Background

Afriflora Sher’s rose farm in Ethiopia is the largest in the world. The whole greenhouse
complex is spread across three locations and has a surface area of around 450 hectares. This is
equivalent to 900 football pitches.

Afriflora Sher’s largest farm is located near Lake Ziway, at 1650 metres above sea level and
approximately 3 hours’ drive from the capital Addis Ababa Besides the farm in Ziway, “Sher
roses” are also grown at 2 other locations, namely:

Koka farm (27 ha), which is located an hour’s drive to the north of Ziway, and a farm in the
village of Adami Tulu (190 ha), which is merely a stone’s throw from Ziway.

METHODS

Afriflora Sher has been focusing on the European retail market since 2005, primarily based on
long-term contracts. This means that 95% of roses that arrive at Afriflora Sher in Aalsmeer
are sold and delivered directly to customers.
PACKAGINGS
Afriflora Sher is able to offer all kinds of packagings: common auction casks, black buckets
or, for example, water boxes. Naturally, customers can choose carriers that best suit their
needs, such as auction trolleys, Danish containers and EUR pallets.

Customers can indicate specifications for their orders; for example:

 type of flower nutrition

 a price sticker
 various types of sleeves
 different number of stalks per bouquet
 colour combinations
 length of stalks
 required rose maturity

Bouquets are tailor-made based on customer-specific preferences, with as many activities

being carried out in Ethiopia as possible. This helps to save time and costs, and makes sure
customers receive the freshest possible flowers.

INNOVATION
Cost management and efficiency are very important factors in the horticulture sector.
Afriflora Sher’s sales team likes to share its ideas in order to optimise existing concepts and
develop new ones. Afriflora Sher wants to work with customers to offer a distinctive product
to the market.

Sher Ethiopia expansion plans to Increase Flower Production

The cut flower company will ultimately employ 6,000 people in

Adami Tulu
Sher Ethiopia Plc, which is implementing an expansion project in Adami Tulu, 170Km south of
Addis Abeba in the Oromia Regional State on a 203ha plot of land, has so far, completed
expansion ON 50 ha of the total plot. Only 160ha of land will be used for development of a new
greenhouse whereas the remaining land will be used for building offices, pack house, grading
hall, cold room and other facilities.
“So far, we are developing one hectare of land per week,” said Gerrit Barnhoorn, managing
director of Sher, refraining from mentioning any details in terms of the amount of investment
spent on the expansion project.
The minimum amount of investment per 10ha is in the floriculture sector is estimated to be 50
million Br, according to Berhanu Lodamo, Promotion & Information department head at
Ethiopian Horticulture Producer & Exporter Association.
This project is expected to increase the flower production and export level in Adami Tulu alone
from 400,000 stems per day to 1.5 million stems per day, raising the total from all three farms,
including Ziway and Koka, to 3.5 million stems per day.
Similarly, the number of employees in Adami Tulu is also expected to rise to 6,000 from 1,400.
Sher Ethiopia, headquartered in Ziway, Oromia, 163Km south of Addis Abeba, has now
increased its farm size to 703ha. The company entered the Ethiopian flower industry in 2005,
and it has become one of the largest companies exporting flowers. The company had previously
engaged in horticulture in Kenya for over 15 years.
The company mainly exports its flowers to Holland, from where they are distributed to the rest
of Europe, according to Gerrit.
The major challenge for the company now, is the fluctuation of the euro, whose exchange rate
has decreased, Gerrit told Fortune. The exchange rate of the Euro against the Birr has decreased
from 26Br in May 2014 to 23 Br now.
“This is affecting our income,” emphasised Gerrit.
During the 2013/14 fiscal year, the horticulture sector in general had gained 245 million dollars,
according to Ethiopian Horticulture Development Agency (EHDA).
Even though there is 0.42pc for 11 months of the current fiscal year, the rate of growth compared
to last year which was 6.4pc, had decreased, said Alem Woldegrima, director general of EHDA.
The agency has been assisting actors in the sector to diversify their market into more destinations
in addition to Europe such as Japan and African countries, stated Alem.
There are now around 120 foreign and local flower companies operating in Ethiopia. Out of the
120 investors, 73 invested through Foreign Direct Investment (FDI), while 11 are joint ventures
and 36 are local companies.
The grand inauguration of the expansion project is scheduled for November 21, 2015.
How pirofitable is the fiower Industry in Ethiopia?

From this revenue exchange, floriculture has contributed to 212.56 million, which is 80% of the
total foreign revenue earning. The industry has also created over 180 thousand employment
opportunity out of which 85% are women.

