Panalpina, an international freight forwarding and logistics company will acquire Air Connection; a Kenya-based forwarder specialized in the export of flowers and vegetables. Both Companies are Associate Members of Kenya Flower Council.
This development comes after Panalpina’s acquisition of Airflo in Kenya in 2016 and only two weeks after the company formally announced the launch of its global Perishables Network.
Panalpina will acquire the family-owned Kenyan company Air Connection, subject to conditions.
“The acquisition of Air Connection will strengthen our existing global Perishables Network and our position as the clear market leader in the perishables arena in Kenya,” says Stefan Karlen, Panalpina’s CEO.
Air Connection is specialized in the export of flowers and vegetables from Kenya to multiple destinations including the Netherlands and the UK, and is currently the country’s fourth largest forwarder in terms of air freight export volumes. The merged company will handle around 70,000 tons of perishables air freight per year. The activities of Panalpina and Air Connection in Kenya complement each other.
“While most of Panalpina’s flower exports from Kenya currently go to auctions in Amsterdam, we are specialized in direct shipments to customers,” says Manjit Brar, owner and managing director of Air Connection.
“And while Panalpina is strong with big charter shipments from Kenya to Europe, our strength lies in smaller shipments on scheduled passenger flights to over 150 destinations worldwide, He added.
“Increasingly, buyers of perishables want to source directly from the producer and producers want to sell directly to the country of consumption. Direct shipping bypasses intermediaries, reducing touch points in the supply chain. It removes unnecessary costs, potential delays and most importantly allows a fresher product to be offered to the consumer. At the same time, this development will make sophisticated end-to-end solutions even more important than today. Joining forces with Air Connection will offer additional opportunities to grow the perishables business in Kenya, especially with the export of vegetables, herbs and cuttings.” explains Conrad Archer, managing director of Panalpina Airflo.
The merged company will employ over 350 staff in Nairobi and offer 3,000 m2 of cold storage capacity, which is soon to be extended even further to 4,000 m2. It will also run an office at the port of Mombasa where Panalpina plans to develop the ocean freight business for both perishables (using reefers) and dry cargo. The dry cargo activities involve the import of textiles and export of fashion products, mainly to the USA.
Manjit Brar, who founded Air Connection in 1993, will remain as a consultant. The acquisition is subject to approvals by the relevant competition authorities.
The GSP REX system of the EU, Norway and Switzerland is already in force. The REX System is an Electronic System based in the EU that the local competent authorities register exporters on. Upon registration the exporters no longer fill in a paper GSP certificate to the EU, Norway and Switzerland. Instead of the paper certificates, the registered exporters will make statements of origin in prescribed form on commercial documents. By end of this year (2017), all exports requiring GSP to Norway and Switzerland should be done using this platform.
Kenya elected to implement in 2017. KRA being the competent authority for issuance of all preferential proofs of origin in Kenya is in the process of rolling out the project. Training of its officers is already in progress.
Consequently KRA has proposed to hold sensitization/training workshops as follows:
- Mombasa preferably before the end of April 2017
- Nairobi beginning of May 2017
Kenya Flower Council will work with KRA to have further regional trainings in Naivasha/ Nakuru area and Meru/Nanyuki area where there is concentration of producers. Deliberations to firm up the dates are ongoing.
Kenya will this year participate in the International Floriculture Expo (IFE) scheduled to take place from 13th to 15th June 2017 at McCormick Place, Chicago. The Kenyan Stand will be sponsored by East Africa Tradehub – COMPETE. They have already secured a 20’x30’ booth No. 834. Exhibitors will only pay for their travel costs and Accommodation.
IFE is an annual event where the floral industry gathers to discover new products, source new suppliers, network, and learn. IFE 2017 will be co-located with United Fresh & Global Cold Chain Expo in Chicago. IFE is North America’s largest business-to-business trade show for the floral industry, uniting mass market retail buyers, florists, suppliers, media, and other industry professionals. In 2016, over 5,500 floral and produce professionals walked the show floor including companies like 1800Flowers, Ahold, Albertson’s, FTD, Meijer, Publix, Target, and Wegmans.
The Kenya Consulate in Dubai is planning to host a Trade, Tourism and Investment Mission in Dubai from 24th – 26th May 2017 to be held at La Meridian Hotel. The mission themed ‘scaling new heights’ will entail distinct but interrelated sessions that includes a workshop on doing business in Kenya/UAE, b2b meetings, site visits as well as an exhibition for the first 2 days while the last day will be dedicated to the participation of the Kenyan diaspora resident in Dubai.
This will provide an opportunity to explore possibilities of flower export to UAE. The Embassy will provide a free stand for Kenya Flower Council. The Embassy is working with Value Connect Company for registration of participants.
