Flower Business Supply Chain

In

Bangladesh

TOPIC

Flower Business Supply Chain in Bangladesh

Course name: Supply Chain Management

SEC: A

Submitted To:

Mimnun Sultana

Assistant Professor

United International University

Submitted By:

Md. Soharab Hossain 111093063

Nusrat Jahan 111093020

Sha-alam Sabuj 111093206

Biplob Saha 111093140

Golam Rashed Rayhan 111093029

iii

Letter of Transmittal

January 10, 2014

Mimnun Sultana

Assistant Professor

Department of Business Administration

United International University

Sub: Submission of the term paper.

Dear Mam,

Here is the term paper on the study on “Flower Business Supply Chain in Bangladesh” you asked

us to conduct January 2014.

As you will see, our observations pointed to the overall flower business supply chain, which

have you wanted in this term paper. We are confident that this term paper contains all the

specific requirements. We have done it by giving our best output according to our ability. We

are calling sorry, for any mistake in this term paper.

If you need any assistance in interpreting this term paper, please call on us.

Thanking you for your time and considerations.

Yours sincerely,

Md. Soharab Hossain

On behalf of the group

iv

Acknowledgement

We are member of the group are very please to accomplish the assign task given by our revered

course instructor Mimnun Sultana on the subject of “Flower Business Supply Chain in

Bangladesh”. We are deeply grateful to the almighty ALLAH for his kindness and blessings to us

endeavor and success. We want to express our heartiest appreciation to all flower business

persons for their valuable contribution in completing our term paper. . In preparing this term

paper we had to take assistance, co-operation and help from various parties without which it

would really be difficult in preparing this term paper. But we have been able overcome the

problem with direct and indirect assistance from some persons. In this regard we are extremely

great full to All flower businessmen of Shahbag flower market, Secretary of Shahbag flower

market & Mohammad Billal Hossain – the proprietor of “ , , আই, , ঘর (১)” who are

provided us with all the supportive materials for completing our task properly. . Our special

thanks and gratitude to all the participants, & the group members - Md. Soharab Hossain,

Nusrat Jahan, Sha-alam Sabuj, Biplob Saha and Golam Rashed Rayhan. Whose help & intelligent

guidance assists us for successful completion of the term paper.

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Executive Summary

The main purpose of this study was to provide information on how flower business supply chain

is conducted in Bangladesh. This study was designed to provide information on the current

status and future trends of flower business supply Chain & its good future economic benefits.

We have found various realistic information, problems and prospects of flower business supply

chain through this survey. As we surveyed the market physically it provided huge useful

knowledge to carry out this task properly. We are sure that this extensive study on “Flower

Business Supply Chain in Bangladesh” will focus the future opportunities and development to

become one of the attractive sources of income both in local and international market.

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Literature Review

Flower marketing is marketing activities to create and demand of flower on the market. The

flower is agricultural goods as well as the majority of its production depends on type, so that

the predetermined marketing activities are not always productive develop marketing mix and

improvement of advertising activities is the way to increase profitability in the flower shop.

Marketing its aroma spreading flower far and wide, either in the form of international tulips or

orchids or roses or lilies, national as are available in the market. Flower, marketing and brand

flowers and branded service providers be flower to bloom because of human fascination. The

Internet is helping spread the net far and wide, and is able to bring people closer and gifting

flowers helps people, as an expression of their feelings for each other, easily in different

countries.

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Table of Contents

1. Introduction............................................................................................................................ 1

2. Methodology & Findings....................................................................................................... 2

3. Objective of the Study ........................................................................................................... 3

4. Significance of the Study ....................................................................................................... 3

5. Market Potential .................................................................................................................... 4

5.1. Some Days of Most Frequent Flower Trade .................................................................... 4

5.2. Payment Procedures ......................................................................................................... 5

5.3. Packaged Offers of Flower Business: Permanent Shop ................................................... 5

6. The Bangladesh Market ........................................................................................................ 6

7. Flower Market International Trade in Recent Years ...................................................... 10

8. Supply Chain ........................................................................................................................ 12

9. The Development of the Market with a Value Chain Approach..................................... 15

10. Problems & Prospects...................................................................................................... 18

11. Recommendations ............................................................................................................ 19

12. References & Pictures...................................................................................................... 20

1

1. Introduction

Flower Business / Floristry are the production, commerce and trade in flowers. It encompasses

flower care and handling, floral design or flower arranging, merchandising, and dis play and

flower delivery. Wholesale florists sell bulk flowers and related supplies to professionals in the

trade. Retail florists offer fresh flowers and related products and services to consumers.

