Africa-based Food and agri-business private equity fund, Agri-Vie has made a $5 million investment into Kariki Group, a Kenyan flower exporting business.
The move will give Kariki leverage to expand its business and explore growth opportunities in European, Japanese, Middle-Eastern and Australasian markets.
Kariki Group is one of the fastest growing cut flower businesses in Kenya with operations in four different sites within the East African nation. It grows its flowers in these locations which has different altitudes in the highlands, allowing optimum growth of different varieties.
Kenya helps companies like Kariki growth with its near-stable climatic condition, which provides high percentage of sunlight hours a year, unlike in the Europe where they depend on the use of artificial lighting and heating to extend growing period, which adds to cost.
Brothers -Richard and Andrew Fernandes founded Kariki in 2002, at a time when the European floriculture sector became less cost competitive and began shrinking.
Compared to the 80s, Kenya is today one of the leading flower exporting nations in the world with a 38 percent market share in European nation.
According to Dave Douglas, Investment Advisor at Agri-Vie, “the horticultural industry in Kenya is a significant contributor to the national GDP.”
Douglas said the firm is investing in Kariki Group because of its reputation as a high quality supplier, its world class operational facilities, and because it is an efficient and well managed business.
“Additionally, there is much potential to widening the product range in order to satisfy market needs,” he added.
“The cut flower industry operates to highly sophisticated and effective standards. Within two days of cut flowers being harvested in Kenya, they are available to be sold to the consumer in Europe having been trimmed, packaged, and airfreighted overnight from Nairobi to Holland.
From there, approximately two thirds of the flowers are sold through the massive Dutch flower auction at Aalsmeer after which they are invariably re-shipped to the final destination in countries are diverse as Sweden, Russia, USA and Japan,” he explained.
Richard Fernandes, co-founder of the business believes Kariki’s environmental impact is positive with all Kariki’s operational sites holding both GlobalGap and KFC Silver accreditations.
According to him, flower waste in the packing process is composted and utilised to re-enrich the soil, while rain water is harvested and utilised to supplement irrigation needs. Each of Kariki’s 1200 employees also actively participate in improving efficiencies and quality standards.