Ethiopia cut flower industry's success story

Ethiopia cut flower industry's success story(1)
by Market Insider
Friday, 03 Apr. 2015
The Ethiopian flower industry represents an extraordinarily fast and successful diversification
into a non-traditional export [Link] Ethiopian flower industry emerged in the late 1990s,
and despite being a late-comer, Ethiopia has become the second largest flower exporter in Africa
(after Kenya). Projections are for even further future growth. Exports are expected to reach $550
million by the end of 2016. 

Climate conditions have made Ethiopia a favourable cultivation site for such products as it is
situated in the tropics, with its diverse range of altitudes. Additionally, the Federal Government,
the Ethiopian Horticulture Producers and Exporters Association (EHPEA), and international
investment played key roles in Ethiopia's floriculture industry development.

Following recent ethnic violence and reduced labour force in Kenya, Africa's number one global
flower exporter, investors and producers needed to diversify and invest in other countries.

With good climate conditions and cheap transportation costs, Ethiopia was a favourable choice,
especially for the cultivation of roses.

State-owned land was made available for flower farms at affordable prices, especially near the
airport. This reduced transportation cost facilitated market entry.

The government also offered attractive incentives for investors. For example, a five-year
corporate tax exemption for inputs, import duties were scrapped and investors were also given
access to financing from banks. It became obvious that Ethiopia had a comparative advantage in
the production of roses, especially with vast amount of labour. As the industry expanded, the unit
cost of production decreased.

The sequence of entry of firms in the Ethiopian flower industry shows that domestic
entrepreneurs played a major role in the initial stages. With the exception of Golden Rose and
Ethio Dream, the first movers and early imitators were domestic owned firms. Foreign firms (in
the form of joint-venture or full ownership) started to enter mostly after 2003.

A significant number of the foreign firms came from other African countries, including Kenya
(for example Linsen, Abyssinia, Maranque, Karuturi, and Sher-Ethiopia), Uganda and
Zimbabwe.

The better investment climate in Ethiopia compared to these countries may have contributed to
the increasing shift of foreign investment to Ethiopia.

Through international investment, knowledge transfers and technological innovations can be

introduced into the domestic market; for example, through improved agricultural methods.
International investment is beneficial for the recipient country as it also promotes economic
activity, therefore increasing employment.

In the case of Ethiopia, the cut flower industry has experienced investment from a range of
geographical and industrial backgrounds, from the Netherlands, United Kingdom Israel, and
India, to more regional markets such as Nigeria, Sudan and Oman, thereby also encouraging
South-South integration.

Nevertheless, the biggest market for the Ethiopian rose is the Netherlands, as around 90% of rose
exports go to Holland. Evidently, Ethiopia has emerged as a strong global cut flower market
competitor.

The floriculture industry has had a huge impact on Ethiopia's economy and society; most
significantly on job creation, which is said to amount to over 100,000 new jobs in the last five
years. Locals are being trained in business and management skills and most donors are giving
back to society in one way or another.

The industry has also had a major influence on gender perspectives, as more than 75% of
workers are female. Through production diversification, Ethiopia can depend more on trade and
less on aid. Although floriculture is a fairly new industry in Ethiopia, sales records of flower
exports have shown how profitable diversification can be achieved through trade.
 Source: East African Business Week / Ethiopian Embassy in Kampala