Floristry can involve the cultivation of flowers as well as their arrangement, and to the business

of selling them. Much of the raw material supplied for the floristry trade comes from the cut

flower industry. Florist shops, along with online stores are the main flower-only outlets, but

supermarkets, garden supply stores and filling stations also sell flowers.

The growth in the commercial flower production can be traced back to the early 1970s, to

large-scale commercial production in Jhikargacha Shyamnagar Jessore pulses can got started in

the mid-1980s. Later it speeds up largely in Jessore, the large flower-producing belt in

Bangladesh proved as Savar, Chuandanga, Mymensingh and Gazipur. Jessore is currently home

to 70% of the Bangladesh flower production and 4,500 farmers in a small, but dynamic sector

engaged. Belt Bandarban, Chittagong, Cox's Bazar, Rangpur, etc. for increasing flowers

production areas. Khulna, Khagrachori, Rangamati are newly adde areas for flower production.

Model of levels of farms consisted of rudimentary greenhouses and new high-quality products

are produced. As Gerbera Daisies that were delivered earlier by importers. This kind of import

substitution in begins usually in larger and more complex farmers, seep into the knowledge and

skills to do this business, finally up on the smaller and less sophisticated farmers. Have not yet

started to dramatically increase the flower market in the country by 2000 and later with rapid

urbanization and cultural mediation with new festivals like Valentine's day. Traders Kallyan

Bohumukhi Somobay Samity is currently flower according to Secretary Assistant Dhaka

approximately 25000 families flower production under 0.2 million people directly employed

directly or indirectly by this sub-sector topic.

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2. Methodology & Findings

For the study on Flower Market Supply Chain in Bangladesh we, the group members physically

visited Shahbag Flower market & small flower market at Khamar Bari. But our main focus of the

study was on Shahbag flower market. We interviewed different flower businessmen of the

market about detail of flower business and how these flower businesses are conducted.

Some questions those we have asked to businessmen are provided below –

1. What is the condition of flower business because of present political situation?

2. Which flowers are traded more?

3. Who purchases flower more?

4. In which event flower purchases are highest?

5. How much rents have to be given by businessmen to the market authority?

6. What are the prices of different flowers?

7. What are the places from where flowers come?

8. How flowers are carried from the place of production?

9. When the order should be placed?

10. How payments are made?

11. Is there any incidents of fraudulence occur frequently?

12. And many more effective conversations which are available in different part of the term

paper.

Results of these questions are available in every part of the term paper. We also attached some

photographs those we have captured during our visit to the flower market at the last part of

our term paper.

3

3. Objective of the Study

The purpose of the study is that the current situation to find out the perspectives and problems

of flower marketing in Bangladesh. The specific objectives are:

To assess the current flower marketing systems in Bangladesh.

To find potentiality in flower marketing in Bangladesh.

To explore the limitations of flower-marketing.

The most important factor to know flower marketing.

That suggests marketing strategies and recommendations to promote the marketing of

flowers.

4. Significance of the Study

Reasons for the implementation of this research is to find out the attitude and perception of

consumers against flower marketing and what are the related problems and what can make the

flower management to improve and gain or increase market share.

4

5. Market Potential

Today's flower is a global and dynamic industry that has achieved substantial growth rates in

recent decades. Global consumption of cut flowers € 30 to € is estimated at a staggering 40

billion per year in Europe and North America into the world's markets. Since the 1990s, have

production focus shifted from markets in the northern hemisphere to countries where climatic

conditions riper and production and labor costs are lower. As a result, the new centers of

production, usually developing countries such as Colombia, Ecuador, Kenya and Ethiopia .

However, the character of flower production (use of chemicals, water) did the exposed area of

criticism over working conditions and its impact on the environment. In response developed a

wide range of social and environmental standards, both in the result as initiatives in the market

and in the producing countries. Flowers are generally exporters to Europe several certification

systems. Producers in developing countries are still the question, what is the relevance of these

standards for their business.

5.1. Some Days of Most Frequent Flower Trade

Name of the Day Date

Falguni Utshab February 13

Valentine’s Day February 14

International Mother Language Day February 21

Independence Day March 26

Friendship Day 1st Sunday of August

National Mourning Day August 15

Victory Day December 16

Moreover in many other occasions like Marriage ceremonies and Birthday celebrations

people use flowers.

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5.2. Payment Procedures

Flower business transactions are processed in three ways

1) bKash

2) Bank - Wire Transfers

3) Cash Transactions

Wholesalers and retailers pay money in advance before getting their order in most cases.

Although once cash transactions were pretty popular among flower businessmen, but now to

save time and get transactions whenever the need flower businessmen are transacting through

Bank-wire transfer and newly introduced bKash. But we found that information by interviewing

them that most of the flower businessmen are transacting through bKash.

