Business
Two Uganda flower firms for Nairobi flower expo
Publish Date: Jun 03, 2014
Two Uganda flower firms for Nairobi flower expo
Sivalingam Ravikumar, the Farm Manager, Rose Bud Limited at a local exhibition in December
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By Sebidde Kiryowa   

Only two of 18 Ugandan flower growers and exporters have confirmed they will take part in the third International Floriculture Trade Expo (IFTEX) which kicks off tomorrow at Oshwal Center, in Parklands, Nairobi.

The farms are Rose Bud Limited and Mairye Estate. 

Juliet Musoke, the executive director, Uganda Flowers Exporters Association (UFEA), the umbrella organization bringing growers and exporters of flowers in Uganda together, says as an association, they have not participated in IFTEX and that the flower farms which are taking part are doing so on their own.

International expos of this nature are vital in creating exposure and securing market for Ugandan flowers on the highly competitive international floriculture arena. 

They are an enormous promotional tool, creating a bigger export growth opportunity for Ugandan flowers especially through direct sales.

UEFA says 80% of Uganda’s flower exports go to direct sales while the rest go to the auction.

Flower exports which began in 1993 are the third largest non-traditional export after gold and fish today.

They offer direct employment to 8,500 people and support an estimated 51,000 livelihoods with a total sub sector investment of between $80 and $100m.

Of this, $20m goes back into the economy in the form of taxes wages and infrastructure development.

Musoke declined to explain why UFEA officially never took part in IFTEX the obvious benefits notwithstanding but an industry insider says that most flower farms in the country are too small to make sense of such expos.

“Most flower farms in Uganda can barely satisfy the markets they are serving currently and many are not really looking to expand.

 An expo of this nature requires capacity on the side of the flower farm to satisfy new markets and standards. Our farms lack this kind of commitment,” says the source.

     
Rosebud Limited, located off Entebbe Road, is the largest exporter of Sweetheart Cut roses from East Africa and largest exporter of roses from Uganda.

The farm produces approximately 40% of total Ugandan flower exports. Mairye, which is located in Ntinda Village, Busukuma Sub-county, Wakiso District, produces about half that amount.

Three years after its launch in Nairobi, IFTEX is one of the fastest growing flower trade shows and is the only flower growers’ event that attracts growers from other continents to exhibit their flowers in Africa.

Jasper van Dijk, the Marketing Manager, HPP Exhibitions, the organisers of the three-day expo, says attendees of the third edition of IFTEX have increased with 300% compared to last year’s expo.

“Buyers from over 40 countries have signed up to attend the three day flower trade event that has attracted almost 200 exhibiting companies from more 16 countries.”

Sivalingam Ravikumar, the Farm Manager, Rose Bud Limited says IFTEX’s growing popularity shows that there is a fundamental shift in the floriculture market towards Africa with Kenya as the hub, something he says Ugandan flower farmers can take advantage of.

“As Ugandan exhibitors, we will showcase and promote Ugandan flowers to international buyers because so many international flower buyers do not even know that there are serious flower farms in Uganda,” says an official from Mairye Estate.


“Every year, we have had to travel as far as the Netherlands to participate in prestigious Hortfair exhibition to tap into the international market. We also had to open an office in the Netherlands to coordinate our sales.

This exhibition has brought the international market to us,” says Ravikumar.
 
He says Rosebud, which exports 13 million stems monthly on 45 hectares of land today realized a 10% increase in sales after their participation in IFTEX last year.

“We have already embarked on an expansion plan from 45 to 50 hectares which will increase our total output to 15 million stems per month. All this is preparation for our participation in this year’s IFTEX where we hope to realise a 20% growth in direct sales.”

Ravikumar says the anticipated growth in sales is due to the increase in international interest in the expo.

“Last year was only the second time and not that many people knew about the expo. This year, however, we have more buyers from as far as Australia, USA, Russia, Singapore, Malaysia and the traditional markets in Europe – France, Germany, Italy and Holland among others.”
  
State of the flower industry

Perhaps because of some flower farmers’ marketing initiatives, recent media reports indicate that Uganda’s flower industry is regaining its export volumes.

According to UFEA, 6.7 million Kg (6,773 tonnes) of flowers were exported by the end of last year up from 6.4 million kg (6,444 tonnes) in 2012.

“We estimate the export sales for 2013 at $37.2m up from $36.3m for 2012. This performance shows a 2.4% increment, and we have been seeing a steady growth since 2010 which saw the lowest volume and sales since 2006,” Musoke told the media earlier this year.

The industry now meets the demand for Ugandan flowers as a substitute for the Kenyan and Ethiopian flowers that were affected by weather and disease in 2013.

There has been an average annual growth of 20 % in flower production in Uganda over the last eight years.

Challenges

The flower industry in Uganda is still struggling to stay afloat in the face of international exporters.

“Our competitors have preference for intermediate and T-hybrid roses which attract a good price yet Uganda’s niche is sweetheart roses,” Musoke told the media.

Last year, Musoke said Uganda has not had new investors in the Flower Industry for the last eight years because of lack of government recognition and specific development support to the sector.

She gave Ethiopia, a recent entrant in the flower sector that now has over 1000 hectares of flower gardens compared to 250 hectares in Uganda because the Ethiopian government intervened with incentives to attract investors ten year tax holiday, subsidized air freight, land leased at nominal rates with green house infrastructure and 70 percent investment loans at low interest rates.

Musoke said the cost of energy is also prohibitive for the farmers.

Most florists use generators for more than 40 percent of the time at a cost of sh10-30m a month.

This is worsened by the cost of diesel which has increased by over 55% in the recent past.

Electricity bills, she said, on average amount to between sh10 and sh20m which makes the industry uncompetitive.
In order to improve the situation, Musoke called for research support that should be directed to open field crops and summer flower cultivation focusing on local crops with a market niche.

She called for use of tissue culture, local substrate materials, organic fertilisers and integrated pest management requirements.
 
Related stories

Flower farms drive fish away from Lutembe

Museveni opens $11m Ntungamo flower farm


 

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