Sheffield Airport, said: “We are delighted to be announcing this news so soon after seeing record cargo figures for last year.

“We’ll be working with Network Airline Management to handle a weekly scheduled flight from Nairobi with flowers and vegetables for the UK market. This deal will see some 3,500 tonnes of cargo transported a year. This new scheduled operation also opens up the opportunity for UK export freight. “Our entrance into this new market is further evidence that the cargo operation has established an international reputation as the UK’s most freighter friendly airport. And we believe this is just the beginning. ”The airport was certified as a port of entry for perishable commodities last year, allowing it to access a significant global market. With offices across the globe and handling over 70,000 tonnes of cargo annually, the Network Aviation Group heads up a division of cargo companies. Network Airline Management, the freighter division, operates a fleet of B747F and MD11F aircraft on a scheduled and charter basis throughout the world. Andy Walters, commercial director, said: “Doncaster Sheffield Airport offers a 24-hour operation, is very freighter-friendly and considerably less congested than other locations. It also has a very pro-active team. With partners Anglo World Cargo, they work hard to deliver a tailor-made service.”

Behind the Scenes at Breeders in Kenya
The IFTEX is in full swing and visitors from all over the world took the opportunity to not only attend the show this week, but also visit the growers and breeders at the farms in Kenya. Nowhere in the world are more roses grown than in Kenya. Unlike Colombia, which is still a solid second, the acreage is still growing as well. Not quite as fast this year though, Haiko Backer of Schreurs tells us, in light of the upcoming elections causing civil unrest. But once that’s over with, the will and means to invest are somehow rekindled, and the way up is found again. It always happens like that, he says, and with 11 years under his belt he knows what he’s talking about. There’s still room for expansion, and the factors making Kenya such a suitable flower production country are still the same: the equator, the sun, and the altitude. Lake Naivasha, the main source of water, isn’t going anywhere fast either, and the political and economical situation are mostly stable. And they know what they’re doing here: compared to Colombia, here they produce significantly more stems per meter.

Chrysal Africa 12 Years Strong in East Africa
‘Improve the quality of flowers exported out of East Africa.’ This has been the goal of Chrysal since they entered this part of the continent 12 years ago. Since the very beginning, they were exhibiting at the IFTEX, which has helped this company to be one of East Africa’s largest suppliers of flower food and post-harvest treatment suppliers in East Africa.

Chrysal in Kenya
Chrysal has been present in East Africa for 12 years now. Since 2005 Chrysal has been represented through a distributor channel selling Flower food out of Kenya and working closely with surrounding East African Countries. In a period of 5 years, Chrysal grew, thanks to the interest and support from the region’s growers. This support and interest led to the decision for Chrysal to firmly plant its roots in Kenya and in 2009 Chrysal decided to start their own production and manufacturing plant based in Nairobi located 3 km from the capital’s airport. Since 2010, Chrysal has grown steadily, to become a leading supplier of Flower Food and Post-Harvest Treatment Suppliers in East Africa; gaining the confidence of the growers, with its innovative and world leading Post-Harvest Treatments and Flower foods products supported by its teams and resources. Not only has Chrysal become a well-known supplier of grower products, its Technicians are well respected in the industry and called upon to advise the growers on a number of issues from pollution control to product and process management. Though Chrysal is still considered a small multinational company, however we are now also present in Ethiopia, Uganda and Tanzania and have a continuously growing list of clientele in all countries.

Duty Hurts Kenya’s Export Plan To China
A four per cent import duty levied on Kenyan flowers has slowed effort to develop an alternative market in China despite a direct aviation link between the two countries.

China, alongside Australia and Japan are among the key markets that Kenyan exporters have been looking to in their efforts to diversify beyond the European Union market.

“The four per cent duty has made our flowers more expensive in China market compared to the EU countries where we sell duty-free,” Kenya Flower Council chief executive Jane Ngige at this year’s International Flower Trade Expo that was opened in Nairobi on Wednesday. About 300 exhibitors and 5000 flower dealers attended the event.

“We are calling upon the Kenyan government to negotiate the removal of the tariff with China the same way flowers from Ethiopia access its market duty free,” Mrs Ngige said.

Flower is a highly perishable good that must be sold two days after harvest. The national carrier, Kenya Airways enjoys a 13-hour direct flight to three Chinese cities — Beijing, and Guangzhou.

On July 1, 2010, China removed tariffs charged on 60 per cent of goods that it imports from Kenya and 32 other developing countries but retained the levy on cut flowers.

