Mon, 01/04/2019 - 10:21
Current Issue 70
Oserian Development Co. Ltd
Through an ambitious and transformative diversification drive, Oserian is opening up new opportunities for both its own and other local businesses around Lake Naivasha
Writer: Tom Wadlow
Project Manager: Lewis Bush
Adaptation, innovation and diversification – three simple terms at face value, but traits that many businesses are having to exercise in order to address challenges and ensure a sustainable future.
From global financial crashes and fluctuating commodity prices to new legislation and changing consumer behaviour, organisations across all industries around the world are having to adapt, innovate and diversify in order to survive.
Kenya’s Oserian, one of the world’s leading exporters of fresh cut flowers, is no exception.
“We face head winds at home and abroad,” begins Neil Hellings, the company’s Managing Director. “The imposition of VAT on crop protection in 2018 has created additional financial challenges given the duration before such cash outgoings can be recovered.
“The Kenyan Bureau of Standards’ and other related government handling of the importation of fertiliser and how it is established to be compliant has done substantial damage to our sector – easily resolved issues have taken an unfathomable amount of time and starved the sector of crucial inputs.”
Outside of the country, a slowdown in sales for crucial events like Valentine’s Day has also presented a challenge, but one which Hellings believes can be solved by adherence to the three aforementioned traits.
“Sustainable production techniques and gaining market advantage from them will become ever more important,” he adds, “and those farms that ‘get in early’ and embrace it have a chance to enhance their earnings.”
Hellings and Oserian are no strangers to facing adversity, the company approaching 50 years in existence evidence of its longevity and staying power.
Aware of the company’s esteemed reputation, Hellings decided to join Oserian in 2014 to drive a re-alignment exercise.
“Like many businesses that approach 50 years of existence, Oserian had in some, but not all areas lost its focus,” he recalls.
“That lack of focus becomes a breeding ground for inefficiency and the loss of the ability to act instantly and decisively. Also, possibly for the first time in its illustrious history, Oserian did not have a large-scale strategic challenge that was of its own making.”
This situation soon changed.
In 2015 the company launched a huge diversification strategy, named Oserian Two Lakes, a scheme which continues to blossom to this day.
The groundwork involved consolidating three growing areas (comprising 1,650 acres) into one ringfenced farm, freeing up space to create a new town centred around employment arising from the wide-ranging uses of the company’s geothermal power resource.
Hellings states that a comprehensive masterplan is in place and that certain phases of it are already in motion, including the development of a new business park for local horticultural and agriculture companies.
Named Two Lakes Flower Park, the site now has eight tenants and is able to cater for the full range of needs, from turnkey solutions to basic land rental, the provision of heated greenhouses being a particular draw for clients.
“As the number of businesses operating from Oserian Two Lakes grows, so too will the need for the social infrastructure to support those that work here,” Hellings explains. “This includes residential development, so social and low-cost units all the way to CEO’s residences, medical and educational facilities, sport and recreation centres and the infrastructure around sustainable development.”
Such infrastructure, according to Hellings, entails grey water treatment plants, rainwater harvesting, geothermal and solar power, a possible hydropower via a recovery turbine and a biomass generator.
“Our project has already thrown up some new and challenging scenarios arising from our implementation of a solar-geothermal hybrid mini-grid,” he continues, “but we are not fazed by this and, if commercially viable, we will continue to introduce other renewable sources of energy.
“Maintaining and enhancing this momentum is now front and centre for the coming year. Crucially, we have installed our first one MW solar power station and we are delighted with its power production. We appear to have a solar generation hot spot in addition to being blessed with our geothermal resource.”
Oserian is also blessed with a strong employee base that acts as the driving force for the business, be they permanent or seasonal workers.
CSR programmes are thus of vital importance, ensuring employees from both its own operations and tenant companies (almost all of whom are local) enjoy a comfortable standard of living in numerous ways.
“This is fundamental to our business,” says Hellings. “We are very proud that from the start of this year all our primary school children are now
being fed a breakfast and lunch for free.
“The number of pupils has risen rapidly as parents see the benefit of the scheme and absenteeism is now unheard of. With a higher and more reliable uptake of calories, the children’s capacity for learning is also improving.”
Oserian has also recently upgraded its health centre to a cottage hospital level, now containing maternity and dentistry services for the 11,000-strong community, made up of employees and their dependants.
“We continue to focus upon diversification in our employment practices as well,” continues Hellings. “We now have greenhouses operated entirely by our deaf workers and have fitted additional health and safety safeguards to ensure we are able to communicate in an emergency.
“We do not discriminate on the basis of gender or religion and take no regard to where an individual comes from within Kenya.”
Oserian’s focus on diversification and employee welfare has sown the seeds for a brighter future for the community based around Lake Naivasha.
Looking ahead, Hellings is ardently optimistic about the ongoing development of the company, stating that a key objective for the rest of 2019 is to commence the demanding task of further exploiting its geothermal resource, be it in the form of steam, geothermal fluid or non-compressed gas.
Keeping his cards close to his chest, he also points to new technological breakthroughs in the pipeline ahead.
But what about the future development of Kenya more widely?
Hellings passionately concludes: “For sure there are challenges and frustrations in doing business in Kenya, but having run businesses in both West and East Africa, I can say that Kenya has opportunity the likes of which I have not seen elsewhere on the continent.
“An undisputed pro-business government, a very stable currency, a well-educated, hardworking workforce with excellent command of English and highly developed IT skills, rapidly improving strategic communications and logistics are just some of the reasons why anyone considering investing in Africa should put Kenya at the top of its list.
“Of course, within Kenya, Oserian Two Lakes is the place to head!”