Karuturi Global

Karuturi Global Limited
legal form	Limited
founding	1994
Seat	Bangalore , India
management	Sai Ramakrishna Karuturi
sales	3056000000 Rs. (34.9 million euros )
Branch	Flowers
Website	www.karuturi.com
	As of March 31, 2015

The Indian group of companies Karuturi Global is the world's largest producer of cut roses .

The growing areas are in Ethiopia , Kenya and India. The group has hundreds of thousands of hectares , of which nearly 300 hectares are under glass . It produces around 555 million flower stems annually, which are almost exclusively exported to customers in highly developed countries (including the Netherlands, Germany, Great Britain, Italy, Singapore, Hong Kong, Taiwan, Bahrain, Oman, Dubai, Japan, Australia, New Zealand, Brunei, USA, Canada and, to a lesser extent, India).

Business areas

Cut roses

The company, headquartered in Bangalore , India , was founded in 1994 by Sai Ramakrishna Karuturi and initially developed into the country's largest producer of cut roses, but still small by international standards.

In September 2007, one of the three largest cut rose farms in Kenya, Sher Agencies in Naivasha , was taken over by Dutch previous owners (company name since Sher Karuturi ), including the first division football club Sher Agencies FC (since 2008 Sher Karuturi Sports ) and its home stadium. As a result, Karuturi Global grew into the world's largest producer, exporting over a million roses per day at peak times (market share in Europe 9%). Sher Karuturi alone employs over 3,000 people. The first owner of the company had company apartments built (large families often live in a few square meters), their own kindergartens and schools as well as a health station.

2014 liquidity crisis in Kenya

In the past, however, there were several strikes and other protests by Kenyan employees, which were justified by poor working conditions and late wage payments. In 2013, the existence-threatening extent of Karuturi's liquidity problems in Africa became fully apparent. The workers have not received any wages since November 2013. For years there has been a case against Karuturi for tax evasion in the millions (the value of roses exported to Dubai is said to have been given too low to the Kenyan tax authorities). In India, too, the listed Karuturi Group has been penalized several times by the financial market supervisory authority SEBI for violating rules.

The situation escalated when the packaging supplier Allpack Industries, which is part of the IPS group of the Aga Khan Development Network , publicly threatened to close the company because of unpaid bills. As a result, business partners stopped deliveries and services, and electricity and water were also blocked (even for the social facilities and the rose farm's infirmary). The operation therefore practically came to a standstill in the middle of the high season before Valentine's Day . The humanitarian situation of the workers is dire. There are statements from workers on the farm that they have to prostitute themselves in order to be able to feed their family. Children no longer go to school because their parents cannot pay the school fees. The water barrier affects the hygienic situation, the outbreak of epidemics is feared. The farm workers' union suspects that Karuturi managers are secretly transferring remaining capital abroad. In February 2014 Karuturi Kenya was placed under its administration by CfC Stanbic Bank (part of Standard Bank ), which is also a creditor , and the management changed. This procedure was deemed arbitrary by a court order of the High Court of Kenya and was therefore initially suspended. However, after it turned out that the credit agreement expressly provides for the administration of the bank to be taken over by agents of the bank in the event of default, the court overturned the decision. In the meantime, the first interested parties have registered to take over the farm.

Agriculture and food processing

In order to make its business more independent of the previously dominant product cut roses , Karuturi Global has been expanding its activities to the areas of agriculture and food processing since 2008. In India a production of cucumbers for canning was established. In Ethiopia, more than 300,000 hectares of arable land were leased for the production of cereals, palm oil and biofuel in the Gambela region near the border with South Sudan, which the government had offered on extremely favorable terms because Ethiopia was unable to cultivate the land itself. The approach brought the company accused of land grabbing . In the event of successful management, Karuturi predicted the possibility of becoming one of the ten largest food producers in the world within a few years. However, significant problems have arisen along the way. For example, the agricultural machines purchased for cultivation have proven to be inadequate and stand around useless. In the meantime, a cooperation with American agricultural machinery companies is sought, which have more know-how for such large surface cultivation. As Karuturi himself admits, the management made various wrong decisions. And the first maize harvest in 2011 fell victim to an unforeseen heavy flood, despite previous investments in dam construction. Development aid banks refused to provide funding due to criticism of Karuturi. In the spring of 2013, however, the company announced that an undisclosed sovereign wealth fund had committed a loan of over $ 100 million.

Information technology

Another new business area of the group is information technology . In 2007, the Indian Internet service provider Estel Communications was taken over (since then Karuturi Telecom); in April 2013, however, Karuturi withdrew from this business area. An online auction platform for roses was also set up.