The tax has thwarted aggressive marketing effort aimed at penetrating the 1.3 billionpeople market. Mrs Ngige said the Kenya Flower Council members and traders visited China and exhibited flower products in bid to establish sale contacts.

“China is an exciting market and we are equally interested in deepening our foot prints in the larger Asian market,” she said.

Last year, Kenya exported flowers worth Sh70.83 billion, majority of it destined to the EU markets where still enjoys a duty and quota-free export arrangement despite delay in concluding the Economic Partnership Agreement. Kenya also has a duty free flower arrangement with Japan.

Mrs Ngige said the industry’s export diversification drive also targets markets in other Asia and Far East countries adding that China which produces long flowers would be a favourite for the Kenyan roses.

“Over the years as volumes of flower industry and market grows, regulators should give it ample time. We, for instance, expect the Kenya Plants Health Inspectorate Service (Kephis) to expand its operations by adopting a 24 hours’ work cycle,” she said. At the moment, Kephis issues 1000–Psyco-sanitary certificates daily to exporters of fresh produce.

The KFC wants the agency to create more time for issuing certificates, inspecting and verifying destinations before flowers leave airport “as it is discomforting when one’s products have been duly inspected in a hurry, ends in one destination and paper work in another destination.”

Despite Uncertainty Regarding Brexit,More Flowers Sold in the UK
It seems the British are spending more on flowers and plants again. At least, that was evident during Valentine’s Day and Mother’s Day period according to a market visit of Royal FloraHolland and a number of growers conducted in the spring of 2017 in the UK. During this market visit to the Cash&Carry’s and florists near London, it became clear that sales were good around the holidays. Despite the uncertainty associated with Brexit, these companies realised an increase in turnover in the first quarter.

Greatest increase in seasonal flowers
Traditionally, the list of the top 10 cut flowers sold in the UK is headed by roses, chrysanthemums, lilies and carnations, but in the last two years, seasonal flowers like tulips and amaryllis and year-round products like gerbera and lisianthus have become increasingly prominent. Around 50% to 70% is currently ordered and delivered via the Cash & Carry webshop. This has resulted in fewer florists physically coming to the Cash & Carry.

New Covent Garden Market opens at new location
The largest wholesale market in the UK, New Covent Garden, changed its location on 3 April 2017. Royal FloraHolland and a number of growers visited this new, lovely and fresh location. The new wholesale market consists of 25 flower and plant dealers and a few hardware and pottery suppliers. Many dealers confirmed that they had a positive result for the first quarter of 2017 compared with last year.

Outlook of top-segment florist improving
During the market visit, the tour stopped by many top-segment florists in London. These florists are leaders for the market as a whole. Many local, smaller florists look up to them and copy their trends. The various interviews revealed that they had a positive result in the first quarter. This is due particularly to the currently strengthening economy.

There is little effect of Brexit visible, except for the fluctuations in the exchange rate of the pound. The florists have noted primarily an improvement in the commercial and major events market. Many companies, hotels and catering outlets are again spending money on horticultural products, and the demand for floral subscriptions is increasing according to the dealers. “The British want to be cheered up with flowers in this turbulent time of uncertainty, war and attacks.”

Supermarket loses market share to online
The supermarket channel is and will remain the most important sales channel for flowers in the UK, 47% of consumers buy flowers via this channel. But in the last year this sales channel seems to have passed its peak, and there is a shift evident towards online and the top-segment florist. The online channel in particular has expanded dramatically in the past 5 years, from 3% to 13% in 2016. The number of companies offering flowers online has exploded, and there is a lot of competition. There is still plenty of growth possible in the British market despite the approaching Brexit. British consumers love flowers and will keep buying them even in these turbulent times.

Growth is primarily evident in the online segment and the top-segment florist. Consumers are buying more from the online channel, and the demand is increasing for exclusive flowers from florists for the commercial and major events market. Florists are looking for luxurious, exclusive flowers that are unavailable or less likely to be found in the supermarket so they can distinguish themselves from the rest.

New FSI Website Live!
FSI proudly announces the launch of the new website at www.fsi2020.com! With a fresh and modern look,the new FSI website supports visitors to understand the approach and commitment to improve sustainability in the floriculture industry. The re-designed website is fully responsive and gives easy access to useful information about the ambition and approach of FSI. Visitors will find relevant documents and useful links in the new “resources” section, and of course the website content will constantly be updated with helpful information, articles and new results.

FSI invites everyone to pay a visit online and greatly appreciatesanysuggestions, feedback or comments, so do not hesitate to send us an email at This e-mail address is being protected from spambots. You need JavaScript enabled to view it . And why not join our growing network?!