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OUR VISION

Afriflora’s main objective is to grow and sell roses that have been sustainably cultivated. This
is done while respecting people and the environment. Sustainability, Fair Trade and Corporate
Social Responsibility have been important principles at Afriflora Sher for many years. As a
result, the company possesses various MPS certificates  in the Netherlands as well as Ethiopië.
Afriflora Sher and Sher Ethiopia have been Fair Trade certified  since 2012.
Featured Farm: Afriflora - Sher Farms
In 2004, Gerrit and Peter Barnhoorn were asked by the Ethiopian government to set up a farm in
Ethiopia similar to their successful socially responsible flower farm in Kenya. Afriflora believed
in this philosophy long before social trends such as Fairtrade, sustainability and Corporate Social
Responsibility (CSR) gained prominence.
Ziway is located 160 km to the south of the capital Addis Ababa, at the edge of Lake Ziway.
Ziway has developed into a hub for the production of flowers, vegetables and wine. The city is
growing rapidly thanks companies like Sher Ethiopia.
Construction on Sher Ethiopia PLC commenced in June 2005. Slightly over a year later, on 1
July 2006, the project was officially opened by the Ethiopian Minister of Trade and Industry Ato
Girma Birru. By then, the first greenhouses were already in full operation.
From the very outset, the project contractors were building greenhouses at a rate of 1.5 hectares
per week. The greenhouses are built in blocks of 9 hectares, with a width of 100 m and a length
of 900 m. In the front of the greenhouse blocks is a processing area that goes across the full
width. The area offers all the required facilities for manufacturing, such as cold storage, a
packing area, offices and employee facilities, including a canteen. Nowadays, the entire project
has a total of about 450 hectares of greenhouses. Approximately 150 ha are rented to other
growers and Sher Ethiopia PLC retains the use of approximately 300 ha for their flower
production.
The existing greenhouses currently employ approximately 10,000 people. Once remaining sites
are completed, there will be work for about 15,000 employees. 
Afriflora’s commitment to sustainable farming and social responsibility has been a key driver to
the success of the Sher farms. Along with investments in flower production, we have also been
able to make the investments needed to improve the living standards of the people of the Ziway
region through education and healthcare.
One of the first projects was to set up the “Sher Ethiopia School”. The school is open to all
people in the area, both employees and non-employees. Along with the school we set up
childcare and created the nursery and primary schools. Currently, there are over 4,000 children
attending school. We feel our best investments are made in our people and to provide education
in reading, writing and calculation skills. We also provide advanced classes teaching computer
skills. In the near future, our plans include the establishment of secondary schools, advanced
technical education and vocational training.
Our educational efforts are ongoing and aim to stay ahead of the needs of the people in Ziway.
To promote reading amongst both the children and the adults, Sher Ethiopia has provided a
library and filled it books and other assets. We are extremely proud of our educational facilities
and libraries and will continue to invest in and promote all levels of education and training.
Afriflora’s commitment to sustainable farming and social responsibility has been a key driver to
the success of the Sher farms. Along with investments in flower production, we have also been
able to make the investments needed to improve the living standards of the people of the Ziway
region through education and healthcare.
One of the first projects was to set up the “Sher Ethiopia School”. The school is open to all
people in the area, both employees and non-employees. Along with the school we set up
childcare and created the nursery and primary schools. Currently, there are over 4,000 children
attending school. We feel our best investments are made in our people and to provide education
in reading, writing and calculation skills. We also provide advanced classes teaching computer
skills. In the near future, our plans include the establishment of secondary schools, advanced
technical education and vocational training.
Our educational efforts are ongoing and aim to stay ahead of the needs of the people in Ziway.
To promote reading amongst both the children and the adults, Sher Ethiopia has provided a
library and filled it books and other assets. We are extremely proud of our educational facilities
and libraries and will continue to invest in and promote all levels of education and training.
Water management
Sher Ethiopia is very conscious about the use of water. During the cultivation of our flowers, we
employ a water-saving spray and irrigation system. We also gather and store rainwater in
collection systems for use during cultivation. Through these techniques, we are able to keep the
impact on our environment to a minimum and to handle the consumption of water in a
sustainable way. In addition, waste and rinsing water from our machines is collected in special
tanks and treated in order to reduce the impact on the environment. We are continually working
to optimize our water management processes by involving both internal and external experts.
Waste management
Organic waste is collected, gathered and then processed into compost by a third-party company
before being reused in our processes so that it can becomes beneficial again to both humans and
animals. Our old paper is collected and processed separately.
Certifications
Sher Ethiopia cultivates, produces and sells sustainably grown roses according to Fairtrade
principles. This allows Afriflora to contribute actively to a better quality of life. Afriflora roses
meet the criteria of Fair Flowers Fair Plant (FFP) and internationally recognised standards such
as MPS-A, MPS-SQ, ETI and GAP. They are a guarantee of environmentally-friendly
cultivation and good working conditions. And Afriflora goes further than simply obtaining
certifications. The long-term improvement of living conditions and offering good working
conditions are clear core values at Afriflora.
There is a great deal to be done over the next few years to further expand the Sher Ethiopia
project and to ensure that everything runs the way it was envisioned a number of years ago. We
believe our companies run smoothly and are able to make a profit when they are connected to
social developments such as increased employment, education, medical care and income for the
local population.
 
Thanks to Peter Barnhoorn, Director of Afriflora, for sharing the story of the Sher project. Check
out more information about Afriflora at [Link]. Or even better, come visit the farm for
yourself. It is truly a unique and wonderful place to see.