The full conference cost package is $1795 for Early bird registration done before April 10, 2017, and thereafter it will be $1950. These include:
iii) Business site visit
Please note participants will pay for their air tickets. We are requesting those who would want to participate in this mission to confirm with us via firstname.lastname@example.org
The Kenya Flower Council (KFC) celebrated this year’s Valentine’s Day with Nairobi Women’s Hospital, Adams Arcade Branch, where patients and visitors were presented with flowers. They all could not hide their joy as they warmly received the beautiful flowers graciously donated by Red Lands Roses.
All the Nairobi Women Hospital branches shared the love with flowers. We Thank Red Lands Roses for supporting this initiative.
Mrs. Eunice Munyingi, the Hospital Manager thanked Kenya Flower Council for the gesture. “We are grateful for sharing the love with us and most especially with our patients. You have given them a reason to smile today.” She said.
As the saying goes, just living is not enough... one must have sunshine, freedom, and a little flower. Flowers always make people better, happier, and more helpful; they are sunshine, food and medicine for the soul.
The Kenya Flower Council, fully sponsored by Messe Frankfurt Exhibition GmbH and Trade and Fairs Consulting GmbH, participated in the first edition of Floradecora that took place in Messe Frankfurt Germany from 27 to 30th January 2017. This is a new trade fair for fresh flowers and ornamental which attracted over 60 exhibitors. (more…)
“Rose Safari” is a new concept initiated by Flower Optimal Connection where the best premium rose varieties from carefully selected top farms in Kenya are uniquely packaged and delivered fresh to florists across Europe. During the forthcoming premier edition of Floradecora trade fair in Frankfurt Germany, Flower Optimal will be showcasing the new concept and at the same time offering visiting florists the premium roses that are of the same top quality as South American varieties but at even better prices.
Rose Safari concept is testament that there are many premium roses grown in Kenya that have the same top quality characteristics as roses grown in other regions such as Ecuador and Colombia.
With Rose Safari we Finally have a concept that proudly promotes premium roses from Africa to florists. (Contrary to most roses from Africa which are sold and marketed though Holland as Dutch and mostly positioned as having lower quality).
Spot the ‘difference’ and WIN At Floradecora, florists will have a chance to figure out from the premium roses showcased at the Flower Optimal stand which are African grown and which are from other regions. This exercise seeks to affirm that the Rose Safari selection is of the same quality and size as South American premium varieties. Visitors who participate in the exercise stand a chance to win a Free Trial box of Rose Safari Roses.
Fresh Delivery Flower Optimal works closely with the existing supplier chains of wholesalers and exporters in delivering the Rose Safari box of selected fresh premium roses to the florist. Via the supply chain, the florist gets the special compact box directly from the grower, with the premium assortment and segment that the florists chooses. The florist can place an order according to their desired segment that puts into consideration stem-length, headsize, color and also choose from the carefully selected premium varieties in the Rose Safari Assortment. The roses are always fresh and untouched after the flowers are packed at the farm. Better Prices Rose Safari delivers a premium assortment at a +/- 15/20 % discount when compared to the same quality and size roses coming from South America.
Visit WWW.ROSESAFARI.COM For more information about the ROSE SAFARI PREMIUM ROSE SELECTION
The first Flower Logistic Africa 2016 took place on November 8-9, 2016 at the Radisson Blu Hotel in Nairobi, Kenya. The event organized by Logistics Update Africa in collaboration with the Kenya Flower Council as the official partner brought together key stakeholders of Africa's flower power to discuss and learn the best practices of sustainable cut flower supply chain.
The conference themed from farm to vase: Building sustainable cut flower supply chain is one of the first conferences in Africa that put the focus on the evolving floral value chain.
The forum through panel discussions identified the logistical challenges faced not only by the growers; but by the all the value chain players at large, for example policies and regulation, insurance, investment, the safety and the quality of the cargo and cost of doing business. The exiting program addressed competitiveness about the current market and the opportunities for the future of the flower industry. (more…)
This year the Kenya Flower Council once again mounted a Kenyan Pavilion during the International Flower Trade Fair (IFTF) held in Expo Harlemmermeer in Vijfhuizen, The Netherlands. Kenya showcased her strengths as the leading country in the production and export of quality flowers to the EU at the Kenya pavilion (C3.20). This is in the spirit to brand the Kenyan flower and also sell Kenya as a country.
The 64 metre squared booth was sponsored by the USAID through the KAVES (Kenya Agricultural Value Chain Enterprises) program, Horticulture Crop Directorate, Kenya Flower Council, Zena Roses, Red Lands Roses, Harvest Ltd and Kariki
The growers showcased the best of Kenya by displaying their top quality flowers attracting hundreds of visitors to the pavilion. The expo organized by HPP Exhibitions, is one of the biggest international flower shows bringing together major international players in the flower industry from across the globe. (more…)
The Kenya Flower Council attended the 2nd panel meeting for the preparation of the Kenya export development program (KEMDP) for year 2017 on Monday 31st October 2017. The meeting took place at the Export Promotion Council offices in Nairobi.
