Flower industry gets timely shot in the arm

Uwizeye has been struggling to grow roses for the past two years with little success. Although he has engaged agriculturalists, there is nothing to show for all the effort at the four-acre project. But all this could change, thanks to the funding the sector has secured to develop the cut flowers sub-sector.
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Uwizeye has been struggling to grow roses for the past two years with little success. Although he has engaged agriculturalists, there is nothing to show for all the effort at the four-acre project. But all this could change, thanks to the funding the sector has secured to develop the cut flowers sub-sector.

Jean Marie Munyaneza, the National Agricultural Export Board (NAEB) horticulture international marketing officer, said the government has earmarked $21.8m (about Rwf14.4b) to promote flower growing in the country.

The project, which is already underway, will see NAEB set up a greenhouse on a 30-hectare piece of land, where they are currently working on an initial 20-hectares as a model project to rejuvenate flower growing, especially cut roses, and resume exports.

“The project will be in three phases on a 100-hectare. We will put up greenhouses on 30 hectares of land in the first and second phases respectively and later, work on the remaining 40 hectares.

“It is mainly intended to interest and encourage the private sector to join the lucrative industry. It is being developed on the buy, own and transfer basis, where we shall eventually sell to private operators,” Munyaneza said in an interview yesterday.

He revealed that the flower park that is located in Rwamagana in Kayonza District would be fully serviced with water, power, roads and other amenities and that investors would only be required to bring their own greenhouses to the site.

“The government has injected a lot of money, the private sector should come and join us as we revive the sector that was hit by the 2007 financial crisis in Europe.”

Munyaneza said the country stopped exporting roses to Europe in 2008, after the sole exporter, Rwanda Flora could not sustain the market due to low volumes.

Although the firm later resumed exports, it concentrated on the regional market in Gabon and Congo Brazzaville, as well as serving the local market.

But this has also been affected by lack of transport as Rwandair does not have cargo space for the flowers.

Munyaneza said though they were negotiating with Ethiopian Airlines to transport the 30 tonnes of flower at $52,000 (about Rwf34.3m) per tonne. The company exports white lillies, carnation (pink and white) and tuberoses.

He said the government was also negotiating with Rwanda Flora to develop its 20 hectares of land as way of helping the firm gain its flower growing potential. He added that they would introduce summer cut flowers at the project. NAEB is also helping other farmers in Nyanza and Rubavu who are expected to start exporting summer cut roses in June.

Once the acreage under flowers increases, the country will save Rwf330m or $500,000 it spends on flower imports.

Presently, Rwanda has been focusing on production of ornamental flowers.  Farmers from different parts of the country produce 262,448 stems per month, generating Rwf8.3m per month.

Munyaneza said the government would support farmers technically and otherwise, until the sector is strong enough to stand on its own.

Meanwhile, the Rwanda Flower Producers and Export Federation has secured a $107m (about Rwf70.6b) five-year development loan from a European bank to finance a new flower growing project.

“Once we build greenhouses and start cut rose shipments by July, companies are waiting to buy into the enterprises, expand and capitalise them. Kenya has water shortage problems and cannot be able to expand acreage. They are waiting for Rwanda to start and come buy,” Gabriel Ngendabanga, the federation president, said in an interview with Business Times.

This and the government intervention is sort of a reward to Uwizeye’s persistence and patience.

Ngendabanga, who is also the chairman board of directors at the Horticulture Council of Africa, said they would set up the project in Nyange sector, Musanze district.

“The federation has already signed a deal with de Ruiter, a Dutch flower firm with branches in Kenya and the US, to supply us planting materials,” he said.    

He said they had also signed an agreement in December last year with Iluba, a South African company, to grow roses, which they will sell to the company. The firm, he added, will also bring new specialised technology to dry flowers to give them a longer shelf life of about six months.

“We will grow roses like Red Ribbons, Esperence, Tropical Amazon, Finess, Marie Claire, Everlasting Lavender and Son Risa, among others, for this purpose,” he noted.     

The partnership with the South Africans, he added, would give them a big advantage to penetrate the US and Japanese markets. He revealed that Finland was also interested in Rwandan-grown big head roses.  

What the a loan will do      

The loan is huge boost to the sector that is presently crawling given the low production capacity and the huge import bill of flowers. The loan deal to be signed this week will see the cut roses sector set up 30 farms on 150 hectares initially, hitting 300 hectares over the five-year loan period, Ngendabanga said.

The funding involves equipment, greenhouses and one expert to manage the project, as well as a provision of making of flower packaging materials locally.

Once fully established, the cut roses sub-sector will create thousands of jobs and boost the country’s balance of payment position, besides bolstering the economy.

The federation has already trained 113 workers in greenhouse management, packaging and branding, crop husbandry, ICT, irrigation and flower handling.

Challenges that are crippling the sector

The sector lacks skills to undertake large scale cut roses growing. This has contributed to most farmers taking to ornamental flower growing, which is not as lucrative as the cut flowers business. Besides, most of the ornamental flowers are sold locally, meaning that the country loses out on foreign exchange earnings.

 The sector is also capital intensive and requires a lot of money to start, which scares away most local people interested in growing flowers for the export market.

“One needs about Rwf500m to grow hectare of roses. This kind of money is not easy to come by, especially considering that banks don’t want to lend to agriculture. You can have land, manpower but when you don’t have money…No local bank wants to fund a rose project, but if you are lucky and get a bank willing to give you the money, the interest is as high as 30 per cent annually. But you will be like a slave of the bank; they will target your house, land and other assets,” Ngendabanga explained.

He said the money is needed to set up a greenhouse, buy equipment to use on the farm, build infrastructure like roads, electricity line, water channels and computer systems.

The cold chain at the airport is not accessible all the time. “The cold chain facility is not at the reach of the private sector all the time as they close the entry at a specific time, limiting access. When the entrance is closed, where can you take your flowers?” Ngendababga asked. 

What can be done to make the sector a top foreign exchange earner

The government should offer incentives like reinstating the 70 per cent tax waiver on horticultural exports to attract investors.

“If this is done, it will encourage more exporters unlike if the government gives us land or the cold chain facility at the airport,” Ngendabanga observed.

He also called on the government and NAEB to sensitise the private sector about the benefits of growing roses, saying the sector could be the leading foreign exchange earner for the country if it is supported.

“Roses are the ‘green gold’…where as coffee takes years to mature, roses take 45 days and are harvested throughout the year, giving greater returns than other products, including minerals.

“So, NAEB should start a campaign to interest investors to join the sector. Besides, many people think that one requires advanced skills to become a flower farmer,” he noted. 

He added that the private sector should be empowered to develop the sector, especially by providing them information and training the required personnel to run the industry.

Ngendabanga also called for policies that foster investment in the sector, which would increase production and reduce the cost of doing business.

 

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