Valentine Growers tropical rose farm.
At the expansive Valentine Growers farm in Kiambu County, workers gather outside on a chilly Tuesday afternoon for some good news that has become rare in the flower industry.
The firm had just won an award at the 2020 International Fairtrade Awards in Germany.
It was the only flower grower to bag the Hired Labour Organisation (HLO) Award, which recognises the company’s use of the fairtrade premium to benefit the lives of its workers and the neighbouring community.
Companies in the fairtrade market apportion a certain percentage of their sales to workers.
Workers here have been able to benefit from loans, bursaries and purchase of household items.
This is a far cry from the firm’s fortunes mid this year when the 24-year-old tropical rose farm faced a moment of reckoning as the coronavirus pandemic pounded the country, forcing it to send home a bulk of its 380 employees.
But just as the flower company and multiple others in the country start to slowly recover, experts warn that new lockdown measures introduced in Europe following a second wave of the virus will erode gains made so far after a year that nearly grounded the industry. With over one per cent contribution to Kenya’s economy, cut flowers form the country’s second-largest export after tea.
Kenya exports about 70 per cent of its cut flowers to Europe.
In a crisis call this week, the Kenya Flower Council (KFC) revealed that traders have already reduced their orders and prices on the Netherlands Flower Auction – the largest in the world – have dropped by 20 per cent.
Ride out wave
Valentine Growers is also all too aware of the challenges that lie ahead, saying flower farms have to forget the record profits they’ve been making over the years and focus on riding out the corona wave.
“This has been a challenging year starting in March when Covid-19 restrictions came into our country. We were badly hit but were able to recover,” said Joram Kanyua, the firm’s marketing manager, reflecting on the year.
At the height of the virus, the flower company had been forced to reduce its workforce but says those laid off have since been recalled.
The restrictions had seen the firm lose about two million stems because of restrictions in Europe, translating to about Sh25 million in losses in turnover.
The floral business was adversely affected by the first lockdown in Europe between March and August.
The firm’s main markets are in countries such as the Netherlands, Germany, the United Kingdom and Australia.
Its cut flowers go directly to supermarkets in Europe where the demand is constant because of contracts that remove brokers or auctions.
However, France, one of the key markets, has introduced new lockdown measures to fight the second wave of the virus, which is now a source of worry.
“From this week, we started receiving information that some supermarkets have started scaling down in Europe, for example, in France,” said Kanyua.
Kenya’s exports of cut flowers and buds to France stood at €6.36 million (Sh820 million) during 2018, according to United Nations data.
Kenya exports the bulk of its cut flowers to the Netherlands, Germany and France respectively.
Disposable incomes in Europe have also fallen owing to the global economic slump, meaning that demand for flowers is set to further dip as they are now a luxury.
KFC Chief Executive Clement Tulezi warned thousands of workers in flower farms are staring at job losses owing to the closure of the sale of “non-essential” items by supermarkets and florists during the lockdown in France.
According to Tulezi, the flower export industry employs over 200,000 directly on the flower farms, while over one million people benefit indirectly from the industry.
Amidst the gloom, Kanyua is optimistic, even scouting for new markets.
“We can’t say for sure how things will turn out, but are hoping for the best,” he added.
Valentine Growers has 15 different types of varieties of roses in all colours, and Kanyua said they’d continue scouting for new markets still in Europe, Russia and China.
He, however, said that capacity would stall for some time until things stabilised.
The firm’s annual production is at about 27 million rose stems.
“At the moment, we’re not talking of increasing capacity. The flower industry is becoming tough every day, and the market is still the same.”
The coronavirus has impacted one of Kenya’s most lucrative industries, sparking worries of the end of the “flower boom.”
“Operating costs are still increasing. It’s not attractive any more. Maybe the only thing we can do is try to introduce other varieties that are appealing to the market,” said Kanyua in analysing the future of the industry.
But riding on the Fairtrade award, he said the main task ahead now is to cushion workers and the community surrounding the firm’s 18-hectare farm from the coronavirus economic fallout.
wwambu@standardmedia.co.ke
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