The KEMDP is a tool for harmonizing Kenya export market development activities with a view to avoid duplication of efforts by various trade support institutions and provides a guide to both trade support institutions and exporters on the prioritized and targeted market exports for Kenya. (more…)
The Kenya Flower Council attended the Nairobi County Governors Round Table on 1st November 2016 in Nairobi. The meeting was organized by the Kenya Private Sector Alliance (KEPSA) where the Kenya Flower Council is a member. The focus of the round table was competitiveness and ease of doing business in Nairobi County.
Dr Evans Kidero, Governor-Nairobi County Government highlighted efforts being made by his Government in creating a conducive business environment and facilitating businesses. He said his government had launched a Unified Business Permit which incorporates all licenses including the single business license, health and fire into one.. It is an online platform which will reduce time taken to obtain the myriad licenses and tame corruption. He also noted the improved security that business people are experiencing lately and promised to keep up the momentum.
On horticulture, the County Trade Minister Hon Anna Othoro said that plans were at an advanced stage for opening the market at outer ring-Kangudo junction which will be equipped with cold chain systems targeted at flowers fresh fruits and vegetables. She said that the market will set aside considerable space for horticulture and will be convenient given its proximity to the Jomo Kenyatta International Airport. She went on to say that the City Market will be rehabilitated and formal space/slots given to flower vendors who are currently using corridors in the area to conduct their trade. On the issue of flower kiosks Ms Othoro requested the Council to inform the vendors to conduct a fresh identification of the sites they would like to set up shop since the last ones had been overtaken by time and events. She promised to approve the slots once the vendors association provides her with the identified sites.
The Kenya Flower Council attended the horticulture research fund meeting at the Horticulture Crop Directorate (HCD) headquarters in Nairobi on 1st November 2016. The meeting wac convenvened by HCD with the aim of prioritizing issues that will be supported by the KES 2 million available in HCD and identify potential funders for the research fund .
Presenters emphasized the need for continued market access through elimination of quarantine pests, upholding quality standards and tackling non-tariff barriers to trade. The false codling moth was cited as the most potent threat to the flower industry in Kenya. Other pests of economic significance and which merit attention are the African fruit fly, milly bugs, thrips, papaya ringspot virus and tuta absoluta.
The next meeting will be held mid-January 2017.
The Kenya Flower Council attended the wildlife regulations meeting at the Bomas of Kenya in Nairobi on 4th November 2016. The Council actively participates in environmental and natural resources initiatives as they have a direct impact in the business prosperity of its members. The meeting discussed various items in the regulations including compensations, incentives for conservancies; carbon sinks financing and protected areas.
The Kenya Flower Council attended the Kenya-Botswana Investment Forum on 7/11/16 in Nairobi. The Forum was organized by the Kenya Chamber of Commerce and Industry, where KFC is a member and the Botswana Chamber of Commerce and Industry. (more…)
The Kenya Flower Council participated in a baseline survey on better business practices for children project on 8th November 2016 at KEPSA offices. The Council has already embedded these practices in its code of practice and its members are implementing the recommendations of the project. Organizers of the survey endorsed the Council’s practices on the subject and promised to replicate to other industries and business enterprises. (more…)
The Kenya Flower Council attended a meeting on the development of a national strategy for horticulture at the Ministry of Agriculture headquarters on 9/11/16. The strategy will aid in the implementation of the national horticulture policy. (more…)
The World Flower Council (WFC) held their International Summit from 1st to 4th September 2016 at the Norfolk Hotel Nairobi, Kenya. The event was organized in collaboration with the Kenya Flower Council themed Kenya: Fascinating Flowers, Fauna and Friends. This was the first time the summit was held in African soil. (more…)
The Kenya National Chamber of Commerce and Industry held a Flower Industry sensitization workshop on the automation of the issuance of Certificates of Origin (CoO) at a Naivasha Hotel. The Participants were taken through how the system will work where they got a chance to give their feedback on the same. The online web portal will enable stakeholders to readily access relevant trade information and also apply for certificates of Origin. This development will help increase efficiency through integrating the portal to the Kenya National Single Window to speed up trade flow.
KNCCI was handed back the mandate to issuing the Certificate of Origin in July 2014, a function temporarily handled by the Kenya Bureau of Standards. They signed an agreement with Trademark East Africa (TMEA) on automating the issuance of the CoO in 2014. In the Manual process, Exporters were forced to pick the CoO forms from Chamber offices, go fill them and attach all the required documents, and take them back for endorsement and signature a process that is cumbersome, time consuming and expensive.
Please see below link for testing on how the system will be working and the other one to be used once it has been launched.