 
Ethiopia is Still Africa of Course – Nothing is easy

Frank Ammerlaan: ‘ Why did you decide to go to Ethiopia?
“After we’d completed our studies in Business Administration and Plant Sciences respectively, my brother Wim and myself joined our parents in their business, a 3.3-ha rose nursery in Rijsenhout. But rose cultivation was becoming less profitable in the Netherlands, due to the increasing costs and the imports from Africa and South-America. So we decided to start a rose nursery in Ziway, as part of the Sher Ethiopia project. Our greenhouse in Rijsenhout is filled with cut hydrangeas nowadays.”

Why Ethiopia?
“In my final year at university, I studied which African country offered the best business opportunities for a rose farm. In those days, the safety in Ethiopia was an important advantage which they had over other countries. Ethiopia has a good climate, there’s little to no corruption and the country offers favourable conditions to investors with regards to taxations and loans. The population is proud of their country and wants to collaborate. And the fact that it was relatively easy to start up with Sher Ethiopia through a lease-purchase construction, really helped.”

How would you describe the country’s safety these days, after the riots of 2016?
“It’s been calm here for quite a while. The riots were local. Even though there weren’t any incidents in our region, everyone’s alert now. The Dutch government, the Agricultural Counsellor and various Ethiopian authorities are really on top of it at the moment, but you can’t expect 100% safety anywhere of course.

The Ethiopian delegation who spoke at the seminar pointed this out too. By African standards, Ethiopia is still a very safe country. The feeling of freedom still prevails. That’s how I feel, too.”

How do you like the country as an entrepreneur?
“It’s still Africa of course; nothing is easy. You’ve got to adjust. Lots of things are changing and developing. But the educational system is still behind. The infrastructure isn’t as far along as in the Netherlands either, but with all the heavy investments made these days, it’s going in the right direction. All our staff are Ethiopians – 1,200 people, most of them with little education. That isn’t always easy. But what we do in our company can actually be considered an excellent form of development work. It’s really satisfying when people develop themselves within our farm. Some of them started out as a labourer and have very important functions with the company now. Collaborating and respecting each other, that’s essential.”

Any plans to expand into the new horticultural area Hawassa?
“There are always plans, but expansion isn’t our goal. We currently have 38 hectares in production and ship 100 million roses to Royal FloraHolland’s auction and to clients in Japan and Dubai each year. We manage our processing and sales activities in the Netherlands ourselves. We’re not a low-cost business. We want to distinguish ourselves through a high level of quality. Expansion doesn’t necessarily lead to higher profits. We’re currently making a good living.”

 
Understanding Code of Practice for Fresh Fruits and Vegetables

A code of practice is a set of written rules which explains how people working in a particular profession/ sector should behave. Kenya has developed the KS1758 Code of Practice for Horticulture Industry: Part 1 deals with Floriculture, and Part 2 deals with Fruits and Vegetables, in line with international standards.

Recently, the fresh produce exporters of Kenya (FPEAK) held a successful Industry which attracted many stakeholders, including growers, suppliers, stakeholders, government agencies, and development agencies, among others. Speaking uring the conference Mr. Andrew Edewa of Compliance Kenya Ltd. took participants through the soon to be mandatory for exporters and producers to comply with KS1758 as a basic standard.

But then, why do organizations, industries and professions come up with the codes of conduct and practice? Are they really necessary?

Well, the horticulture industry in Kenya in conjunction with the government too, have developed their own code of practice to guide the players in the industry.

Read more...
 
Reverse Osmosis Systems Enhance Water Quality of East-African Growers

Osmosis is the passing of a liquid through a membrane from a lesser concentration to a greater concentration. Eventually, both liquids would be of equal concentrations. Figure 1, page 48, demonstrates how this reaction takes place. A good example of osmosis is how plants uptake water.

Reverse osmosis (RO) puts pressure on the greater concentrated liquid and forces it through the membrane to the lesser-concentrated liquid, hence the term, reverse osmosis. The membrane traps particles and impurities down to 0.0009 micron, and the effluent or permeate water is very clean and free from impurities. Figure 1 demonstrates how this works. So at its most basic level, reverse osmosis filters impurities from a liquid, namely water.

By starting with water that is free from impurities and minerals, RO water can help make growing more calculable, since the water quality is constant. Nutrients can be better controlled without having to worry about what is in the water source at the beginning of the irrigation process. Contaminants in the water source, such as iron, manganese, calcium, magnesium and chlorine, can react with the nutrients and cause problems with fertilizer mix.

