Flower exports gain momentum as NAEB mulls strategies to increase production
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The long wait is over. Finally, after over three years of planned rose exports from Rwanda’s Gishari Flower Park in Rwamagana District, ‘encouraging’ flower shipments have made it to key European market.
Since production started in July, the project under Bella Flowers has shipped over 1.7 million stems of roses over the past months, Business Times has learnt. Only six hectares of the park are currently in production, officials have said.
The Rwf5.3 billion 35-hectare flower farm is expected to produce at least 44 million stems per year, according to Aurore Umubyeyi, the chief operating officer Bella Flowers. She said more than 65 per cent of the roses produced so far have been exported to Europe through the world’s leading flower market in the Netherlands.
She said the firm is, however, targeting other markets outside Europe, in Asia and Africa. “We have already sent samples to Japan to test the market, as well as African countries, and we will be sending some samples to Ghana this month and see how the market responds.” Umubyeyi said they are presently exporting five varieties of roses, but plan to expand to 15 varieties in the near future. The park will mainly grow roses, she added.
As part of export promotion and diversification efforts, Rwanda wants to more than double its flower exports by the end of this year.
The National Agricultural Export Board (NAEB) is working with sector investors and exporters to increase output. The government targets to increase flower production to 44,000 tonnes per annum, generating $140 million in export receipts by 2020, from the current $10 million.
The flower sector was a few years ago projected to bring in $220 million (Rwf166.1 billion) by this year, according to NAEB’s Rwanda Floriculture Development report for 2013. Floriculture was identified by government as a sector that could quickly improve export revenue. The sector has huge growth potential given Rwanda’s conducive climatic conditions and good business environment.
However, the local flower industry has been growing at a low rate of about 5 per cent over the past years in terms of areas under production.
The situation has forced NAEB to intensify initiatives aimed at increasing the production and is also seeking more investors to take advantage of the opportunities floriculture presents.
The country presently plans to develop 650 hectares of flowers from this year, and appropriate sites have been earmarked according to NAEB. The initiative is part of the government’s strategy to increase the sector’s production, as well as boost export volumes and revenue.
It is also aimed at diversification of the export base. NAEB is currently mapping land that is suitable for horticulture. The agro-exports board is targeting a total of 2,000 hectares that will be dedicated to export-oriented production by 2018.
Umubyeyi said the government is working to attract more investors into the sector by designing different attractive investment packages to boost flower business in the country. These interventions are expected to rejuvenate the sector that has stagnated for years due to various challenges, including lack of expertise, capital, and high freight fees.
Invest in infrastructure, skills devt
Umubyeyi, however, said there is also need to invest in developing a pool of local skilled labour, as well as addressing the issue of high freight costs.
“Freight charges are still high...and given the fact that we use passenger planes, securing space in peak seasons is sometimes uncertain,” she told Business Times in an interview last week.
“Given that the cargo potential is increasing as the number of horticulture exporters grows, there is need to re-engage airlines to explore options introducing cargo flights.”
Industry experts say the country has the potential to become a key flower exporter with the right infrastructure, skilled personnel and incentives.
Shungo Harada, the managing director of Bloom Hills Rwanda, a Japanese flower export firm based in Musanze District, called on farmers to introduce a variety of species to become more competitive.
“It is important that the country begins to invest in niche varieties and research on different kinds of flowers as a key component toward making Rwanda’s flower industry more competitive,” Harada said. Harada called for establishment of good infrastructure to be put in place along the value chain, particularly cold facilities to encourage production and value addition.
He also said strong public and private sector partnerships are essential to boost investments in the flower industry.
In an earlier interview with The New Times, Harada urged farmers and exporters to always take advantage of the winter season in key markets to maximise production and profits.
“This is when flowers attract good prices around the world,” he said, adding that working through associations will help both farmers and exporters reduce the cost of operations and maximise profitability.
Donatille Nibagwire, the managing director of FLORIS, a Kigali-based horticulture export firm, said addressing both the logistical and transport challenges has a multiplier impact on the sector.
“The cost of transporting horticulture exports is still high, which affects our competitiveness,” she noted.