Karuturi
Global
Limited
Company Profile and History
Karuturi Global Limited is the world’s largest producer and exporter of cut roses with operations spread across Ethiopia, Kenya and India. Incorporated in 1994, its farmlands, spread over an area of 250 hectares under Greenhouse cultivation, produce about 500 million rose stems annually. Having established a strong presence in floriculture, the company is now in the process of broad-basing its portfolio to become an integrated agri‐products company with a global presence. The company acquired large tracts of land in Ethiopia to cultivate and export agricultural products such as cereals, cash crops and fresh vegetables.
Karuturi started business in Ethiopia in 2004 through its 100 percent subsidiary, Ethiopian Meadows Plc. Karuturi has two production farms in Addis Ababa: 100 ha of land in Holeta (40 km from Addis Ababa, the capital city), where the net cultivable area is 60 ha; and 385 ha of land in Wolisso (90 km from Addis Ababa), where the net cultivable area is 200 ha. The entire production is under greenhouses. The company started exporting cut flowers from Ethiopia to the Middle East, Holland and Russia in 2006. While the existing 100 hectares of land in Ethiopia became fully operational in FY09, of the additional 385 hectares acquired for roses, 25 hectares will become operational in FY09 and the rest in FY 10-11.
The Company also has palm tree, sugarcane and rice farms in Etang, Gambella State and corn and vegetable farms in Bako, Oromia State.
In Country Location
Ethiopian Meadows Plc: Kebele 03/05, House No.2112, Addis Ababa, Ethiopia: Tel: +251-116632437 / 38 / 39
Holleta Unit: Sadamo Kebele, Wolmera Woreda, West Shoa Zone, Oromia Regional State; Tel: +251-0112372500 / 01 / 09
Wolesso Unit: Maro Bariyo & Haile Mariam Kebele, Woliso District, Shouth west Shoa zone; Tel: +251-0113305754 / 55 / 56
Services and Products
Floriculture in Ethiopia and the start-up of cereals, sugarcane, palm oil and fresh‐cut vegetables production in the country
Number of Employees
3,000 employees in Ethiopia
Financial Information
Company Statistics
The
consolidated
financial
statements
relate
to
Karuturi
Global
Ltd
and
its
wholly
owned
subsidiary
companies,
Ethiopian
Meadows
Limited,
Flower
Express
FZE
and
Karuturi
Telecom
Private
Limited.
The
consolidated
financial
statements
have
been
prepared
on
the
following
basis:
a)
The
financial
statements
of
the
Company
and
its
subsidiary
companies
are
combined
on
a
line-by-line
basis
by
adding
together
the
book
values
of
like
items
of
assets,
liabilities,
income
and
expenses,
after
fully
eliminating
intra-group
balances
and
intra-group
transactions
resulting
in
unrealized
profits
or
losses
in
accordance
with
Accounting
Standard
(AS)
21
-“Consolidated
Financial
Statements”
issued
by
the
Institute
of
Chartered
Accountants
of
India;
b)
In
case
of
foreign
subsidiary,
being
non-integral
foreign
operations,
revenue
items
are
consolidated
at
the
average
rate
prevailing
during
the
year.
All
assets
and
liabilities
are
converted
at
rates
prevailing
at
the
end
of
the
year.
Any
exchange
difference
arising
on
consolidation
is
recognized
in
the
foreign
exchange
fluctuation
reserve;
c)
The
difference
between
the
cost
of
investment
in
the
subsidiaries,
over
the
net
assets
at
the
time
of
acquisition
of
subsidiaries
is
recognized
in
the
financial
statements
as
Goodwill
or
Capital
Reserve
as
the
case
may
be;
d)
As
far
as
possible,
the
consolidated
financial
statements
are
prepared
using
uniform
accounting
policies
for
like
transactions
and
other
events
in
similar
circumstances
and
are
presented
in
the
same
manner
as
the
Company’s
separate
financial
statements.