The Kenya Flower Council is celebrating 20 years since inception. The climax of this important landmark will take place during IFTEX 2016. The function gives KFC a unique opportunity to appreciate the Association, its esteemed members, partners, friends and the numerous milestones achieved over the past 20 years.
Over the two decades, KFC has grown in stature providing exemplary services in industry representation, promotions and market access pegged onto an internationally accredited quality assurance scheme. Moreover, the IFTEX show is going to take place for the 5th time in Kenya. According to the organizers the International Flower Trade Exhibition has grown into one of the most important cut flower trade events in the world. Exhibit space has doubled since the first edition back in 2012 and will again increase this year with 20% compared to last year, mainly as a result of more exhibiting Kenyan flower growers. The organizers have launched a strong international campaign to especially attract new flower buyers to attend the show in June.
“As part of our visitor promotion efforts we are trying to get a delegation of US flower buyers to visit Kenya in June, so we continue promoting African flowers into the US market”, said Dick van Raamsdonk in Los Angeles last week during World Floral Expo.
The Kenya Plant Health Inspectorate Service (KEPHIS) has clarified that bacterial wilt caused by Ralstonia solanacearum, (race 1) has not been found in roses in Kenya. This follows erroneous reports that appeared in the media recently in regard to the presence of bacterial wilt disease in Roses. According to Kephis, Bacterial wilt (Ralstonia solanacearum) is a disease common in plants of the solaneceae family like potatoes, tomatoes, egg plants, chilies and solanaceous weeds. This disease is classified into 5 races based on different host ranges and biochemical reactions. Race 1 is known to affect solanaceae family, Race 2 is known to affect banana while race 3 is known to affect potato. Race 1 has not been known to attack roses until recently reported in one of Kenya’s trading partner’s glass houses growing roses towards the end of last year. That country immediately put in place phytosanitary measures as per the International Plant Protection Convention’s provisions. Kenya, being one of its major trading partners, sought to find out the status of the disease in Kenyan roses. In collaboration with the trading partner’s National Plant Protection Organization, KEPHIS carried out surveillance for the disease in rose production facilities within the country (Kenya) and took plant and water samples for analysis for the pathogen. Samples tested in Kenya and the International laboratories were negative for Ralstonia solanacearum Race 1.
The Flower Industry has been working closely with KEPHIS to come up with strategies to ensure that the disease is not introduced into Kenya. Some of the strategies that have been initiated as precautionary measures are formation of a technical working group to guide in surveillance to further assure that the disease is not present in Kenya and review of our import requirements in regard to the disease. The industry has also been continually advised to embrace good sanitation protocols. KEPHIS has assured all stakeholders, that bacterial wilt in roses has not been reported in Kenya.
Dow AgroSciences an Associate Member of Kenya Flower Council, launched in Kenya Closer™ 240SC insecticide, containing the active ingredient, IsoclastTM Active. IsoclastTM won the Agrow Award for the best new crop protection product in 2014, as well as an R&D top 100 award for both the Closer™ 240SC and TransformTM 500WDG formulations.
In her speech during the event, KFC Chief Executive Mrs. Jane Ngige said the launch of CLOSER came at an opportune moment for the Industry. She added that it’s gratifying that the new quality product can be integrated with IPM which is imperative in meeting the ever stringent market requirements on safety and environment protection and sustainability, amongst others.
She said the inauguration of CLOSER is an indication of how innovation has outgrown in the bid to satisfy the needs for the farmer.
Dow AgroSciences is one of the world’s largest producers of crop protection products and has in recent years been successful with the development of new, sustainable crop protection solutions. Closer™ 240SC is a unique systemic insecticide (IRAC group 4C) from the newly designated sulfoxamine class of insecticides. It is the only active ingredient in this class. The launch of yet another new insecticide into the Kenyan flower industry confirms Dow AgroSciences commitment to expand their engagement in East Africa.
Closer™ 240SC launch, heralds a new era in combating and managing stubborn difficult to control pests most of which are notifiable pests with potential double loss to farmers from yield and market access perspective. The key pests are mealybugs, whiteflies and whiteflies. Closer™ 240SC is safe and compatible with, most beneficial insects used to control and manage pests in the sector.
The Kenya Flower Council (KFC) celebrated this year’s Valentine’s Day with Nairobi Women’s Hospital, Adams, where all the patients were presented with a bouquet of flowers. As it has been the norm in previous years, the newsrooms of different media houses were also given a treat of bouquets of red roses. They all could not hide their joy. As the saying goes, Flowers always make people better, happier, and more helpful; they are sunshine, food and medicine for the soul. The flowers were graciously donated by the KFC members namely Red Lands Roses, Waridi Ltd and Valentine Growers. Mrs. Eunice Munyingi, the Hospital Manager thanked KFC for the kind gesture adding that it brought warm smiles to the patients along with their loved ones.
