Olav Boenders, CEO of Wagagai on:
Living wages and creating social impact in Uganda
For this Inside Out interview we talk to Olav Boenders, CEO of Wagagai LTD, a flower cutting company based on the shores of Lake Victoria in Uganda. In a network that is all about the future of food, they may seem the odd one out. Yet, Olav feels there are more than enough reasons to join the network as he sees shared values and visions for the future. Read on to learn more about his story.
Olav, can you share with us what Wagagai is and how your business came into being?
Wagagai is a flower propagation company, producing plant cuttings for breeders and growers in Europe, including two of the world’s largest: Beekenkamp Group in the Netherlands and Selecta One in Germany.
What we have in common with them, is that we are all family-run businesses. I find this important to mention, because we share a long-term vision and the same sense of responsability for the future. It just runs in our DNA.
Wagagai started as a flower farm, founded by the De Witte family, rose growers from the Netherlands. They started producing roses for Wagagai in 1999 and one year later started exporting flower cuttings to Deliflor, the largest chrysanthemum breeder worldwide, also based in the Netherlands. Soon after, they noticed the rose business was unsustainable, and they decided to dedicate themselves entirely to plant cuttings. Apart from Deliflor, Wagagai now exports plant cuttings to various companies worldwide.
Why did you choose to set up your company in Uganda? And how would you characterize the country and its people?
The main reason to start our business in Uganda was its climate to grow roses, as well as a very good investment opportunities. Costs are lower and it is relatively easy to do business there, compared to other countries in East Africa. In our 20 years of doing business in this area, we have found that the moderate climate is perfect for a large variety of flower cuttings. In the day, it never gets too hot and at night, it is a comfortable 16 to 19℃.
If we would have to do it all over, we would definitely choose Uganda again. Doing business here is made easy. Of course, there are rules and regulations in place, but we can comply and it is easy to transfer money in and out of the country. This definitely does not apply to all countries in this region.
The Ugandan people are friendly and willing to learn. They are very good at what they do, if you train them well. We have many Ugandans in key management positions on our farm. This goes well and in the future we hope to have even more of them in strategic positions that expats used to hold before.
Floricultural production in Africa came into being because of climatological advantages and cost reduction. On the other hand, setting up shop in Africa means that your business almost always plays an indispensable role in the local communities due to its size and the services companies offer like education and health care. What is your view on this and how does Wagagai fit in this picture?
Floriculture is a big job creator in Uganda. Also, and especially, for women. 65% of our local staff is female.
When running a business like ours, in a place like Uganda, it is critical to give back to the local community. Even though our business wasn’t profitable for the first 10 years, we did invest in the community right from the start. We saw a need for good health facilities and decided to set up our own. Our health facility is now run by 50 staff members and is open 24/7 to provide health care to our staff members and their families for a highly subsidized rate. Other local community members pay a small fee to receive health care.
The health center has a laboratory, operating theatre, birth center and now also a dental clinic. We also have a nursery where 0 to 2 year olds are taken care of while their parents are at work. We pay about €160.000 per year to maintain and improve the center, and we find it very much worth it.
Apart from the health center, we like to organize many activities for our staff and their children, such as our annual Kids Day and other (sports) activities. We find it important to engage with the local community.
Wagagai is one of the local companies in Uganda that strives to implement the so-called ‘living wage’. What is ‘living wage’ exactly and how will it make a difference in your industry and in Uganda?
Implementing a living wage to all of our staff has been one of my dreams for many years. 650.000 Ugandan Shillings (∼ €175) per month represents a living wage in Uganda and we want all our workers to receive this as a minimum. This implies we need to double the current salaries and that is not something that can be done just like that. It is something we can only reach in close conjunction with other farms. That is why, together with our partner Selecta One, we set up the Cents Project to improve employee wages. We both refrain from adding the certification and marketing costs of Fairtrade poinsettias to the sales price. Instead, the additional income goes directly towards wage increases. This is how we managed to generate €75.000 in 2021. It was directly paid out to our workers and meant that some 1.400 workers received one extra month worth of salary.
Although we wish to pay all of our workers a living wage, we did celebrate this achievement. Paying all of our staff members a living wage would actually mean we would pay them more than, for example, a police officer. We want to do this anyway, because we want to lead by example and make big steps towards actively re-distributing wealth around the world.
Interview continues below the video on living wages.
In developed countries you see that mechanization, robotization and autonomous growth are becoming more important every season. What do you foresee for a country like Uganda, how will your farm look like in 10 years from now?
I don’t see this happening on a broad scale in Uganda. Not yet, at least. We are already using small conveyer belts to become more efficient, because labor costs have become higher because of our wish to increase our salaries. However, I do not see automation happening yet. If salaries continue to rise, maybe it will happen sooner.
Taking into account matters like climate change, increasing transport costs and stronger ‘local for local’ trends, how do you foresee the floricultural industry in Uganda will develop?
Uganda is too hot to grow great quality roses. That’s why I don’t see much future there, as other countries in the region have more suitable climates.
However, I think Uganda still has a great future ahead when it comes to flower cuttings. As long as the climate will stay like this, it will continue to be great. As we are right by a huge lake, we don’t think our climate will change drastically and so we don’t think it will have too much effect on our business. But, you never know what the future holds. The rains have changed and lake levels are going up and down, but this doesn’t have a major effect on our business yet.
Wagagai is one of the few floricultural companies that supports EatThis. why did you decide to join our network?
Great question. Of course, EatThis is not directly linked to flowers, but we have the same vision in common. We share the sense of responsibility in this world. As Western companies, we have a lot of knowledge and we want to make sure to share it and put it into positive action in the world. I believe companies need to be profitable, but I also believe that that wealth should be shared and used in a sustainable way.
We have a strong will to do business differently, and we have already made many changes. For example, we only use very few chemicals in floriculture. We think the food sector and agriculture can learn from this, and we can for sure learn from their sectors. Just like EatThis, we believe that we need to connect to change our future for the better.
We know that, as the Western world, we have created many problems in the world. Wealth is wrongly distributed in the world and we have created this problem ourselves. Now, it is time to step up and take our responsibility and be part of a solution. I am not as naïve anymore as I just to be, as I now know it is difficult, but I am positive. The world is changing so rapidly and there is so much chaos. I hope that in this chaos, new systems can arise. I am reading a fantastic book that is called ‘Embrace the Chaos’, by Jan Rotmans. It is a fantastic work and I have come to believe that we need chaos, as it wakes us up and forces us to adapt. I am hopeful that we can achieve great change.
You can see it happening already, as we’re not the only company doing things differently. However, not every company embraces change from within. That is why we are happy to see European legislation (slowly) being modified, as some
companies need to be held by it in order for them to be part of a positive change.