Kenya will open a cut flower distribution centre in China in a new strategy aimed at creating a direct sales link and grow its exports to the Asian market.
Industry and Trade Cabinet Secretary Peter Munya said the centre based in the Southern China province of Hunan will be run in partnership with a Chinese firm, Funfree International Trade Company.
He said the State-run Export Promotion Council (EPC) and the Kenya Flower Council, the umbrella body for large-scale flower producers, will sign a Memorandum of Understanding with the Chinese next week.
The deal will be inked on the sidelines of a two-day First China Africa Economic and Trade Forum from June 27 (next Thursday) in Changsha City in Hunan Province.
The proposed distribution centre will see cut flower producers airlift produce to Hunan as opposed to Kenyan flowers largely accessing Chinese markets through an auction in Amsterdam, the Netherlands.
“This will be a game changer as Hunan wants to be a global trading centre for flowers,” Mr Munya told reporters in Nairobi.
“We are trying to make direct links so that we sell to China directly.” China Southern Airlines, headquartered in port city of Guangzhou, will also be launching direct flights between Nairobi and Changsha, targeting Kenyan exports into Chinese market during the expo.
“We will be witnessing the launch of the direct flights to Nairobi,” EPC chief executive Peter Biwott said. “The diversification of flower export markets will help us compare prices.”
Earnings from flower exports rose 37.71 percent in 2018 to Sh113.2 billion from Sh82.2 billion a year earlier, data from Horticulture Directorate show, accounting for 73.86 percent of the Sh153.7 billion horticulture inflows.
Flower producers are likely to be among the biggest winners of the Sanitary and Phytosanitary (SPS) Protocol that Nairobi signed with Beijing last November, opening up the expansive market to Kenyan produce.
Other produce covered under the deal include avocados, vegetables, French beans, legumes (such as peas, beans and green grams), herbs, mangoes, peanuts and macadamia.
Kenya has made accessing the populous Chinese market a priority in achieving her ambitious target of growing exports by an average 25 percent every quarter under Integrated National Exports Development and Promotion Strategy, unveiled in July 2018.
Aggressive marketing in China last year earned Kenya Sh2 billion in exports to the world’s second largest economy.