Jonathan Ralling is one of the five keynote speakers at the upcoming International Floriculture Forum. The international commercial director of Flamingo Horticulture will be talking about the development of new markets for flowers and vegetables. “The United Kingdom is our main distribution country, without a doubt. But we can’t ignore opportunities in other places.”
It wasn’t long into the conversation with Jonathan Ralling when Brexit, probably the most discussed topic within the international trade at the moment, came up. Flamingo Horticulture has hundreds of hectares of production in Kenya and South Africa and they export most of their flowers and vegetables to the United Kingdom. The country has been their main market for more than 35 years. Of all their produce, 70% is currently going to the UK and the other 30% goes to the Netherlands and Germany, reports Ralling.
And it happened to be the UK that, after a referendum, decided to leave the European Union. Subsequent negotiations about their future relationship with the EU have been slow and difficult. The consequences are still uncertain, but chances are that exporting to the UK is going to be more expensive, more complicated and more time consuming.
Negative impact Brexit
In fact, companies trading with the UK, such as Flamingo Horticulture, have already been experiencing the negative impact of the Brexit vote ever since it took place, on the 23rd of June 2016. The value of the British pound immediately declined, resulting in a decrease of export turnover.
It’s hardly surprising, therefore, that one of the first aspects mentioned by Ralling is the exchange rates between the pound, the dollar and the Kenyan shilling. “The exchange rate of the pound has a direct impact on our income. We’re trying to manage the effects by hedging our currency forward.”
The international commercial director is more concerned about another aspect of the future relationship between the UK and the EU though, and that’s time. Ralling: “Some of our flowers and vegetables are shipped directly to the United Kingdom and some of our produce is distributed to the UK via other European countries. How are we going to get our flowers and vegetables across the border in the future? The biggest issue is time. There might be border checks. They’ll add to the costs and, much worse, to the time required to get a shipment into the UK. The latter is disastrous for fresh produce of course.”
To neutralise the negative effects of Brexit, Flamingo Horticulture has already started to reduce their costs. “We have no control over the exchange rate of the pound. But we can try to work as efficiently as possible and cut costs wherever we can. Scale growth could be a way for us to increase our efficiency.” Flamingo has changed their cost model. “We need to ensure that our cash flow is sufficient for investments”, explains Ralling.
Looking for other markets
The upcoming Brexit has motivated Flamingo Horticulture to look for other markets. “That’s going to be my main topic at the International Floriculture Forum: unlocking other markets. The United Kingdom is a huge market for our business, without a doubt. And we will try our best to manage our trade with the UK and recuperate it. But we shouldn’t dismiss opportunities in other places.”
Ralling names the Middle East, Australia, the Far East and the United States as potential new markets for Flamingo. He points out that Kenya’s relationship with the USA is good. “But it will take time to get to know the market and understand how we can compete with the South American countries.”
The first direct passenger flight from Kenya to the USA is scheduled to take place soon and there will be some space for fresh produce on those flights. Ralling also sees opportunities for flights to the USA via Europe or Dubai.
President Uhuru Kenyatta
Another country worth exploring according to the managing director, is China. Kenyan president Uhuru Kenyatta was there only three weeks ago to speak with the Chinese government about trading opportunities. Ralling says that there already is a connection between the two countries. China has been investing in the Kenyan infrastructure and horticultural technology for a while, for example. He therefore expects that there’s scope for trade between the countries, too.
What about the company’s large production site in South Africa? Is the company afraid that the South African government will expropiate their property? Ralling responds that as a large exporting company, Flamingo is very valuable to the region. “We create a lot of employment, we invest, and we look after the community. That helps our cause. We hope that the regional authorities recognise and reward this.”
Jonathan Ralling is one of the five keynote speakers at the International Floriculture Forum that will take place on the 6th of November in the auditorium of Expo Haarlemmermeer (venue of IFTF) in Vijfhuizen, the Netherlands. Ralling is looking forward to exchanging information with the audience. “It’s great to have a forum where exporting producers can share their experiences and ideas about the international floricultural trade and get feedback from others in the field.
Registration for the Forum is still open and free of charge. But due to limited capacity and high-level of interest from the international flower industry, it will be open to qualified participants only and subject to admittance confirmation.
Register here: www.floriforum.com
About Jonathan Ralling and Flamingo Horticulture
Jonathan Ralling is the international commercial director for Flamingo Horticulture. Ralling is responsible for the commercial activities of the Kenyan and South African businesses for the Flamingo Group, having spent the last two and a half years based in Kenya.
During his time with the Flamingo Kenya business Ralling has worked on a wide range of initiatives from market development through to operational strategy, logistics and policy. Having spent 20 years in the Horticulture sector his real passion is developing customer solutions that enable growth while supporting key strategic pillars of sustainability, supply chain efficiency, and innovation.
Flamingo Horticulture Ltd is a market-leading vertically integrated Horticulture business that covers the farming, production, sales and marketing of flowers and fresh produce. Flamingo Horticulture Ltd is active in the growing, processing, marketing and distribution of sustainably produced roses and other cut flowers and premium and prepared vegetables and fresh herbs.
The Group is a core supplier to most of the leading UK multiple retailers, as well as internationally to customers in Europe, South Africa, the Middle East, Japan and Australia, and is one of the world’s largest producers and packers of Fairtrade roses and lilies.
Flamingo Horticulture Ltd.’s supply chain model is balanced between its own large-scale professional farms operating in Kenya and South Africa, combined with long-term sourcing partnerships with a global network of vertically integrated third party suppliers and out growers to offer customers the highest quality product range and consistent year-round supply.