5.3. Packaged Offers of Flower Business: Permanent Shop

Floral design or floral arts is the art of creating flower arrangements in vases, bowls, baskets or

other containers, or making bouquets and compositions from cut flowers, foliages, herbs,

ornamental grasses and other plant materials. There are different packaged program of flower

business is widely available in Bangladesh. When we visited Shahbag flower market we talked

several permanent flower shop owners. For Example we Interviewed “ Mohammad Billal

Hossain “ - Proprietor of “ , , আই, , ঘর (১) ” The picture is given Below -

6

Information those we have collected from this shop about different packaged offers of flower

are –

1) Marriage Ceremony & Gaye Holud

2) Birthday Celebration

3) Seminar Symposiums

4) Home Decoration

5) And many more….

6. The Bangladesh Market

The requirement to satisfy various flowers such as chrysanthemums, tuberose and Gladiolus

from India and orchids, Gerbera, Anthodium was introduced and Thai each year increased from

Thailand. Bangladesh has about TK 2 million flowers and ornamental plants from overseas

imports to spend. Revenue is about 90% of the local flower industry from four varieties of

flowers; Rose, tuberose, marigolds and Gladiolus.

7

According to a recent study by initially increasing the main thrusts for Bangladesh-flower sector

should be the domestic market. As can be seen in the adjacent graphics, increased imports of

cut flowers five times between 2002 and 2007, albeit from a small base. Retailers claim at the

same time as late as in 2006, when the flower industry was virtually non-existent. What seems

to happen on the local market, is that the domestic market share of imports, and the overall

market continues to grow, so that somewhere between 20-30% of the market, especially in the

upper end of the scale the import. Retailers prefer imported due to their fresh flowers (they are

kept in a cold chain) and wide range of products.

As USAID may cost and margin analysis below is, farmers earn strong margins on roses and it's

in the four main varieties, based on their research and a recent market study consistently.

Although other actors in the chain to achieve also comfortable margins, they are weakened due

to losses caused by the lack of a cold chain to flowers. A recent study on the BRAC initiative

shows that the average price for BRAC was marketing, wholesale cum dealers and retailers -

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Tk 12,44, 11.61 and TK 50.28 a hundred flowers. TK 74.33 a hundred flowers accounted for

marketing. The dealer was 67.64% of total costs in the course of the BRAC and distributor of

cum dealer TK. 16.74 and 15.62 or due. NET marketing margin of BRAC, amounted to

wholesaler cum dealers and retailers TK. 187.56, TK. 628.39 and TK. 689.72 to 100 flowers.

Marketing margin of victory was, for retailers as wholesalers cum trader on BRAC. The ROI of

wholesalers cum trader was higher than other retailers. The following table shows the different

levels of the local chain of flowers spread the regular price.

9

The same study compared the return of four major varieties of followers as shown below -

The above table shows that Gerbera has the highest level of return followed by Gerbera and

Rose.

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7. Flower Market International Trade in Recent

Years

Bangladesh also exports flowers in different countries. The supply chain that is used in case of

supply to export is shown below -

Generally in case of local market auction is not much present. Bur in international trade auction

method id used much frequently. Flowers are exported via “ Shahjalal International Airport ”.

Flowers came directly from growers and different agents participate in auction for wholesale &

retail.

Floristry sector is characterized by an increasing degree of internationalization. International

trade is largely organized into regional direction: African and European countries are the main

suppliers to the major European markets; the North American market is supplied by Colombia

and Ecuador; and Japan and Hong Kong source from Asian countries. And the world market is

growing again from his previous low in 2008.

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(In 000’ US$)

In the medium and long term, Bangladesh could become a significant exporter of flowers. As

cut flowers can be seen in the global export profile, Ethiopia the latest East African market

participants to achieve a high growth rate and build a significant industry. With significant

investments in production, cold chain and market developments could Bangladesh aggressively

probably in Middle Eastern and European markets.

In the medium and long term, Bangladesh could be a significant exporter of flowers. As cut

flowers in global export profile, Ethiopia the latest East African market participants to achieve a

high growth rate can be seen and build a significant industry. With significant investments in

production of Bangladesh could aggressively probably in Middle Eastern and European markets

cold chain and market development.

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Through the auction:

Import Division of the auction will receive products and unpacks and prepares the production

to 2/3 of the import agent for the auction or to a wholesale auction: the consultant offer

variety of services, the facilitation of trade between exporters and their customers. Products

delivered by proxy, which prepares the items on auction or a European distributor sold the

products directly. Agents continued a broadcast over several days to ensure a continuous

supply to the auction clock.