Mid last week, KFC supported by Magana Flowers also appreciated reporters who attended an industry press briefing at Intercontinental Hotel with bouquets of red roses. KFC CEO Mrs. Jane Ngige said the industry is looking forward to an improved business environment for the floriculture industry in Kenya translating into industry growth, especially expanded current and emerging markets.
This year the Valentine’s Day is special as Kenya Flower Council is celebrating 20 years since inception. The celebration gives the Council a unique opportunity to appreciate the Association, its esteemed members, partners, friends and the numerous milestones achieved over the past 20 years. Over the two decades, KFC has grown in stature providing exemplary services in industry representation, promotions and market access pegged onto an internationally accredited quality assurance scheme.
Nairobi February 10, 2016. It’s yet another year of doing business and for the flower industry this is our supreme season, the Valentine’s Day. This is the time when most exporters make about 30% of their annual sales. Kenya is leading in the export of flowers globally. It is believed that for every 10 stems sold in Europe three stems are from Kenya. Indeed, the flower industry has made significant strides in enhancing sustainable markets. Kenya continues to diversify to other markets outside Europe. The diversification of marketing models from Auctions to direct market has grown extensively targeting over 60 destinations. New markets like Japan, US, Asia are growing fast. The industry is looking to the entry of Delta airlines to Kenya which will offer a direct freight to the US. On the other hand, the Russian market demand and returns have declined due to the crisis being experienced in Russian Federation affecting the markets globally. This year the Valentine’s Day is special as Kenya Flower Council is celebrating 20 years since inception. The celebration gives us a unique opportunity to appreciate the Association, its esteemed members, partners, friends and the numerous milestones achieved over the past 20 years. Over the two decades, KFC has grown in stature providing exemplary services in industry representation, promotions and market access pegged onto an internationally accredited quality assurance scheme. To mark this important milestone, KFC will amplify on our activities especially during Valentine’s Day, Mother’s Day, Secretary’s Day, IFTEX show amongst others throughout 2016. Moreover, the revitalization of the Kenya Horticultural Council (KHC) could not have come a better time than now augmenting the horticulture sector cohesion. This will be a vehicle to strengthen the horticulture industry voice and enhanced market access. The Kenyan flower has gained reputation as a high quality product. Growers are endowed with knowledge and experience in growing as well as expertise of marketing. We are happy to inform you that growers continue to proactively strive for responsible and safe production of cut flowers in, while protecting the natural environment and promoting the welfare of all farm staff. I am glad to note that the number of dynamic small scale holders in Kenya has grown immensely in the past few years majoring in varieties of summer flowers which are labor intensive. Looking at the industry performance; after a period of rapid growth between 2000 and 2010, when the flower exports rose from 40 to 120,000 tonnes, equivalent to an annualized growth of almost 12%, exports fell back to a growth of less than 2% in the following years. It is only in 2014 that we began to see momentum returning. Official statistics indicate that the flower industry earned the Country Kshs 54.6 billion in 2014; with exports volumes totaling 136, 601 metric tonnes. We are still waiting for the 2015 statistics to be released. Though there are no statistics, the domestic flower business is doing extremely well as the campaign to promote a local culture for flowers continues to be amplified leading to a rise in local consumption of flowers. More flower shops have opened up in different parts of the country and most particularly in Nairobi. This remarkable move has created more employment, beautified and branded Nairobi as the capital of a flower growing country, and more so a landmark for the industry at large. We are happy to recognize the County Government of Nairobi for all their efforts to promote the local florists especially during the Valentine’s Days celebrations. More and more flowers are going into local markets through Flower vendors, retailers and supermarkets chains. Currently, the County Government of Nairobi permits only the Members of Flower Vendors Association to sell from the streets of Nairobi. The Kenya Flower Council will endeavor to work with other county governments to enhance and intensify the campaign in other major towns. To expand on this, the Kenya Flower Council is urging all the employers in Kenya to embrace Secretary’s Day, officially launched last year in the month of April. This is by way of appreciating their secretaries and personal assistants a step that can play a great deal in improving their morale. Moreover, all the good treads has not been achieved without challenges for example accumulation and delay in paying VAT refunds and fluctuation of foreign currencies. The climate change with the rains being experienced more frequently has led to low production and also more attention to pests and diseases. The entry of County Governments has been exemplified by multiplicity and duplication of taxies and levies, making it more expensive to do business and even discouraging to new investors. The KFC continues to relentlessly engage with governments at both County and State level to pursue ways and means of easing the burden of doing business for a hard working fraternity of breeders, propagators, growers, consolidators along with their partners in products and service providers. Going forward 2016 will be a tough year for the industry as we embrace the changes that came with devolution, the up-coming general elections and unpredictable weather. We look forward to an improved business environment for the floriculture industry in Kenya which translates into industry growth, especially expanded current and emerging markets. END
The China National Chemical Corporation (ChemChina) has offered to acquire Syngenta by the end of the year. According to Syngenta this development is subject to shareholder acceptance and regulatory approvals.