Break-up of Revenues and Profitability
Production base of Karuturi
The Dubai-based Karuturi Overseas Ltd (KOL) consolidates KGL’s operations in Ethiopia. The total acreage under rose cultivation in Ethiopia is 70 hectares with stem production of around 92 million. In 2007-08, KOL reported a net profit of Rs. 0.41 billion on a turnover of Rs. 1.07 billion.
Market Share
Ethiopian Meadows Plc is the largest floriculture operation in Ethiopia. After acquiring Ethiopia’s Sher Agencies in 2007, Sher Karuturi became the largest rose producer in the world.
Business Objective
“Management is focused on growing Karuturi into an integrated Global Player in agriculture and therefore increasingly focuses on vast agricultural opportunities in Africa especially, Ethiopia”
Business Model
“An integrated production model encompassing in-house plantation, cultivation and distribution capabilities coupled with a series of green initiatives make us one of the lowest cost producer of cut roses in the world. Almost our entire produce is exported to high-value markets such as Holland, Germany, United Kingdom, Italy, Singapore, Hong Kong, Taiwan, Bahrain, Muscat, Dubai, Australia, Japan, New Zealand, Brunei and North America, with a small portion sold in India.
Our key management strategies are built around synergistic forays, expansion into low-cost production bases and integrating the value chain to emerge as a leading agri-products company in the global market. We believe in our potential to serve the ever-rising demand for agri-products in different markets. Over the years, we have been able to identify and procure resources such as land and labour at relatively economic prices, and thus increase shareholder value.
We
have
an
enviable
track
record
of
consistent
growth
and
profits,
and
delivering
value
to
all
our
stakeholders,
especially
our
investors.
Our
consistent
performance
has
been
enabled
through
strategic
acquisitions
globally
and
healthy
organic
growth.
We
firmly
believe
in
value
creation
and
maximising
shareholder’s
wealth
Our
company
is
looking
at
evolving
into
an
end-to-end
agri-focused
company.
To
meet
that
end,
our
company
is
moving
towards
aggressive
expansion
of
our
floriculture,
horticulture
and
agriculture
portfolio
in
terms
of
its
own
production
&processing
facilities.
Simultaneously,
our
company
is
looking
at
going
directly
to
the
market
for
its
products
through
its
own
distribution
network.
Moving
ahead,
in
order
to
fund
its
strong
growth,
our
company
plans
to
raise
up
to
US$
100
million
from
investors.
The
raised
capital
will
be
used
mainly
to
fund
our
company's
floriculture
growth
plans
in
Africa
and
agricultural
operations
in
Ethiopia
The
thrust
will
be
on
expansion
of
the
agriculture
business.”
Ownership of Business
Benefits Offered and Relations with Government
The Ethiopian government, pursuant to its objective of encouraging private and foreign participation in capital inflows and technology, has put in place favourable policies for floriculture, horticulture and agriculture development: generous financial support to the floriculture industry; 100 percent exemption from the payment of import and customs duties and other taxes levied on all investments in capital goods, such as plant, machinery, equipment, etc; exports of Ethiopian products and services are exempt from payment of all export taxes; income from an approved new manufacturing and agro-industry investment or investment made in agriculture is exempt from income tax for about five years depending upon the area of investment, volume of export, and location of investment; roses imported from Ethiopia into the European Union are exempt from taxes levied on imports; the Investment Proclamation allows foreign investors liberal terms to remit profits and dividends, principal and interest on foreign loans, and fees related to technology transfer; and foreign investors are also allowed to remit proceeds from the sale of liquidation of assets, transfer of shares or partial ownership of an enterprise, and funds required for debt service or other international payments.
Product Development
In 2009 Karuturi commenced operations on 11,700 hectares of land in Bako, Ethiopia to cultivate maize, rice and vegetables. It plans to bring 750,000 acres of land in Ethiopia under cultivation by 2014-15. Also in 2009 it acquired 300,000 hectares in Gambela, Ethiopia for agriculture expansion.