Karuturi to outsource Ethiopian land to Indian farmers

Karuturi to outsource Ethiopian land
to Indian farmers

12 October, 2011 | Raghuvir Badrinath
---------------------------------------------------------------------------------

Karuturi Global, the city-based publicly-

held floriculture major and one of the

world’s largest exporter of roses which is

aggressively rolling out an agriculture

business venture in Ethiopia, is looking at

outsourcing 20,000 hectares of farm land

in the African nation to Indian farmers on

a revenue-sharing basis.

The company has leased 300,000 hectares in Gambela, in the
western corner of Ethiopia. It has been looking to develop a
bouquet of crops such as paddy, maize, cereals, palm oil, and
sugarcane, among others, to cater to the huge demand in Africa and
also look at the export market. According to senior officials of
Karuturi, they have taken possession of 100,000 hectares, and after
the completion of this, they will be able to take possession of
another 200,000 hectares.

“We have got a decent response.

We intend to give land and the

necessary infrastructure to farmers

who have the expertise in specific

crop cultivation and get into a

revenue share (65:35) with them.

We hope to have agreements

reached for around 20,000

hectares in the near future as part of the first phase,” a senior
company official told Business Standard.

The first phase will be over by the end of this financial year. As part
of its expansion plans in this sector, Karuturi had earlier this year
held discussions with farmers from Punjab interested in this venture.

For the second phase, Karuturi is understood to have initiated
discussions with some farmers in South India and a few agri-
commodity majors. It hopes to outsource as much as 50,000
hectares over a period of time.

Karuturi Global, which reported a topline of close to Rs 700 crore
during last financial year, derives as much as 90 per cent of its
revenues from the floriculture business. The company hopes to get
35 per cent of its revenues from the agriculture business in the next
couple of years.

The company had recently taken a hit of around $15 million after
flash floods in Ethiopia destroyed maize crop sown over 12,000
hectares. To prevent such setback, Karuturi has hired WAPCOS
limited, a public sector enterprise, to provide consultancy services
for undertaking flood control measures besides designing irrigation
and drainage systems.

WaterWatch, a Dutch advisory firm, has also been in engaged in
authenticating the irrigation, drainage and flood control work of
Karuturi.

Courtesy

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