ChemChina has offered to give US$ 465 per ordinary share plus a special dividend of CHF 5 to be paid conditional upon and prior to closing. The offer is equivalent to a Swiss franc value of CHF 480 per share1. Syngenta shareholders will in addition receive the proposed ordinary dividend of CHF 11 in May 2016. It is planned to make a facility available for the conversion of US dollar sales proceeds into Swiss francs on closing.
The Board of Directors of Syngenta has considered that the proposed transaction respects the interests of all stakeholders and has unanimously recommended the offer to shareholders. The transaction will enable Syngenta to continue to be the leading provider of technology for growers across seeds, traits and crop protection products. Syngenta will retain its name, its management, its broad portfolio and geographic presence. Syngenta will also remain headquartered in Switzerland. This combination is expected to create and still be business as usual for thier customers, business partners, employees, shareholders and the communities they serve.
Syngenta is a leading agriculture company helping to improve global food security by enabling millions of farmers to make better use of available resources. They operate in over 90 countries including Kenya. Syngenta East Africa Ltd is an Associate Member of Kenya Flower Council have been serving the flower industry.
ChemChina, which is headquartered in Beijing, China, possesses production, R&D and marketing systems in 150 countries and regions. It is the largest chemical corporation in China, and occupies the 265th position among the Fortune 500. The company’s main businesses include materials science, life science, high-end manufacturing and basic chemicals, among others. Previously, ChemChina has successfully acquired 9 leading industrial companies in France, United Kingdom, Israel, Italy and Germany, amongst others
The Kenya Flower Council Chairman Mr. Richard Fox has been re-elected for another term as the Trade representative at the Floriculture Sustainability Initiative (FSI) Board. This was announced at the FSI General Assembly held on January 28, 2016 at Essen, Germany. Mr. Fox is also the Vice-President and Chairman of World Trade Committee of the Union Fleur where KFC is a Member. On the other hand, Lara Ladipo of Partner Africa was also elected as the representative of the Civil Society Organizations. FSI is an initiative desired, created and maintained by the floriculture sector and its stakeholders with an aim of ensuring 90% of the internationally traded flowers and plants by FSI members will be sustainably produced by 2020. FSI aims to reduce the fragmentation of the multitude of projects and standards aligning investments and actions of the private and public sector by managing and prioritizing the sustainability risks on sector level. The initiative was officially launched in January 2013. FSI has developed a portal with the ITC StandardsMap which allows an online overview and comparison of standards. The FSI basket of standards identifies the main standards used for good sustainability practices in the floriculture sector. To ensure a neutral and objective comparison, those standards are benchmarked against the Global Social Compliance Program (GSCP) social-economic and environmental requirements. KFC’s Flowers and Ornamentals Sustainability Standard; Version December 2015 has been benchmarked with GSCP. During the meeting, FSI welcomed the efforts of Standards to carry out the benchmarking and based on the positive results the ‘2015 FSI basket of responsible sources’ was presented to the members. With the Standards that are in the Basket, FSI members will measure the volumes originating from responsible sources. The FSI members and sector outcomes, presented in percentages for both flowers and plants, will be presented during the Kenyan IFTEX Flower Show in June 2016. In the last two years FSI members pro-actively worked together to prioritize and focus on current and future sustainability issues in the floriculture supply chain through different projects. In Kenya, we have the building capacity for smallholder farmers to access international markets project ran by KFC. A baseline survey to gain knowledge of smallholders’ production systems in Kenya and their challenges to grow flowers for export was conducted last year and based on the findings; KFC conducted trainings and organized meetings with international buyers to provide insights to the smallholders on the mechanisms of global trade and to increase their links to the international market. Already, the KFC QMS and Smallholder code of practice have been reviewed and updated to achieve group certification for the small holders. A new round of projects will commence in 2016 with a focus to improve practices on Workers Conditions, Agrochemical use, Climate and Smallholders.
In efforts to reduce the cost of doing business in the country and enhance service delivery, the National Treasury held a conference in Naivasha. The conference was held under the aegis of the Intergovernmental Budget and Economic Council (IBEC). Kenya Flower Council attended the seminar and participated in the drafting of the final report.
