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.