Repatriating cutting production to Côte d’Ivoire

“Binjerville, CA’te d’Ivoire – April 16, 2007: A battered Renault sedan speeds along a dirt road in a village near Abidjan. Poverty is high in rural CA’te d’Ivoire.”

The Dutch Enterprise Agency RVO commissioned HortisolHolland to complete a detailed assessment of Côte d’Ivoire’s business opportunities in horticulture. In terms of ornamental horticulture, Ed Malipaard, an industry veteran with an impressive track record in the young plant and retail industry, sees potential first and foremost in bringing young plants back to a country that was once a major plant propagator.

Trade not aid. The study comes at a time when the idea that the best way to promote economic development is through free trade and not by providing direct foreign aid is gaining more ground. Ed Malipaard, living in the wine village of Sancerre, France, embarked on his first mission to Côte d’Ivoire in 2011 to explore opportunities in the young plant and cut foliage industry. “At the time, I acquired a small plant nursery which had been put up for sale because its French owners were fearful  about the outbreak of civil war. Simply put: they were scared after hearing the stories of locals waving around their machetes.”

Ed Malipaard.

Void

Malipaard once worked in garden roses and raspberries in the former Yugoslavia at the time of Milošević. He recalls, “I am not a person who does dangerous things and takes risks, but some situations offer the possibility to buy below market value.”

He decided to take the plunge and bought the somewhat derelict 40 ha farm dotted with a few poly tunnels all in use for the production of cut foliage and ‘a little bit of everything’. “It is worth noting that back in the 1970s, Côte d’Ivoire was a major cutting supplier to European growers with almost all cuttings of the famous Ficus elastica ‘Abidjan’ being sourced from here. But at a certain moment, all that moved to Central America, creating a void for many years.”

Malipaard, brimming with patient good humour, talks in a calm, unhurried tone, as if to make clear that everything comes gradually and at its appointed hour. “It took me several years to get my venture up and running. Diving into the local culture as well as identifying and investigating target markets are essential. How do people think, how do they react and, above all, who are the right people to work with? At the time, political instability had been dragging on for years.”

Buoyant economy

However, things took a turn for the better five to six years ago: the civil war ended in 2011 and the country’s former president was handed over to the International Criminal Court in The Hague and is now in a prison for international detainees in the Netherlands.

Mr. Alassane Ouattara has been in power since November 2010 and was re-elected for a second five-year term in 2015. “US-educated Ouattara has had a long career at the International Monetary Fund (IMF) and is a rather young man who understands the economy, ” says Malipaard.

He underlines that  the world’s largest cocoa producer currently ranks among the most buoyant economies in Africa with economic growth ticking up to 7.6% over year, thanks to expanding agricultural production and coffee exports. “Côte d’Ivoire is a country rich in resources. Think cocoa, coffee and palm oil. Ivorians could easily grow enough food to feed themselves. In spite of its huge agricultural potential, the country is still a net  food importer. Onion imports from the Netherlands amount to 95 million euro per year,  a ridiculous situation. “

Learning curve

Starting plants of Schefflera.

Asked for advice Malipaard would give to horticultural businesses interested in doing business in Côte d Ivoire he says, “The key is to recognise that everyone wants to make you believe he is the boss while others think you are the boss because you’re from Europe.  It’s a learning curve, so don’t be surprised in the beginning you have paid a person who eventually appears not to be the company owner the money was indented for.”

Contrary to Ethiopia foreigners can acquire land but ownership documents are often a catch-22. They usually don’t exist but you need them if transferring ownership.  Moreover, land laws in Côte d’Ivoire owe much to the feudal system. There is no land registry institution and land is owned and ruled by tribal heads and heads of families. These are the people you need to address as they can provide valuable information about the different landowners. Land transactions are defined by verbal agreements. “So you really need to know who you are dealing with. One of the first things I did was demarcate the area I purchased. I hired a surveyor to be certain everyone knew exactly what was owned by whom.  It took me six years to have my property registered and be handed the official ownership documents,” explains Malipaard.