The agenda of the conference was the development of a national policy to aid counties enhance the collection of own revenue and to cut on dependency on national allocation through maximization in and alignment of the seven pillars, to avoid revenue wastage at collection and to expand the tax base. The pillars are:
• Single Business permit/Multiplicity of Taxes • Other taxes, fees and Charges Collected by Counties • Property Taxation • Drafting National and County Policy and Legislation • Citizen Engagement and Public Participation • ICT Applications for Revenue Collection • Revenue Administration and HR Systems
Summary of the recommendations to thematic Pillars
Taxes & Levies As already provided for in the Public Finance Management Act (PFMA) that the National Treasury should be responsible for the review and analysis of county tax proposals. The PFMA read together with articles 209 and 210 of the Constitution provides that the Cabinet Secretary for Finance should review and be consulted on county tax proposals. However, it is not yet clear what happens if he rejects the proposal as it may prejudice the economic unity of Kenya.
The suggested framework legislation should provide a legal instrument which regulates the county tax assignment process in a transparent manner where neither a county nor the National Treasury can delay the county tax introduction.
Legal review of all enabling or principal legislation for the imposition of cess, business license fees etc should commence with the view to aligning them with the current requirements of the Constitution and the PFMA. To advance this process at an accelerated pace would require increasing resources of the Law Reform Commission to complete this process as a matter of high importance.
Single Business Permits
- Strengthening the legal basis of SBP. Implement a uniform law across all counties for similar taxes / charges such as SBP
- Delink regulation from revenue raising and focus licenses on regulation and maximize revenue by applying appropriate revenue instruments.
- Understand burden of business contribution to county revenues -capture totality of the burden of taxes, fees and charges on the business community before setting actual rates/taxes.
- Align SBP approaches and practices across the counties by establishing nationwide standards and criteria for SBP administration and management (Identify the institution to champion this effort).
- Link SBP revenues to service delivery.
- Reconsolidation of all licensing charges into SBP.
- Justify SBP fee increases e.g. –need for indexation for inflation.
- Ensure effective public participation with regard to preparation and enactment of finance bills –share draft bills with the business community for input prior to presentation to the County Assembly and conduct civil education prior to public consultation. This will improve the quality of public participations.
- Implement harmonized public participation legislation across all counties.
- Harmonize management of vehicle branding fees –Fees charged at primary location of business should be recognized across all counties in order to mitigate against multiple payments.
- Utilize forum on Intergovernmental Relations to champion Ease of Doing Business agenda at County level.
- Counties and the business community to hold fora where issues raised are forwarded to the COG for consideration and to address rates/fee inconsistencies.
- Consider introduction of municipal infrastructure grants to cater for high infrastructural costs in urban area.
Property Rates are mandated by the Constitution as a revenue source for County Governments. Poor Administration of property taxation has made it a weak source of revenue for the counties, as compared to international benchmarks. Counties were encouraged to expand their tax base to increase their revenues instead of relying on business licenses and cess for their growing budgets. To enhance county revenue collection from property rates, counties were encouraged to update their property registration rolls and valuation.
Also, to partner with the KRA for collection and enforcement of property taxes and other county revenues.
Drafting National and County Policy and Legislation
- The national government should consider adopting national framework legislation for adhering to a process which have to be followed by counties for purposes of introducing new taxes and levies with the view to aligning it with the economic unity principles as enshrined in the Constitution of 2010 (art 209(5)).
- The national framework legislation adopted should stipulate the procedure of putting county tax and levy proposals on a so-called allowed list.
- Importantly, the county tax proposal should include evidence of negotiations with the KRA reflecting on whether the Authority could not assume the revenue administration of the proposed tax or levy.
International and Regional Trade Facilitation Seminar
The Kenya Flower Council attended a seminar organized by the Ministry of Foreign Affairs and International Trade and funded by Trade Mark East Africa. Three key issues were discussed: The World Trade Organization (WTO) basic principles, meaning and implications to business, the Economic Partnership Agreement (EPAs), and the Tripartite Free Trade Area Agreement (TFTA).
MAIN PRINCIPLES OF THE WTO; MEANING & IMPLICATION TO BUSINESS Non- Discrimination
• Most Favoured Nation (MFN) Treatment – all concessions realized through negotiations are multilaterized to the entire membership without discrimination.
- For Business this could translate to more market access opportunities or more competition.
• National Treatment – internal taxes and charges and regulations are applied equally on both imported and locally produced products without any variation.
- For Business this could mean a level playing field and more fair competition.
• Recognition of a tariff as a legitimate measure of protecting a domestic market and not a quantitative restriction or any other form of non-tariff measure.
-For Business this could translates to more sales and more business profits.
• Binding - All negotiated and reduced tariffs are bound in order to make global markets predictable. (Predictability & certainty).
- Business operators prefer predictability and certainty in markets for production planning.
- Predictability and Certainty promote investments .
• Transparency - All Members Trade Policies are Periodically Reviewed and new Trade Measures notified.
- When trade rules and regulations are clearly understood and readily available, they ease the cost of doing business & compliance.
