10 December 2003
South Africa produces just a fraction of the total world export market in flowers, but a few factors may help the country blossom into a serious exporter in the near future.
According to the South African Exporter – a Business Day newspaper supplement – South Africa produces only 0.5% of the total world export market, which records about US$25-billion in annual sales. However, deals with Kenya and Holland look set to expand the industry’s capacity.
South Africa’s floriculture exports – including bulbs, cut flowers, foliage and plants – rose by 51% to R279-million last year, according to the South African Exporter. However, this was mainly thanks to the strong rand, because volumes only grew by 13%. The biggest growth in weight was in plants, which was up 69%. Cut flowers contributed R140-million.
According to the SA Flower Export Council (Safec), 80% of all exports go to countries directly north of South Africa, 12% to the Americas and 8% to Japan.
Safec is a federation of associations, namely the KwaZulu-Natal Cutflower Growers Association, the SA Flower Growers Association and Somerfleur, that work together on a national level.
Members of these associations can take part in international flower shows organised by the department of trade and industry (DTI) in co-operation with Growtech International. The DTI supports and works closely with Safec in putting together opportunities for international marketing and investment.
The head of Safec, Dirk de Bruin, told the South African Exporter that “there is no doubt that the world is starting to recognise SA for the serious competitor it has become.”
South Africa produces mainly roses, Proteas and Cape foliage, but it’s in the chrysanthemum where its strength lies.
The South African Exporter reports that local producers have tied up contracts to supply their Kenyan counterparts with chrysanthemums, which the Kenyans will include in bouquets destined for export to UK chain stores such as Tesco and Sainsbury. Similar deals have been sealed with Dutch producers, who have traditionally supplied the European market.
While Kenya exports nine times more flowers than South Africa, the country is unable to grow chrysanthemums. Also, it was not economically viable for South Africa to export the chrysanthemums it produces because of a low price-to-weight ratio.
In another development, mining company Gold Fields has started a rose-growing project to ensure continuation of employment once its gold reserves are eventually depleted.
The increase in the production of chrysanthemums and roses is likely to boost export volumes and reduce freight costs. However, the lack of co-operation between highly competitive flower producers in the pooling of cargo may also hamper exports.
Another obstacle to the country’s export ambitions is the high demand for flowers on the local market. According to the South African Exporter, South Africa consumes about half of its flower production, while the other half is exported.
Pick ‘n Pay and Woolworths, in particular, have followed international trends by selling value-added products such as mixed bouquets on the local market.
This means that when the global market gets tough, producers can simply fall back on the domestic market. But De Bruin argues that producers should change their mindsets and concentrate on becoming consistent exporters.
Another problem the industry faces is the high capital, management and labour costs required to realise profits. Also, says De Bruin, the frequent emergence of new producers puts pressure on the more established players.
The withdrawal of the South African Protea Producers and Exporters Association from the SA Flower Export Council, which represents the bulk of the country’s flower producers, is also seen as a negative development. De Bruin says the lack of unity forces the government to deal with two agencies instead of one, and that this creates confusion among foreign clients.