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Logistics, Markets and Market Access

Sylvie Mamias from Union Fleurs told the conference that her organization is involved in lobbying and advocacy on behalf of flower exporters, especially into the European Union. Her organization has worked with the Kenya Flower Council on the economic partnership agreement with the EU. She talked about the challenges and opportunities that exist for market diversification globally. She mentioned that whereas Kenyan flower producers have a competitive edge over their competitors in the region, there is still alot of room for diversification. She called for concerted efforts and constant dialogue between the industry players in order to understand the needs and requirements for getting into emerging markets, and the need to optimise the enabling environment for market diversification. She urged players to identify where potential growth markets are and to understand how they can best penetrate them.

Ms. Mercy Achola of Value Connect said Kenya can diversify its market for flowers in the Middle East, especially via Dubai, which is an economic hub and through which exporters can access two thirds of the world within 8 hours, and one third of the world population within four hours. “There are 200 nationalities living and working in Dubai and Dubai is well connected by sea, air and road. It has a population of 52 million people, and it is the gateway to the Middle East. Of the 52 million people, half of them are representatives of an expatriate community, who are high spending consumers and this is an opportunity that Kenyan flower exporters need to take advantage of,” she said.

Currently, the challenges exporters face are like a long documentation process, little cargo space and abrupt downgrading of aircrafts. She suggested that there needs to be a balance between how fast the documentation can be done and making sure that producers export flowers that meet international standards and quality. The flower industry also needs to approach the airlines as one, especially now that they have the Kenya Horticultural Council to speak for them.

Ms. Matthea Van der Mollen from Royal FloraHolland Kenya spoke about expanded market opportunities that are opening up in China because of its large population of young and working class. This is an opportunity for Kenyan flower exporters to diversify to the Far East. Her organization is helping to build a trade link from Kenya to three cities in China - Shanghai, Beijing and Guangzhou. Shanghai alone has a population of 24 million people, many of them already consuming flowers. Royal FloraHolland has discovered that more Chinese are buying flowers and other items online and this is something that exporters need to keep in mind as they seek to penetrate the Chinese market.

Exporters should focus on women ages 25 to 40, most of whom are the consumers of flowers. Challenges of handling, storage and logistics exist but Royal FloraHolland is working with other stakeholders to try and overcome these challenges. They estimate that by 2020, 200 million stems from Kenya and Ethiopia will be exported to China.

Mr. J.M Mandelbaum from Steward Ventures told the meeting that it is unfortunate that banks in Kenya ignore biologicals and don’t count them as collateral when they consider a farmer’s assets. He said that Steward Ventures is developing crop insurance in Kenya for flowers and they are also educating lenders about how they can use the crop insurance and the crop to bring comfortable lending for crop producers. He said they are working with lenders and lawyers in trying to de-risk lenders’ experience in cultivation and in trade. He said that de-risking of flower value chain will create sustainability in the industry since it will remove the risks and uncertainties inherent in the flower industry in Kenya.

Mrs. Jane Ngige from KFC said that Kenyan flower producers have done very well in terms of exporting roses, having 40% of the European market share, what is the next crop after the roses in this country? She added that KFC has cultivated a new working relationship with the government, and with stakeholders in the civil society to make sure that the industry works in a more harmonious and in a sustainable manner.

 
Standards for Enhanced Sustainability Throughout the Value Chain

Mr. Charles Ongwae from the Kenya Bureau of Standards (KEBS) informed the conference that the role of Kenya Bureau of Standards is to develop standards in commerce and industry and in that regard; KEBS has worked with Kenya Flower Council (KFC), Fresh Producer Exporters Association of Kenya (FPEAK) and other key stakeholders to revise KS1758. He encouraged all producers to implement standards to help them in planning, to improve their operational efficiencies and for cutting down costs. He said KEBS works with flower producers to protect the consumer from exposure to certain chemicals which might be dangerous to their health. He encouraged the producers to embrace KS1758 in order to become more effective and efficient in their businesses.

Mr. James Wahome from the Kenya Plant and Health Inspectorate Service (KEPHIS) told the conference that all standards applied in the country are found in Cap 319 of the Agricultural Export Act of the Kenyan Laws. He reminded participants that different countries have different laws that govern the import of goods into their countries. He urged the sector players to always consult with KEPHIS in order to keep abreast with the standards and the requirements that are necessary. He spoke of challenges that exporters are likely to encounter like interceptions in the international market, and inconsistencies in rules which keep changing, especially in the EU market. He said that market access is a dynamic function that also keeps changing with changes in technology.

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