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Elbur Flora Ltd. is a Kenyan-owned company founded in 1998. The Owner and the Finacial Controller is Edward Kaarah.
Elbur Flora has a production facility area of about 25ha and has two farms. The first farm is 2,100 m above sea level and has an area of 5.5 ha, and the second farm is 2,300 m above sea level and has an area of 19 ha. The land acquisition cost around Elburgon is 250,000 shillings / acre, so the land acquisition cost of about 24.5ha for the 1st and 2nd farms is 26.7 million yen.
We have invested 250 million shillings in the construction of the facility, of which 100 million shillings are financed by banks. We are considering expanding a facility of 20ha in 2008, and are currently negotiating with a bank to secure construction funds.
Loans from banks have a very high repayment rate of 17-18%. When I talked about the fact that the interest rate on loans in Japan is about 3%, I was seriously asked, “It’s difficult to pay a bank loan anyway.
The location of Elbur Flora is 60 km northwest of Lake Naivasha, west of the city of Nakuru, and 150 km from Nairobi Airport. Naivasha, where many cut flower farms are located, has access to the abundant water of Lake Naivasha, but its altitude is low, and it is not always a suitable place for rose production. That is.
Transportation to Nairobi Airport will be carried out using our own refrigerated truck. In Kenya, infrastructure development has been delayed, and most of the roads are not paved except for the arterial roads. It will take about 7 hours from the farm to the airport.
In Elburgon, there are four rose production companies in addition to Elbur Flora, and in addition to the high altitude, there is a forest in the vicinity due to a little heavy rainfall, it is easy to secure water, and the air is clean. It features a large amount of sunlight, a bright flower color, and a large flower diameter.
All production facilities are made of wood, and eucalyptus columns are used. Eucalyptus contains a lot of resin, so it does not rot easily and is suitable for greenhouse columns. Edward Kaarah’s words, “Production facilities made in Israel look better, but it is not important to make the facility look good, it is important to improve the quality of the roses,” the same is impressive. I remember hearing this from Srinivasa R. Kaza of Rosette, Agro-tech Ltd, India .
Eucalyptus was planted beside the greenhouse, and preparations for facility expansion were steadily progressing.
The production facility is built on a gentle hill slope, and the entire facility is sloped. Cultivation beds are made along this slope, and I think that the good drainage using the slope is also related to the high quality.
The temperature inside the facility from July to August is like Ecuador, with a minimum temperature of 8-9 ° C and a maximum temperature of 32 ° C.
The two photos on the lower right are in the state immediately after replanting, but I was surprised that the planted seedlings were very small. Normally, I think that it will be planted after growing a little more, but since it will take root in this state, I think that it is the most suitable climatic condition for roses.
Marigold was mixedly planted to prevent nematoda, and natural enemies were introduced to establish an environmentally friendly production method. What looks white in the photo below is the lime treated to adjust the pH of the soil.
The number of employees is 500 with a total production area of 25ha. The salary of workers is guaranteed to be at least 4,500 shillings/ month, and the salary varies depending on the ability. Some employees are paying 20,000 shillings.
In addition to salary, bonuses are paid to workers according to their abilities. In addition to the salary, 100% of medical expenses are paid, tuition to elementary school is paid, and 100% of housing and utilities are paid, and I felt that the welfare program was substantial.
I asked, “Can employees live on this salary?” “Since the residents in this area were farming before working at Elbur Flora, each employee has a small but farmland, and their living is basically close to self-sufficiency. 1 family (children) The living expenses of 3-4 people) are 1,000 shillings (1,760 yen) / month or less, and basically there is no need to buy anything. Therefore, most of the salary can be used for savings, which is useful for improving living such as purchasing electrical appliances. The answer is “.”
Labor management is thorough, and the color of the uniform distinguishes the ranks.
Yellow: Quality control manager
Blue: Supervisor
Green: Worker
The salary of the supervisor is 20,000 shillings/ month, and the salary of the production control manager, who is in the upper rank of the quality control manager who guided me, is 100,000 shillings/month. It was about.
The harvested flowers are first sorted in the greenhouse, sorted into buckets, and brought to the flower selection plant.