Direct to an import wholesaler:

Products are from a wholesaler, which treated (for example by bouquet production) and sold

for domestic and foreign large retailers bought.

Direct to the retailer:

Products are imported directly from a Distributor, in most cases, a large supermarket chain.

Products passing through the auction system for routes 1 and 2. Routes 3, 4 and 5 go to

auctions (often referred to as "direct trade").

8. Supply Chain

We, the team visited Shahbag flower market to know about the actual flower business supply

chain in Bangladesh. We interviewed many sellers and also buyers about how hey deal about it.

We also visited many permanent physical flower stores who buy flowers all the day long from

morning night. But the main flower market of shahbag stats at 4 or 5 am at the dawn & it exists

till the noon. Both wholesale and retail business is available there.

Generally they buy flowers at a low cost band sell them at little profit. Some of the flowers and

their origination and short supply chain are described below –

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Rose: Rose is of various kinds are available in Bangladeshi flower market. Red, Yellow

and white they are primary kinds in terms of colors. Red rose is the most frequently

traded flower in Bangladeshi flower market. In shahbag flower market, Red Rose is of

two kinds – 1) Marinda - Comes from Savar.

2) Lincoln - This type of rose generally comes from Jessore.

Rose is traded more in Valentine’s Day. Per rose is bought at 4 tk & sold at 5-6 tk.

Marigold: Marigold popularly known as “Genda” flower in Bangladesh. This is the flower

which is produced and traded in large quantities in Bangladesh. This flower mostly

comes from Jessore and Chuadanga. Marigold is frequently used in marriage

ceremonies and “Gaye holud” festival. This flower is sold as every 100pcs.

Tuberose: Tube rose popularly known as “Rajanigandha” flower in Bangladesh. This

flower is one of the most frequently traded flowers. It is used mostly in every occasion.

This flower is sold at 2 – 3 tk per stick in retail stores but sold as every 50 or 100 pcs in

wholesale market.

Gladiolus: This is one of the most frequently traded flowers. People use it in many

occasions. Also sold as every 50 or 100 pcs.

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Gypsi: This glower’s production is pretty limited. This flower generally comes from Savar

and Narayangonj. Sold as per bundle.

Pom Pom: This flower looks like marigold, but little smaller than marigold. Generally

comes from Savar. Sold as per bundle.

Kathbelly: This flower is available in less frequent basis. Kathbelly is used generally in

Marriage ceremony occasions. Sold as per chain basis.

There are many other kinds of flowers and decorative leaves such “ Debdaru Pata ” is also

available in Bangladesh. These flowers come from various districts of Bangladesh.

Flower market is gradually getting organized and structured and, in particular, with the

introduction of the contract through specialist members, NGO (BRAC has started contract

farming), to the shortening of the marketing chain, which is the market's efficiency. Find two

general types of chains plays important role at this time, one for the contract-farming-chain and

the other without a contract farming as follows -

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Another in the levels chain of marketing margins are still determined by farmers and traders

enjoyed in the study have received very motivating by USAID that the region is approximately

the same size edges to wholesalers farmers Jessor, compared with the return of vegetables

farmers.

9. The Development of the Market with a Value

Chain Approach

Flower marketing value chain includes various marketing functions such as buying and selling,

transport, communications, storage, packing, sorting, processing, financing, market information

and public relations. Current situation of these features was checked is proposed.

Transport:

The flowers are generally transported in a very traditional and destructive way, both in the local

market, as well as transport to distant markets.

Rickshaw, van, shoulder, night coach & truck was generally used by various intermediaries

important means of transport. Farmers transport most of their products by using the shoulder

to load the rickshaw, van, etc.-through the cycle. TRUCK, bus or buses used for transporting

flowers from outlying regions to Dhaka City. Big bunch of lowers the different types are forced

in the truck and results great post-harvest loss of flowers. Rickshaw van flowers are used to

their stores to bring retailers in the Shahbag area. But at the time of delivery, flowers and

various forms of transportation such as car rental, CNG car, and rickshaw are used.

When the flowers in fiber-board cartons have packed final form for certain flowers can and

could be transported in a truck rack system, could have been achieved significant improvement

in reduction of post-harvest losses.

