A sustainable trade route for Kenya - Unlocking opportunities for greener growth through sea freight
Over 145 participants working in the Kenyan agriculture and logistics industry jointly discussed the way forward and opportunities to develop Kenyan sea freight. The event organized by the Kenyan Flower Council, the High Commission of the United Kingdom and the Netherlands Embassy on the 16th of November 2021 showed that the majority of stakeholders view increasing sea freight essential for the future of Kenya’s exports. As Hon. Betty Maina, Cabinet Secretary of Industrialization, Trade and Enterprise put it: “Shipping is the future, it is the only cost effective and sustainable option”.
Kenya has been a large horticulture producer and exporter for decades, bringing the country significant forex earnings and thousands of jobs. The majority of export comprises of flowers, fruits and vegetables. The Netherlands, being the biggest horticulture trader in the world is a strong trade partner for Kenya. The Netherlands highly values the horticultural trade relationship with Kenya and there are clear opportunities when it comes to increase sea freight for perishables. During the event the Ambassador of the Netherlands in Kenya, H.E. Maarten Brouwer, underlined this by stressing: “That we are in it together, but to make Kenya the perishable hub of East-Africa we do need to start now!”
Potential of sea freight is there
At the moment Kenya is too reliant on airfreight from Jomo Kenyatta Airport. Airfreight is not only becoming more costly, but there is a limited capacity due to COVID-19 and it has a higher CO2 footprint. “The real challenge for us is to unlock business opportunities whilst responding to climate ambitions at the same time”, said Mr. Julius Court, the deputy British High Commissioner. By combining both systems (air & sea), Kenya would be ready for the future, and well-positioned to become the East-African perishable hub. The study on sea-freight for agricultural exports showed that Kenya is lagging behind compared to competitors like Colombia and South Africa. The report identified concrete bottlenecks to be solved, which were presented by Mr. van der Hulst from Flowerwatch. During the event several other bottlenecks were identified by the panelists and participants. However, all stakeholders, including the representatives from the Kenyan Government expressed motivation to start working on tackling these barriers together as soon as possible.
Recent developments
The worldwide horticulture consumer market will double in size towards 2030. The European market (depending on sea-borne imports) will grow from EUR 440 billion to EUR 768 billion per year. This offers real opportunities for Kenya. The Netherlands Ambassador highlighted that he has visited Suswa, Mombasa and the LAPSSET of Lamu himself, seeing the recent investments by Kenya in logistics infrastructures (SGR railway line, new Kipevu container terminal, refurbishment Embakasi ICD, double stack trains Mombasa-Nairobi), which have promising results. The importance of incorporating the supply chain requirements of perishable goods in these new infrastructures became extra clear during the event. Perishable goods have extra demands compared to other ‘dry’ goods, that demand an efficient cold chain. Addressing the lack of electricity on the SGR could be a one of the low hanging fruits, said Jeroen van der Hulst.
Future cooperation Kenya and the Netherlands
When the Netherlands needed to transition into a perishable hub in 2010 significant investments, both in physical and social infrastructure, were made to adapt to the agro-logistics industry. Along the way a lot of lessons were learned on how to drive such a transition process. The Ambassador indicated that we can take these lessons to Kenya. The Netherlands wants to work together with Kenya in a ‘co-creating’ manner, entering into a multi-annual partnership with Kenya, to jointly take all relevant steps in order to realize the required supply chain reconfiguration into a high-performance perishable sea-freight system. The Netherlands Ambassador further expressed that we are willing to bring to the table: “infrastructure best practices, our business network and funding. If this is of interest to Kenya we are looking forward to start the conversation on a roadmap to realize this vision and an effective way of organizing such a transition with public- and private sector involvement”.
In case of any questions on the report, the meeting or otherwise kindly reach out to the agricultural counselor via nai-lnv@minbuza.nl. For the latest updates follow us on twitter @NLAgriKenya or register for our newsletter by sending an email.