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Kenyan flower exporters are betting on Valentine’s Day to drive up sales after revenues hit a record high in 2014.
“Valentine’s Day is the time when most exporters make about 30 percent of their annual sales and this year is no different,” KFC chief executive Jane Ngige said Wednesday while giving the industry’s outlook for 2016 ahead of the V-Day.
Available statistics from Kenya National Bureau of Statistics show that the flower industry earned the country Sh54.6billion in exports that year, a 27.5 per cent jump from Sh42.8billion earned in 2012.
This was after export volumes increased marginally to 136,601metric tonnes during the period, compared to 123,000 tonnes in 2012 and 121,000 a year earlier.
The Kenya Flower Council (KFC), the flower industry lobby group said that while 2014 performance was a decent year, going forward it is looking at expanding to newer markets of Korea, Japan, China and Middle East as well as the larger European markets like Norway and France which it consider huge consumers to rev up revenues.
“We are still waiting for the 2015 statistics to be released even though last year was hit by sluggish growth of euro against other hard currencies, we are however eying newer markets to boost our export revenues,” said Ms. Ngige.
She said her members and the entire industry will further look to diversify to other markets outside Europe and will also target the entry of Delta airlines to Kenya which is expected will offer direct flights to the US.
Kenya has largely concentrated on sales through the Amsterdam auction and EU markets – a foray into which it commands about 38 per cent market share.
The country is the lead exporter of rose cut flowers to the EU and approximately 50 per cent of exported flowers are sold through the Dutch Auctions, although direct sales have been growing – with over 25 per cent of exported flowers directly delivered to over 60 destinations across the globe.
Kenyan exporters also have advantage over other world flower producers due to the quality of flower stems exported outside the country – even as domestic flower business continues to gain momentum.
Ms. Ngige said the association is in the process of setting up system software which will see farmers track their produce from the seed to the export level in an effort aimed at streamlining the sector.
Meanwhile KFC has criticized government’s delay in the payout of VAT refunds – which was expected to have been done in the Q2 of last year, as one of the reason slowing the sector’s growth.
KFC also blamed adverse climate change and fluctuation of foreign currencies for the low production further predicting a tough year for flower growers.
“We expect 2016 will be tough year for the industry as we embrace the changes that come with devolution, the up-coming general elections and unpredictable weather” said Ms. Ngige.
Info you need to know
-Valentine’s Day is one of the biggest days in the calendar for the global flower industry, exporters bet on the day to make good returns from sales of bouquets
-This year’s V-Day comes up on Sunday and loved ones will be expression their affection through flower gifts, chocolates to commemorate the day
-Horticulture sector generates an average of US $ 1Billion yearly, in 2014 in contributed 2.8 percent to the GDP with 1.52 percent coming from the flower industry