Panalpina blossoming after buying Airflo

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Flowers and perishables in general are blooming for Panalpina in Kenya and across Africa and it expects this trend to continue over the next five to six years.

Country manager for Kenya, Conrad Archer tells Justin Burns that growth has been considerable since the acquisition of Airflo last year – Kenya’s second largest freight forwarder, which has operations in the Netherlands and specialises in exports of fresh flowers and vegetables.

He notes: “We do expect the positive trend continuing in perishables due to the better professionalism of production of goods across Kenya and Africa.”

Among the strong growth areas for Panalpina are vegetables moved to Europe, which is up 16 per cent. This Archer notes is mainly peas, beans, corn and also avocadoes, which he says are doing well due to problems in the production of them in South America.

Archer also says: “On the flower side what has been happening for a number of years (10-15) is we have been seeing Africa taking on production coming out of South America. Flowers have been the strong growth sector, but it is slowing down as it has reached market demand.”

Another trend in flowers Archer says is China is importing a lot more from Africa and not exporting as much themselves due to changes in the marketplace, while he also notes the Australian market is growing on the import side.

Europe used to be the main importer of flowers from Kenya he says at around 90-95 per cent, but now only represents about 75 per cent of imports, as improving professionalism of flower producers means it is exporting to all corners of the globe and new markets.

Archer says while Kenya is still performing strongly for flowers, nearby Ethiopia, where air cargo is thriving due to Ethiopian Cargo’s expansion, is currently the quickest growing production market in Africa.

He says there has also been a modal shift in a positive way in Africa for some perishables such as pre-ripped mangoes, which are now be shipped by air, but previously could not be due to the high costs.

There is also a growing demand from Europe and other regions for pre-packed fruit salad and fruit. Archer says it is tapping into opportunities with e-commerce an important part of these markets for Panalpina.

Africa as a whole is a continent of opportunity for Panalpina, although due to the constantly changing political landscape it can change quickly and West Africa is proving challenging at the moment.

Head of airfreight for the Middle East, Africa and the Commonwealth of Independent States, Slavey Djahov says the forwarder has been affected by the slowdown in the oil and gas market in Africa, which has affected West African countries (Nigeria etc) especially.

He also observes: “The South African import market has been affected by the currency devaluation and political instability and there have been challenges on the import side.”

But Djahov says Panalpina is targeting other African markets and has started operations in Egypt and Morocco, but has had to “tune down” some of its operations in West Africa.

He says it is making “substantial” investments in Kenya and Africa as a whole to take advantage of opportunities on offer and it is, and will remain a key region for Panalpina so it will carry on investing now and in the future.