Story - Richard Fernandes

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12.06.2018

Empowering people is what counts.

Most people come to do a good day of honest work. That’s why you have to ask yourself why things go wrong. It’s not about who is the problem, but what is the problem. It’s a question of trust. Thanks to this attitude people can grow. Our motto is We grow people, our people grow flowers. That’s what’s really important. Your people are number one, not your customers.


“I was born in Kenya; as were my parents and my wife - so I am a real Kenyan. You could say that farming is in our blood. My father began by farming sheep and cattle. In 1992 we bought a piece of land and started to grow vegetables to export them to the UK and Europe. Together we gradually grew the business and then sold it to a larger company in 2001; for my father this was the perfect time to retire.

I knew that margins on vegetables were low. You have to produce very high volumes in order to gain a reasonable profit. I therefore decided to take a risk and grow flowers. Flowers have a higher value and I already had some experience in horticulture, since my father and I had dedicated a small corner on our farm to growing flowers. I started the first farm in Nanyuki, around 200 kilometers north of Nairobi. My brother Andrew joined me a few years later. We decided against growing roses, because there was already a lot of competition with other farms across Kenya growing them. We worked with Marginpar, a unpacking/marketing organisation based in Aalsmeer, The Netherlands, who sell our products all over the world and more significantly in Europe, Australia, Japan, US and Canada.

Growing people

In 2012 margins were getting tighter, so I wanted to find a way to work more efficiently. That’s why we implemented a Japanese method of working, called “Kaizen”, or what we refer to as Hamuka. It’s a question of culture and organization in which trust is a key element. Moving away from the traditional ‘top down’ approach, it’s not about the management and those individuals in positions of power pushing things to get done, while the employees beneath them don’t understand what’s happening and why. It’s about an organization that values people.

Look, most people come to do a good day of honest work. That’s why you have to ask yourself why things go wrong. It’s not about who is the problem, but what is the problem. It’s a question of trust. Trust is so important. Thanks to this attitude people can grow.

Our motto is We grow people, our people grow flowers. That’s what’s really important. Trusting, valuing and empowering people. A lot of our staff, or value adders as we call them, have grown thanks to this way of thinking. They started with a red cap, as non-skilled workers, and are now our managers. Take Miriam for example. She started as a junior and is now a Farm Manager at our Thika farm. The same goes for Adan, our Kaizen Coordinator. Although he couldn’t go to high school, he has grown into his role and has become an excellent coordinator. Our current HR manager started in production, she became a cleaner at the office and because we recognized that she was eager to learn, we paid her school fees.

Happy people

Kaizen - Hamuka not only grows people. We have increased our performance and production per m2 and we have increased our turnover. That’s where the benefits are coming from. In the meantime, our people are happy. We look after them. We want to have a decent working environment for them: clean and effective. As Kaizen says: a place for everything and everything in its place. We’re a very open company in terms of financial and strategical information. We try to share where we are now and where we are going with the different teams involved. Everyone knows about our global target of 200 kes, 200 million exported stems per year. Everybody here at Thika farm knows our local target of 22.4 million stems this year and everybody knows their own personal target.

With Kaizen we grew from 8.5 million stems in 2010 to 24.6 million stems in 2017. We achieved this with the same number of employees and we did it without expanding our m2. We use only what we need, meaning we have practically no inventory. We turn our inventory over 52 times in a year, meaning that we hold only 1 weeks inventory in our stores. To achieve this you must have a good relationship with our suppliers, so we invest in this. That’s also something I’ve learned from Kaizen: business is about partnerships, it’s all about relationships. Very few companies realize how important the culture of your business is. Look after your people and they will look after your customers. Your people are number one, not your customers.

We have a social responsibility

We have an impact on our employees but also on our environment and the communities in which we operate; we have a corporate social responsibility. We’ve helped build several schools and additional class rooms. We support children going to high school. We support the physically handicapped. We partner with the government concerning security issues like burglary and carjacking. We try to improve the roads.

We know there are issues with clean drinking water, so every employee on Kariki Farm is allowed to take 5 liters of clean water home each day. We have a nurse and a medical team on each farm. We also provide soap and other essentials to day care centers. We acknowledge that problems in the community have an impact on the employees and their production, so we want them to know that they can turn to us.

Right now, it’s difficult to find young people who want to do this type of work. That’s why we also have employees all the way from Western Kenya. We might consider some automation in the future; the new generation doesn’t want to do manual labor. But that’s a global trend. We have a business where we must meet peaks like international Mother’s Day, Valentines’ Day, Christmas and so on. Meeting these peaks is a challenge, especially when you’re short on people.

Eat or be eaten

Where I want to go with my group? You know, I really like developing things, otherwise I get bored. Earlier this year I was on a trip to South America. Over there seven companies control 70 percent of the market. That will be the trend here in Kenya as well: the big companies get bigger. I needed the capital of the Agri-Vie Fund II to grow my business. Nowadays it’s eat or be eaten. Be swallowed or swallow. So now we are looking to see whether we can link up with partners. With a farmer growing roses for example. In doing so, we can offer bouquets, adding more value to our product. Selling online, e-commerce will take a bigger share of the market in the future.  You can get a subscription for anything today, why not flowers? Imagine if Amazon did this. Retail is growing, that’s a fact. We are currently very EU-orientated.  China will become a big player in future, we’re already in Japan.


KARIKI GROUP & Agri-Vie Fund II

BIO contributed 10 million euros in 2017 to the Agri-Vie Fund II. This fund is a private equity fund, focused on the food and agribusiness sector in Sub Saharan Africa, Kariki is one of the portfolio companies.

Richard Fernandes is founder of the Kariki Group that consists of four farms in Kenya. In 2017 the group partnered with the three farms owned by Carzan Flowers Kenya Ltd.

Together they employ around 3000 people. The Kariki Group operates according to the principles of Kaizen, a standardization method originating from Japan; Kaizen works with the 5S: Sort (What do you really need?), set in order (a place for everything and everything has its place), Shine (clean), Standardize, Sustain (don’t fall back in old habits).

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