There was a reservoir at the highest point on the second farm. Rainwater that has fallen in the greenhouse is collected in the lowest stormwater tank, pumped up to the stormwater, and used as irrigation water. Since there is a height of 10 m or more between the reservoir and the greenhouse, there is almost no need for pump power costs for irrigation.
There was a facility for pesticide adjustment directly under the reservoir. Agricultural chemicals are sprayed through a plumbing facility dedicated to agricultural chemicals that is spread throughout the greenhouse. Naturally, there is a difference in elevation between the greenhouse and the pesticide adjustment facility, so I think that the power cost of the pressure pump will be low. There was a sign of “HATARI SUMU (poisonous danger)” at the pesticide pipe in the greenhouse.
About 40 employees were working on flower selection adjustment at the flower selection site.
Elbur Flora’s second farm is located at an altitude of 2,300 m, and the temperature inside the greenhouse has a daily disparity close to that of Ecuador, so it is characterized by long cut flower lengths in addition to the size of flower stalks. As you can see in the two pictures on the lower left, many cut flowers with a length of 80 cm or more can be seen. The selected cut flowers are kept cold in a refrigerator at 5 ° C.
Annual production is 20 million. It exports 97% of the total yield to the German flower market Landagard and the Dutch flower market Flora Holland , and direct sales to non-market supermarkets and wholesalers are extremely low at 3%.
The reason for not conducting direct transactions with supermarkets is that contracts with supermarkets leave the right to select products and standards to the business partners, and there is a high possibility that they will lose their independence. Most of the shipping boxes listed the Landagard flower market in Germany, but another shipping box listed the Dubai wholesaler Black Tulip in
the United Arab Emirates (UAE). Judging from the above, I think that transportation to Germany and the Netherlands is carried out via Dubai using Emirates Airlines.
Finacial Controller Edward Kaarah visits export destinations Germany and the Netherlands several times each year to conduct marketing surveys targeting wholesalers in the flower market, and conducts marketing surveys on product trends, the relationship between quality and price, and flower color and price. We are trying to understand the relationships and formulate marketing strategies for the following year and beyond. At the time of the survey in Germany and the Netherlands, he visited a breeding company to select and prototype newly introduced varieties.
Cultivars include Marie Claire, Chelsea, Sunny Rose Wave, Magic Wave, Red Calypso, Rodeo, Sacha, Viva. The selling price of Marie Claire, the most popular variety in Germany, is 0.3-0.4 euros (33-65 yen) / book at FOB, which is a ridiculously high price.
In the topic, he showed a strong desire to export to Japan, and was asked to introduce a Japanese import trading company. In terms of quality, I thought it would be possible to obtain a fairly high evaluation comparable to Ecuadorian roses in Japan as well.
Sales in 2006 are 80 million shillings (140 million yen), and the average selling price (FOB) is estimated to be 4 shillings (7.04 yen) / piece, estimated from the annual production of 20 million pieces. In 2007, sales were 90 million shillings (160 million yen) in the six months from January to July, and sales are expected to double last year.
Last year’s net profit was 25 million shillings (44 million yen), and the rate of return is 31%. It is related to the low labor cost and low facility construction cost.
I tried a simple capital calculation. Assuming that 150 million shillings of facility construction costs with own funds will be amortized in 10 years, 15 million shillings will be paid annually. 2 million shillings a year, assuming that 100 million shillings from banks will be repaid for 10 years. 10 million shillings with an average of 10% interest repayment to banks. The average salary of 500 employees is 5,000 shillings / month, which is 30 million shillings. Probably 3,000 shillings as pesticide fertilizer costs are about the same as labor costs. The total annual cost is 587 million shillings, which is almost the same as the annual sales amount in 2006.
Therefore, it is a calculation that the self-investment amount of 150 million shillings can be recovered in 10 years. Since the company was established in 1998, it may be time to expand new production facilities.
The fridge stored the rootstock Natal Briar and grafted varieties. Preparing for the production of seedlings for replanting. The royalties of varieties bred in Europe are about 1 euro, which is almost the same as in Japan, and they are sure to pay.
The flower-keeping test is conducted only in the high season, and July is the off-season, so it is not conducted. Regarding this point, I thought that it would be necessary for a year as long as it was shipped.
