Lenders shy away from cut flower exporters

Moreover, the future of the EU as the country’s main market for horticulture depends on whether the East African Community will successfully conclude the long dragging economic partnership agreements (EPAs) with the European Commission.

Government statistics indicate that earnings from the fresh produce sector dropped by 25.5 per cent to Sh19.5 billion in the first half of this year, compared to the Sh26.2 billion in the same period last year, raising fears of another disappointing performance for 2010. 

Kenya National Bureau of Statistics data indicates that export of cut flowers dropped from 39,000 tonnes by June 2009 to 35,220 tonnes over the same period this year, with a corresponding drop in earnings from Sh16.4bn to Sh12bn Kenya Flower Council CEO Jane Ngige said the industry is already making inroads into East Europe and some Asian countries.

The council has been waging a multifaceted campaign that ranges from branding and marketing of flowers to complete value chain management.

Ms Ngige said the signing of EPAs in November will help the industry to avoid disruption in accessing its key markets. 

Economic diplomacy

“At this rate, the floriculture industry needs to leverage on e-marketing and the recently introduced economic diplomacy to speed up its search for alternative markets,” said National Social Economic Council CEO Julius Muia. 

Mr Muia urged industry stakeholders to borrow from the Kenya Tea Development Authority and the National Cereals and Produce Board, which have been importing their own fertiliser in bulk, thus reducing input’s cost.

The industry, he said, also needs to take advantage of the government’s campaign to expand arable land through irrigation to expand operations.

“Other than diversification, we foresee a future where small players in the industry will be forced to merge and automate their operations to keep their costs in check in order to remain attractive to external financiers,” said Mr Magwenzi.