On the EPAs, the meeting was informed that consensus had been reached regarding contentious issues at the EPA negotiations. It was noted that:
• The legal scrubbing of the agreed initialed EPA text has been completed. • The legally scrubbed Agreement will be translated into 24 EU languages and Kiswahili. • Ministers will sign the agreement thereafter. • The signing is expected to be done during the first quarter of 2016.
On the status of the COMESA-EAC-SADC Tripartite Free Trade Area (TFTA) Agreement, the meeting was informed that the Agreement shall enter into force on the 30th day after the deposit of the 14th instrument of ratification by Member/Partner States of COMESA, EAC and SADC”. Negotiations were to be finalized by 2014 and tariff liberalization implemented within five (5) to eight (8) years.
Expected benefits Of the TFTA to Kenya include:
• Expanded market for Kenya manufactured products and services; • Inflow of investment into the country and increased potential for Kenya’s investment in the region. • Enhance Kenya’s exports into the region through harmonization of policies including the rules of origin, health and safety standards, • Enhance trade facilitation which will substantially reduce the cost of doing business; • Create momentum for regional infrastructure projects; • Enhance production and competitiveness of Kenyan companies. • Enhance industrial and infrastructure development; • Create employment to the women and youth through increased trade and other economic activities; • Enhance cooperation in customs and combating of unfair trade practices.
The region has a combined population of 527 million people which is more than 57% of total population of the African Union, a combined GDP of US$ 624 billion and a GDP per capita averaging US$1,184.
The meeting was informed that the World Trade Organization (WTO) will hold its annual meeting in Nairobi, Kenya in November 2015. This is the very first time the world trade body will be hosting the event in an African country.
Kenya-Japan Investment Seminar
On the 19th August 2015 the Kenya flower Council participated in the Kenya-Japan Investment seminar hosted by the Kenya Investment Authority KenInvest and Vision 2030.
The seminar was attended by a contingent of prominent business organizations from Japan seeking new opportunities in the Kenyan marketplace, their Kenyan counterparts and notable Kenyan government officials. As well as highlight the growing partnership between the two countries, the seminar set out to showcase Kenya as a favorable business destination, encourage foreign direct investment and provide a platform for businesses to interact.
Cabinet Secretary for Foreign Affairs and International Trade, Dr. Amina Mohamed reiterated the government’s continued commitment to facilitating private enterprise in the country. Other notable attendees conducted several presentations covering a wide scope of different initiatives pertinent to the country’s business environment.
The possible introduction of direct flights to Japan is of particular interest to the floriculture industry. Direct flights would further open up the Japanese market for roses and other cut flowers and as well reduce transit time and cost. Although a government to government agreement, KFC has and will to continue to lobby the initiative forward in order to expand the industry’s growth and reach.
Prof. Gitau Wainaina of Vision 2030 highlighted the projects efforts to expand the country’s renewable energy capacity. The project seeks to lower the current cost of producing 1kWh of energy by up to USD9 by way of geothermal power production. The introduction of cheaper, more sustainable geothermal power will undoubtedly result in a direct reduction in operational costs for all manufactures. The increased capacity will also provide energy access to the rural parts of the country where majority of member’s farms are located and help mitigate the power deficit and irregular supply.
The event signaled both the interest and intent the Japanese private industry is showing in the Kenyan marketplace and should spell growth not only for floriculture but the vast industries based in the country.
Energy Audit Update
The deadline to complete an energy audit as stipulated by the Energy (Energy Management) Regulation 2012, provisioned by the Energy Act 2006, is the 28th September 2015.
As per Section 6 (1) of the Energy (Energy Management) Regulation 2012, all industrial, commercial and institutional energy users consuming in excess of 180,000 kWh (classified between medium and high energy consumers) annually are required to conduct at least one energy audit every three years. Consumers who use less than 180,000 kWh (classified as low energy consumers) are not required to perform an energy audit. Failure to do so after the deadline and or to deny the commission or its agent’s access to business premises (for the purposes of the energy audit) constitutes an offence as per Section 18 (b).
Thereafter owners or an occupier of designated facilities are liable to a general penalty not exceeding one million shillings and or a prison term not exceeding one year, Section 19. It is important to note that upon completion of the energy audit an annual implementation report will be required as per Section 9 (1). Delay in submitting the annual report attracts a daily penalty not exceeding thirty thousand shillings.
In response KFC vetted and pre-qualified energy audit firms in order to secure the most favorable price together with experience for the interest of the members. The general audit covers the general requirements in the Energy (Energy Management) Regulation 2012. An Investment Grade Audit will cover both the general requirements and include a guideline on energy saving investment projects, budget and possible payback period. Both the GA and IGA report should outline possible energy and financial savings in the energy management plan. By the deadline of 28th September 2015 the following documents are expected by ERC; energy audit report, energy management plan and the energy policy.
To apply for the audit and receive the necessary documents, please contact us at