ADDIS ABABA– The Ethiopian flower industry is flourishing with the help of government incentives and low labour costs, according to the the leading industry publication, “Floriculture”.

The magazine says Ethiopia is now the second-largest flower exporter in Africa, with more than 100 flower growers cultivating 1,700 hectares of land.

We are now second only to Kenya in Africa, and we expect to overtake them soon,” Floriculture quotes Berhanu Ludamo, the head of the Promotion and Information Service of the Ethiopian Horticulture Producers Exporters Association, as saying.

Ethiopia earned 250 million US dollars from horticultural export in 2014. The amount is expected to increase this year due to the expansion of horticulture farms. Berhanu added.

The area will grow to 3,000 hectares, he said, adding that Fontana Flowers will begin operation of its horticulture farm in Ethiopia with an investment of 11 million US dollars.

Fontana Flowers has leased 100 hectares of land at Wenjeta and Wegelta, 20 Km from Bahir Dar, the capital Amhara Regional State in northwestern Ethiopia.

Currently Fontana, which has hired 1,300 employees, is clearing land for growing roses and for warehouse construction. The company will exclusively grow different cut rose varieties, beginning with 65 hectares, with target revenue of 95.9 million USD a year.

The company will export to the traditional markets in the Netherlands, but it also has other direct markets in the Middle East. Four horticulture companies are already in operation in Bahir Dar. Three other India-based companies have acquired investment licences and land to engage in the horticulture sector.

Some 90 hectares of land is allocated to the companies with expected export revenue of 4.1 billon birr (about 150 million USD), he stated.

With the number of companies engaged in the flower exports currently reaching 90, more than 1,442 hectares of land are under flower cultivation countrywide. The horticulture sector in general has developed above 12,552 hectares of land, according to data obtained from Ethiopian Horticulture Development Agency (EHDA).

In the coming five years, the revenue is projected to increase to 550 million USD, according to Berhanu.

Climate is a major competitive advantage. Parts of the country south of Addis Ababa are 2,000 metres above sea level, and this gives it an ideal environment for floriculture, explained Shiferaw Mitiku, a researcher and agricultural marketing consultant in Addis Ababa.

The export-oriented agricultural policy, attractive incentives, macro-economic stability and cheap labour constitute the competitive edge for the Ethiopian flower industry, he said.

According to the Ethiopian Investment code, flower growers are offered a five-year tax holiday, duty-free imports, access to bank loans and farm lands as well as a 100 per cent exemption from payment of export Customs duties.

The competitive advantages are attracting foreign flower growers. They are coming from Kenya, Tanzania and Uganda and from Ecuador, the researcher said. The Netherlands, which is the world centre of the flower trade, is also investing in local flower farms.