Charles W. Corey
3 August 2009
Kenyan-born businessman Mike King'ori has seen the results of closer U.S.-Africa trade ties fostered under the African Growth and Opportunity Act (AGOA) and stands ready to further expand his own business and trade relationship with the United States.
King'ori is director of marketing and operations and an owner of K-Net Flowers Ltd., a family business in Kenya that specializes in exporting cut flowers and foliage worldwide.
K-Net Flowers, according to King'ori, wants to expand the multimillion-dollar business relationship it already enjoys with the United States and send it "to the next level" by supplying cut flowers to supermarket chains across the United States.
"We realize that the mass market is where we need to take it to in the United States because that is growing. ... If that would take place, I think we would struggle with the volumes. There is huge potential to supermarket sales in the U.S. of African products," he said.
Speaking on the importance of the U.S. African Growth and Opportunity Act (AGOA) and of working with the East and Central Africa Global Competitiveness Hub in Nairobi operated by the U.S. Agency for International Development (USAID), King'ori said: "We have seen the benefit. We can see the figures and believe that this continuous partnership can open up this market."
King'ori's business, which started exporting cut flowers, mostly roses, to the U.S. market in 2005, averages more than $2 million in U.S. business annually. His company exports about 40 million cut flowers a year, with the U.S. component making up about 30 percent of that volume. K-Net's other big export markets include Europe, Australia and Japan.
King'ori said his business "adds value" to its cut flowers by custom packaging them for their targeted market. He "sleeves" the roses in custom clear plastic packs, bar-coding them for easy pricing by the merchant and attaching flower food if required.
"This has been a success story for us," he said.
Growers traditionally have shipped flowers to the main flower auction in Holland, a country "which is not a consumer of flowers but a re-exporter" into Europe, Japan and United States, King'ori said.
"African products have for a long time been sold in Japan and the United States, but really" much of that, he said, has come through Holland, and those products often did not show their country of origin.
"So we felt there was a need to try to penetrate these markets -- the United States, Japan and Australia -- which we call 'emerging markets.'"
King'ori credited the USAID East and Central Africa trade hub for helping his company create and develop a Web site.
"One of the key things we realized is that a Web site is one of the key elements you need to get entry into the U.S. market, unlike other markets," he said. "Our Web site is the first point of entry in terms of the seriousness of the business. If you don't have a Web site you don't seem to be in the business," and thus do very little business. "So that has benefited us to date. We truly appreciate the benefit of that."
In March 2006, King'ori said, thanks again to the East and Central Africa trade hub, his company was able to participate in the Miami Wildflower Trade Show.
"The trade hub facilitated our visit [by securing U.S. visas, providing letters of introduction, and helping with travel costs and arrangements] and sponsored the stand" that allowed his company to display its flowers to U.S. buyers and wholesalers.
This marked his company's "first real contact" with the people who actually do the buying, control the marketplace and operate the port in which the products are imported, he said.
"The location in Miami was actually very good, because we were actually now able to see firsthand how the product comes into port and then see the logistics" of the marketplace, as well as meet with contacts, "put a name to a face" and set up a business network.
"This business is a business of trust, so when you come face to face with somebody, it is easier to do business with them."
King'ori said his flower-buying business was actually able to raise the price it paid to Kenyan farmers by 10 percent because of the money it saved after it established these direct U.S. business relationships that cut out several middlemen.
Although his business suffered some setbacks with the U.S. market in 2007-2008 because of the extreme hike in oil and shipping prices, King'ori said, the hub helped K-Net continue to visit the U.S. flower shows in Miami and "keep a presence."
He said other African flower growers from Ethiopia, Tanzania and Mauritius have appeared at the shows -- courtesy of other U.S. trade hubs in Africa -- and actually won two awards for their floral displays at the African pavilion. He said they travel with their designers, who help set up the displays.
The East Africa hub also coordinated a visit to the U.S. Department of Agriculture in the United States to educate his company on the U.S. import standards pertinent to his product.
Asked about the timeline for flowers exported to the United States from Kenya, King'ori said they are cut on day one, air-shipped out of Kenya on day two, arrive in Miami on day three and are in the market for sale to consumers on day four. Despite the long distance, he said, African roses have proved to be hardy and have a long vase-life.
King'ori said in June his company, along with other African providers, participated in the Super Floral Show in Atlanta, the biggest mass market floral trade show -- much bigger than Miami's -- thanks again to the USAID trade hubs.
Thanks to AGOA and the USAID trade hubs, King'ori said, African flower merchants are now able to get to the American market to do business and have learned how to do business and how to package their product for the American market.
King'ori said he now wants American wholesale buyers and industry decisionmakers to visit Kenya to "see the level of sophistication" firsthand and work with Kenyan growers and consolidators to create a closer partnership that could further benefit both sides.
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Labels: African Growth and Opportunity Act, Horticulture in Africa, K-Net Flowers, K-Net Flowers Ltd., Making Money selling flowers to europe and USA, Mike King'ori