Business Daily
Date: 13.02.2014
Page 19
Article size: 220 cm2
ColumnCM: 48.88
AVE: 92888.88
Nanyuki flower firm sells Sh430m stake to SA equity fund
BY CHARLES MWANIKI
South African private equity fund Agri­
Vie has bought a Sh430 million ($5 mil­
lion) stake in Kenyan flower firm Kariki
winter months, adding substantially the local horticulture products exported
to their costs.
to the EU attract higher export tariffs,
The investment into the Kenyan making them less competitive in the
flower firm comes in the wake of the lucrative market. The flower industry
release of earnings figures for the indus­ in Kenya has grown progressively from
try for 2013, which showed that that cut modest beginnings in the mid­1980s,
flower exports dropped by 13.9 per cent to emerge as one of the world's lead­
Group, giving the local flower industry a
boost amid news of reduced earnings in
2013 and the placing under receivership
of major producer, Karuturi.
from Sh65 billion in 2012 to Sh56 billion.
ing flower sources with at least a 38 per
The Nanyuki­based flower compa­
Weaker demand resulting from the Eu­ cent market share ofthe European cut
ny said it will use the cash injection to
ropean economic crisis has hurt flower flower market.
finance expansion into Japanese, Mid­
earnings from Europe.
The Kariki Group, founded in 2002
dle­Eastern and Australasian markets.
Additionally, a relatively strong shil­ by brothers Richard and Andrew Fern­
The company is also seeking to expand
ling performance versus the dollar last andes, operates flower farms in Nanyuki,
its product range.
year exerted pressure on industry earn­ Molo, Thika and Naivasha.
"We were attracted to making this
ings, by narrowing the gap between ex­
According to Richard Fernandes,
investment in Kariki by its reputation
they will look to tap the South African
penses and revenues. On Tuesday, the
as a high quality supplier, operational
firm's knowledge on regional business
facilities and because it is an efficient industry suffered a setback after one
of Kenya's main flower firms Karutu­ and the horticulture industry.
and well­managed business," said
Agri­vie has invested in several ag­
ri Ltd was placed under receivership
Dave Douglas, investment advisor at over debts owed to lenders including riculture firms in East and southern
Agri­Vie.
CfC Stanbic.
Africa, including South African vegeta­
Agri­Vie also cited Kenya's favour­
able climatic and geographic position
as a flower producer, with less energy
costs generally incurred by local flower
producers compared to their European
competitors due to all­year availability
The flower firm, which is associated ble processor Dew Crisp, Africa Juice of
with India's conglomerate Karuturi Glo­ Ethiopia and Ugandan timber produc­
bal, owed the bank and other debtors tion firm New Forest.
of sunshine.
to see whether new Economic Partner­
over Sh400 million.
Flower firms also face an anxious wait
alongside other horticulture producers
Growers in Europe have to utilise ship Agreements will be agreed with the
artificial lighting and heating to ex­ European Union.
tend their growing period during the
Failure to strike a new deal could see
Investment
¦ Agri­Vie says it was attracted to
Kariki because of its reputation as
a high quality supplier.
Ipsos Kenya ­ Acorn House,97 James Gichuru Road ­ Lavington ­ Nairobi ­ Kenya