Emmy Nyirigira, the Chief Executive Officer (CEO) of Bella Flowers
Rwanda’s leading flower producer, Bella Flowers has been advised to focus on producing fresh flowers and alternatively, plastic flowers for the local market to cut down on its losses.
Bella Flower is a government strategic investment project and is under the National Agricultural Export Development Board (NAEB) with an aim to boost the floriculture industry.
The project, registered in 2014, started with funding of Rwf2.2 billion (in phases) and later got a Rwanda Development Bank (BRD) loan worth Rwf4.3 billion to put the irrigation systems and equipment among others.
The company started production of cut roses in July 2016 on 6 hectares and the Auditor General’s report of 2022 shows that Bella Flowers Ltd had been making losses since it started operations.
For instance, 6 months to 30 June 2021 the company made sales of Rwf3,662,806 and incurred a cost of sales of Rwf3,014,988 (an 18% gross profit margin ratio); and 6 months to 30 June 2022, Bella flowers sold Rwf2,188,571 but incurred costs of sales of Rwf2,963,235-( a 35% gross profit margin ratio).
A Parliament Accounts Committee (PAC) hearing on September 9, 2023 showed that the losses had accumulated to Rwf6,284,829,000 as at 30 June 2022 from Rwf1 billion in the previous year.
“Based on the above gross margin rate, it is obvious that Bella Flowers Ltd cannot meet both operating and administrative expenses. Consequently, the company may not generate a return to the shareholder if no urgent action is taken,”The AG report stated.
During the hearing, Emmy Nyirigira, the Chief Executive Officer (CEO) of Bella Flowers said the initial investment focused on infrastructure and now they are in the production expansion phase which now produces 200,000-300,000 flowers weekly on 20 hectares.
Infrastructure set up include greenhouses covering 20 hectares under production, a large capacity packhouse with two cold rooms, a ferti-gation unit powered by Galcon water management system managing the feeding of plants, fully equipped workshop, water reservoir with water pumped from nearby lake Muhazi, and staff houses.
Nyirigira said that they are devising a strategic plan to increase consumption of flowers and need advice to strive to survive since the business has potential to bring in forex earnings.
“We had 3 million flowers produced but no market and the local market was not ready to buy flowers. This means the loss was accumulative,” Nyirigira explained.
He said that they had only one client in Holland and have been working on increasing production but there has been no market at times.
“We are now banking on the national airline (Rwandair) daily flights to expand the market but also cut on costs of exporting to the European market and start making profits,” he added.
The CEO said that negotiating with Rwandair would reduce the costs of operations and with the airline’s connection through the Doha route, they would help reach Asian markets, for example in Japan and Indonesia.
Bella Flowers worker on duty
On the losses, Nyirigira said it was due to unstable flower bucket market prices (between 1 dollar and 3 dollars), not getting the exact produce projected; post-harvest handling challenges and impact of COVID-19.
The Deputy AG, Patrick Habimana said that in terms of business analysis, the OAG said this was loss making and needed a new model.
“The expansion has no problem but we cannot expand without strengthening the phases. We found that there is no assessment of the phase, for example in production, thus the losses and this leaves us with doubts,” Habimana said.
PAC Chairman MP Valens Muhakwa said Bella flowers must get a way forward and a new road map plan.
Nyirigira revealed that they are looking for a private investor to sign a public-private partnership (PPP) agreement to advance the project operations.
MP Germaine Mukabalisa suggested the company to think of producing plastic flowers which are commonly used in weddings and decorations.
However, MP Anita Mutesi suggested Bella flowers to come up with a local market consumption and marketing strategy as alternative for the international one.
“This means Rwandans don’t know the product, but it would be better to market it locally for Rwandans to consume the product,” Mutesi said.
MP Jean d’Arc Uwimanimpaye stated that the real problem here is making the right quality and assurance to sell flowers to either market.
