Flowers of Hope
I am Richard Fernandes, CEO and co-founder of Marginpar group.
We grow flowers in Africa for Europe, the Middle East and Asia. I started Kariki in 2002, growing niche flowers under licence from Marginpar on the slopes of Mount Kenya. It was successful, so we expanded and spread geographically into Ethiopia. Later it became apparent that we needed economies of scale and had to consolidate. So, we decided to merge our businesses.
Marginpar started in the 1980s, but it really gathered momentum in the 1990s when it was licensing growers in Zimbabwe, primarily for two flower varieties: Hypericum and Eryngium. Then, at the turn of the century, the Mugabe regime in Zimbabwe started to collapse and Marginpar’s Dutch owner, Rob, realised that he needed to move closer to the equator. Rob became my co-founder of the Marginpar Group in its current form.
At the turn of the century, Rob had 33 farmers under license in Zimbabwe. Today he has three, and in 2002 I started growing flowers for him in Kenya.
A big bouquet
We specialise in unique flowers, not just roses, and we have over 100 different varieties in our basket. Marginpar has eight farms in Kenya and three in Ethiopia, all together covering 360 hectares of land. We also have licenced growers in Tanzania and Zimbabwe, which adds another 100 hectares. We employ 4,000 people, 99% of them in Africa. On average we get about 12 Eurocents per stem at farm-gate. You may well wonder how we manage to produce flowers for that amount of money – but before covid-19 the company was turning over about 260 million flower stems a year. That's a big bouquet.
Because of the covid-19 pandemic the demand for flowers dried up, almost overnight. That hit us hard initially but around Easter time the demand picked up a bit. As the European economy started to relax some restrictions, by Mother’s Day demand had increased further. We are confident that it will continue to increase. Europeans who will not be going on holiday in 2020 will hopefully get some flowers in the house. Weddings and larger events may come later. There is a saying that flowers are recession-proof; to borrow from another phrase, they speak a thousand words. When people get hard up, they will still find money to buy flowers.
Our big constraint now is air freight. With the lack of passenger airplanes there is huge demand for the limited cargo aircraft flying around the world. Crazy money is being paid for these, ferrying personal protective equipment and medical supplies from Asia into Europe. But there aren’t many places with high altitude on the equator, so it’s difficult to move our business. So, our sector should also be able to access emergency liquidity.
We grow people, our people grow flowers
The first week of the outbreak we had to take drastic measures. Unfortunately, we couldn't retain our seasonal staff, so we didn’t renew expiring contracts. Because of our ‘Hamuka’ people focused culture - we grow people, our people grow flowers - we have retained all our permanent staff. Our people came up with a proposal that no one should be laid off by everyone working less hours. People took less money home but at least everyone kept earning. Management took a pay cut. Today, we’re back up to 100% of our permanent employees full-time at work with full pay. We communicate a lot about the importance of a safe working environment at the farms, but what happens when people go back home? That’s why we reach out to the communities and support them to ensure they follow safe practices.
The number of cases and fatalities in Kenya at the time of writing is not going up exponentially. So there is some laxity coming in now. We have a population of 45 million who must put bread on the table. Everyone here is living hand-to-mouth and the government is not going to pay you if you aren’t working. That’s the big difference with Europe. My daughter’s friends in London are furloughed and getting paid while they sit at home. That doesn't happen here in Africa. So, you see resilience here. We’ve got a young, well-educated population, by African standards. There’s a lot going on and people don’t sit around. They get busy doing all sorts of things including amazing innovation. It’s what I love about Africa and in particular about Kenyan people.
Flowers of Hope
As Chairman of the Kenya Flower Council, we supported the project Flowers of Hope together with the Kenya Private Sector Alliance. If we couldn’t sell our flowers, we could at least donate them to hospitals and health workers in Kenya. Later, the idea came up to send some into Europe. The Flowers of Hope, which we donated to the United Kingdom, even carried a message on the sleeve from our President.
Flowers of Hope wants to create awareness of the thousands of people who are dependent on the flower industry. So when we’re back to normal, we hope that people will remember us and keep buying flowers from Kenya.
I believe in trade over aid. I see too much aid just being wasted, adding no or little value. Getting things done in Africa is the way to go. So, I support DFI’s commitment to investing in companies, backing initiatives that create sustainable employment. That is the future.
BIO has invested USD 7 M in equity in Agri-Vie II, a specialized food & agribusiness investment fund active in Sub-Sahara Africa. They have invested in Marginpar Group.
Mr Richard Fernandes is the CEO and co-founder of Marginpar Group, formerly Kariki. This is his story.
Agri-Vie Fund II
Equity € 6,552,700.00 (2017)Sub-Saharan Africa, Kenya, South Africa, Tanzania, Uganda, Zambia
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