Ethiopian Business Review

The Blossoming Bloom Business

Lately, decorating outdoor patios with greenery is becoming a common trend especially in Addis Ababa, a city that is home to almost a million households. As a result, individual property owners and real estate developers as well as hotels and government institutions, are increasingly becoming a customer of nurseries. EBR’s Tiruneh Assefa explores how these factors changed plant and garden businesses, dynamically. 

Founded by 15 individuals in Kirkos District four years ago, Nikat is a nursery that sells flowers, seedlings and seeds. As one of the first companies engaged in the plant business in the city, Nikat has witnessed a considerable rise in its sale lately, primarily due to the growing number of consumers who are looking to do something different with their lawns and gardens.

 “A growing number of people want to create functional outdoor spaces that they can enjoy,” explains Dinka Jemal, one of the founders of Nikat. “We used to sell no more than five plants a week two years ago, but now we sell plants on a daily basis.”

Yidnekachew Admasu, a landscaper who buys plants from nurseries, is well aware about the thriving local garden and nursery businesses that are well-versed at adapting to changing market conditions. “I used to hire a few temporary employees a decade ago to do landscaping installation, which was rare back then. Now I have more than 15 permanent employees,” says Yidnekachew, who used to be a gardener and became a landscaper 12 years ago after opening EEFT Gardening. “This clearly shows the growth in demand.” EEFT Gardening capital currently stood at ETB100,000.

Due to rapid urbanization and lifestyle change, many people, especially in Addis Ababa are opting to decorate their offices, hotels, and living spaces with greenery by buying flowers and plants from nurseries or hiring landscapers. As a result, nurseries are blossoming while their product is multiplying in variety, with around 80 licensed nurseries in Addis as of 2018. 

Plants are available on the market at the cost between ETB10 and ETB10,000 whereas the pots in which the plants are sold range from ETB60-500 for locally produced ones, to ETB450-1,200 for imported ones. Most of the seedlings come from the outskirts of Addis Ababa where there is a favorable environment such as for the cultivation of horticulture products such as flowers and vegetable. Nikat, for instance, buys plant seeds from Bishoftu (Debre Zeit) located 30 kilometers east of the capital and grows them in its outlet until they are ready for sale. 

According to industry players, the majority of households prefer the cheapest plants. “I buy plants from nurseries regularly. But I prefer the cheapest plants because of my income,” Lelise Genene who owns a house with space for a green area told EBR. “Besides my intention to create a green and beautiful environment in my home, a well-maintained house will make my house more valuable in the eyes of people who visit my property.”

The boom in the construction industry, including the rise in residential apartments and houses, has played a major role for the growth in nursery, according to industry players. Yidnekachew’s experiences showcase this. As he has linkages with nurseries across the capital, he has seen a significant rise in number of customer since he has opened a landscaping company more than a decade ago. “Business is booming in recent years due to the construction of many residents and apartment buildings across the city. The number of residents who request for our services was more than doubled over the past two years,” states Yidnekachew, who get at least five customer a month and charge between ETB10,000 and ETB1 million for landscaping services depending on the area and types of the plants. Companies including Yotek Construction and Halem Apartment are amongst his customers.

On the other hand, big customers such as hotels prefer to buy the most expensive plant that has unique features and resistance against bad weather.  Radisson Blue, which is a five starred hotel opened six years ago, is among the hotels that are customers of nurseries and landscaping companies. “Decorating our outdoor patios with greenery is part of our marketing strategy designed to attract customers,” says Micheal Girma, marketing manager of Radisson Blu. “We have both local and imported plants, including some from Ireland. We have a dedicated gardening department.”

This is a story shared by the 164 star-rated hotels operating in Addis Ababa, which have a total of 8,000 rooms and 10,000 beds. The demand for plants is expected to grow as the nation is expecting to have more local and international brand hotels in the near future. 

Besides private service providers such as hotels, government institutions like the Addis Ababa Beautification, Park and Cemetery Development and Administration Agency is also one of the biggest customer of nurseries. “We spend ETB15 million annually to buy plants to decorate 28 parks found in the city, out of which 14 are in a good condition,” says Adebabay Sendek, head of communications at the Agency, which was established in 2010, to develop and sustain green areas, parks, and cemeteries.

Although the business is becoming lucrative business the low awareness of people towards the benefits decorating outdoors with greenery, is a great challenges to the business.

 “Most people and big companies still think spending on green areas is a waste of money,” says Yidnekachew.

On top of the low awareness, Dinka argues lack of attention to the sector by the government is also another challenge to the businesses. “While I own a nursery, I don’t have any land to grow plants. In the past, I requested to lease a plot of repeatedly, but to no avail.”


 

6th Year . July 16 - Aug 15 2018 . No.64

Leave a comment

Make sure you enter the (*) required information where indicated.Basic HTML code is allowed.