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July 14, 2008

Kenyan flower grower Sher Karuturi diversifies into food production in Ethiopia

Leading flower grower, Sher Karuturi, says that it will soon enter the food production sub-sector, with plans to establish extensive rice and wheat farms in Ethiopia already at an advanced stage.

According to the company’s chief executive, Rao Karuturi, the company is negotiating with the government of Ethiopia for more than 100,000 hectares to produce rice and a similar acreage for wheat and maize.

Sher Karuturi currently produces over 1.5 million rose stems daily in Kenya and Ethiopia, for export mainly to European markets. The business earns Kenya about $100 million and Ethiopia about $50 million.

In addition to the rice and wheat farms, Sher is also set to inaugurate a 2,000-hectare vegetable farm in Ethiopia for export to Europe. The company already runs similar vegetable farms in India.

According to Mr Karuturi, the cereals produced at the Sher farms in Ethiopia will primarily be consumed in eastern Africa, which has suffered persistent food shortages in the past three decades. The surplus will be exported to stabilise the global supply situation.

“Globally, about 650 million tonnes to 700 million tonnes of rice are produced every year, but only about 6 or 7 per cent of that is actually traded globally, with 94 to 95 per cent being consumed within the country where it is produced,” said Mr Karuturi. “Our percentage in terms of global trading would thus be around 2 to 3 per cent, so we expec t to have a significant influence on the global supply of rice.”

Mr Karuturi attributed the current rise in food prices to the higher cost of fertilisers, many of which are petroleum-based and whose prices are therefore dependent on the cost of oil. High fuel costs, he added, also impacted on food prices because most large farms around the world are highly mechanised and incur huge fuel bills.

The Sher boss conceded that his company’s latest venture is likely to face challenges from inadequate infrastructure in the region, including decrepit road and rail networks and lack of storage depots. These constraints, he said, will have to be addressed if African countries hope to become self-sufficient in food production.

The East African

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