Specialisation

For his business, Ivoire Fleurs, to sustain long-term growth, Malipaard understood that he needed to turn to specialisation, focusing on specific crops. He recalls, “As such, I needed a director and wrote a job description.  The job description mentioned a European candidate, French-speaking with substantial knowledge of both cutting production in Africa and the European market place for ornamentals. That was like searching for a needle in a haystack. Then, the neighbouring company, a French-owned cutting farm was put up for sale as one of its customers, Angers-based floral wholesaler Gardenia, filed for bankruptcy.”

Meanwhile as luck would have it, Malipaard had met a French-speaking Swiss man who owned a 20,000 ha palm oil plantation in Côte d’Ivoire. “Within the legal department of his company was an entire team dedicated to land property issues . They knew all the ins and outs and were are able to open the right doors for me. The plantation owner provided useful information about real estate and brought me into contact with stakeholders and consultants at the highest level. In turn, I raised young, eco-certified Elaeis guineensis palm trees from seed for him. Eventually we agreed to jointly acquire the neighbouring business. Ivoire Fleurs combines now two farms and covers 80ha.”

Ideal spot

Blessed with a sun-drenched climate, having access to water resources and relatively cheap labour, Malipaard says it’s an ideal spot to grow young palm trees and Gardenia cuttings. “In Gardenias, we are one of the biggest cutting suppliers to Europe with over 90% of total cutting production grown in Côte d’Ivoire.”

Ivoire Fleurs sells starting material to renowned Gardenia growers such as plant nursery Van Marrewijk Steelhoven BV from Made and Naaldwijk-based Richplant, both in the Netherlands. “Due to local climate conditions Gardenia don’t flower and stay in a vegetative state which makes the crop ideally suited for cutting production harvested from mother stock plants which are renewed every two years. Actually, what we’ re doing is repatriating cutting production to Côte d’Ivoire.”

Malipaard believes the exercise has every chance to succeed as sourcing cuttings can offer European growers a significant cost reduction of 10 to 20%. “In the ornamentals sector margins are increasingly under pressure so every penny counts. Think of rising air freight costs now that the US has asked its allies to remove Iran’s oil out of the market. Iran is the world’s third largest oil producer and sanctions could push oil prices above $90 a barrel. Off shore cutting production is naturally sensitive to transportation costs and when they double or even triple in price than it gets imperative to look for alternatives. The distance between Abidjan and Amsterdam is much shorter than San Jose or Guatemala City to Amsterdam but sea freight from Côte d’Ivoire also arrives 6 to 7 days earlier.”

Cut flower production

One of the country’s most famous landmarks, Mount Nimba,  rises above its surrounding savannah where the country meets Guinea and Liberia. But most of the terrain is flat. Pondering the potential for cut flower production, Malipaard acknowledges that the Abidjan region is 50 to 60 metres above sea level with little difference between day and night temperatures. This makes the country of utmost interest for the production of tropicals such as Heliconia and cut foliage. To successfully grow cash crops such as cut roses, the country lacks altitude and cooler zones that would give flowers their bold colours and sturdy stems as in Kenya.

“Working with a major wholesaler from the Netherlands Ivoire Fleurs is are currently exploring the large scale production of a wide range of cut foliage. From a logistical point of view the location is well-situated with good connections by air and sea. Malipaard concludes, “Our nurseries are located within a 7-12 km driving distance to Abidjan International airport. The same distances apply to port locations so we are ideally situated at a logistical crossroads. What’s more, the country’s currency, the West African CFA franc, is linked to the euro so when, for example a sea container is shipped from Adidjan to Europe, there is no currency loss. By contrast, when you ship a reefer from Central America to the port of Rotterdam, you have already lost 14 to 15% of your money.”

Gardenia mother stock plants.

Quick facts

The Republic of Ivory Coast

Capital: Yamoussoukro

• Population 23.7 million
• Area 322,462 sq km (124,503 sq miles)
• Major languages French, indigenous languages
• Major religions Islam, Christianity, indigenous beliefs
• Life expectancy 52 years (men), 55 years (women)
• Currency CFA (Communaute Financiere Africaine) franc