The decision to send home 2,500 workers by Oserian is an eye-opener and soon other farms shall follow suit
The recent sacking of more than 2,500 workers in one of Kenya’s largest producer and exporter of cut flowers has brought to the fore woes afflicting an industry that is a major foreign exchange earner.
The industry that employs close to 100,000 workers has been hit by a wave of sackings in the last few months thereby attracting the wrath of ‘toothless’ unions.
Oserian, which is among the leading exporters of fresh cut roses, sent workers home last week in what the company said was restructuring and diversification into other projects.
The layoffs have opened the Pandora’s box into an industry going through lean times with key flower markets in Europe shrinking while the entry of Ethiopia in international markets is giving local growers a run for their money.
“The decision to send home 2,500 workers by Oserian is an eye-opener and soon other farms shall follow suit ,” said Kenya Plantation and Agricultural Workers Union Naivasha branch secretary Ferdinand Juma.
In 2016, Oserian laid off 400 workers basically a year after the once flourishing Karuturi flowers closed shop sending home more than 3,000 workers.
While 60 per cent of flower farms are based in Naivasha, the mass sackings have had negative effects in the economy of the lake -side town. This comes as it emerges that flower growers had devised a new trend of employing workers on contract thereby denying them benefits and maximising on profits.
“We have seen cases where investors are employing workers on seasonal basis meaning that they cannot get the annual pay rise,” said Juma. “Some workers, who were on a six-month notice were laid off when the union was negotiating salary increaments.”
While the Lake Naivasha Growers Group (LNGG), an umbrella body of flower growers , downplayed the sackings, several managers interviewed said all was not rosy in the industry. LNGG says the Oserian layoffs is an isolated case while the rest of the growers were still “doing” well and exporting flowers to the European market as usual.
“From the list of our members, Oserian is an isolated case and we cannot say the industry is suffering because of one company,” said an employee who declined to be named. Kenya is the fourth largest exporter of cut flowers and commands a global market share of seven per cent after The Netherlands, Colombia and Equador.
A manager from a leading farm who sought anonymity said high labour costs had forced growers to rethink their strategies hence the reason for employing on contract.
He said the flower business was a tricky venture and one that required innovation to cope with the changing market dynamics and emerging competition. “Selling of flowers in Europe is a restricted venture and only those farms that meet the set thresholds are allowed to access the market,” he said.
With Ethiopia becoming a major force in global floriculture in the past two decades, local producers and policy markers have to go back to the drawing board.
Ethiopian flower exporters are currently focused on Europe, and have made the country Africa’s second-biggest producer after Kenya and fourth-equal worldwide, according to Rabobank research based on 2015 figures.
“Ten or 15 years ago Ethiopia was not exporting a single rose, but now we have earned our position in the world market,” Girum Abebe, regional manager of State-owned Ethiopian Airlines Enterprise that transports stems in the bellies of passenger jets told Bloomberg.
Ethiopia’s burgeoning flower-growing industry is setting its sights on the US in a bid to break the dominance of Latin American producers in supplying roses and other blooms to the world’s largest economy.
“Ethiopia is doing so well because its labour costs are a bit cheaper than Kenya and if anything its climate is even better, producing bigger blooms,” said Amsterdam-based Rabobank floriculture analyst Cindy van Rijswick.
Competition from other emerging exporters that include South Africa, Uganda and Tanzania are also angling for bigger slices of the global market thus piling pressure on local growers. Additional reporting from Bloomberg.