Packing:

Flower bouquets in urban retail are carried out using a variety of materials such as

polyethylene, ribbons, small bamboo baskets, etc. For high quality flowers like Gerber daisies

dealer in small polyethylene wrap before it finally, markets. At the beginning of old newspaper

used Gerbera farmers for packaging of flowers in a bundle. Now use some of those corrugated

16

fiber board box. The two pieces of old cardboard boxes stuck together with scotch tape and

remove the hinge-like middle of the box and Gerbera flowers 2-3 series. Recently flower

businessmen created another type of bamboo boxes as packaging for Gerbera. How bamboo

slippers are sharp, old news Papers are distributed in areas in order to keep the flowers in the

field. In the past, farmers do not have the plastic bag Gerbera Cup use, to protect the sepals of

Gerbera flowers. Gerbera Cup used Gerbera flower gives a better quality gerberas before the

damage to protect and flower merchants and consumers. Gerbera Cup reduced transport costs

by 50%. Flowers are packed in bundles, and each bundle usually consists of 50 flower sticks.

This bundle is then placed in the bag for transporting, which increases the post-harvest losses.

Corrugated paper-based packaging material suitable for export markets and public-private

partnership can be taken in this regard in the eye.

Recently, SCDC demo training delivered Gerbera farmers on the preparation and using of

Gerbera Cup. Component for the development of the supply chain (SCDC) took initiatives for

the development of corrugated cartons and bamboos in discs cut curve polystyrene protected

by and about the process of demonstration of different flowers

Sorting:

Farmers and traders of Orchid, rose and Gladiolus are generally their flowers on the basis of

size, color, and defective. However, Gerbera and Anthodium are sorted according to size only.

But there flowers no specific placement specifications in the country; therefore, there is no

uniform.

Storage:

The usual practice to allow the flowers to a remote field heat to cool down some time after the

harvest and afterwards they are packed. During packaging sprinkled water in order to maintain

high humidity. The dealer usually use a rough method to the

Processing & distribution:

Currently flowers are not processed, but that has changed in shape, size and form. Retailers

flowers to sort and arrange them in different alternative forms. The flowers are baskets,

17

garlands, etc. mapped according to the order of preference for the buyer, and in the form of

flowers. Tape, Cellophanes, paper, bamboo, and baskets are used as decoration materials.

Dealer:

These businesses play supplement to Dhaka and a valuable role in aggregating, packaging and

transportation of flowers from Jessore. As already mentioned, a man integrate these dealers

occasionally back and forth to increase the margins, but in most cases, the Middle East.

Flower Assembly:

There's an interesting additional work steps for many products sold in Bangladesh flower.

Women are employed, string flowers for decorations or chains in one piece or a day; typically in

Jessore, but occasionally also in Dhaka.

A large gap in the level of processing is a chain that will dramatically improve the durability,

quality and probably the price of flowers. Although a cold chain for the current mode is

probably not justified could manufacture and sale, this type of investment is considered, i n

addition to setting up the same system for vegetables or perhaps piggyback on existing potato

chain.

Marketing information & intelligence:

Most of the dealers got their market information from market visit and interview and other

dealers. Recently, the use of the telephone or mobile phone has increased for farmers and

wholesalers cum merchant level for market information. International holidays can be traced to

export information increase. The following table lists some of the most important days in

connection with flowers in their shops to get. The flowers, which have long stemmed of orchids

and Gladiolus, held usually on a cool place in a bucket of water, and never the sun drenched.

Knowingly selling strictly change water after every 24 hours.

Action:

This seems very negligible compared to role play and serves mainly word of mouth. Still, one

can imagine organized campaign, participation in international trade fairs for export market

development.

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10. Problems & Prospects

Several studies and personal experience shows that the following problems areas in the flower

market, but there are also some perspectives, to solve the problem.

Problems -

Lack of adequate storage facilities both on the field and retail.

Connect lacks sufficient transport facilities from the growing regions with high value

market segments.

Lack of affordable packaging materials

Lack of market and technical Information.

Lack of ability was for the management of post-harvest of flowers.

Insufficient air space and complex customs regulations .

Lack of classification specifications for flowers

Lack of measures relating to various international certification schemes.

Lack of adequate financial instrument.

Prospects -

Development partners has been set up in this area and development assistance will

probably be available

Extent of PPPS can be explored

Both development partners and private operators by this requirement for affordable

packaging materials and SCDC developed some alternatives

DAM has already developed a nationwide agricultural marketing information system

which flowers can integrate

Growing concern about qualification requirements, traders, farmers and other

stakeholders

Addresses public sector now more about classification specifications for agriculture

produces

There is growing concern in the public sector through certification systems

Rural microfinance is available.

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11. Recommendations

Now a day’s flower market is one of the fastest growing sectors of earning huge profit from

inside the country and foreign. There are several problems those are capturing the future of

flower business of Bangladesh such as political unrest. Government should provide extra facility

to those flower business and its all aspects - Transportation & money transfers.

This business should be kept out of these kinds of violations and unrests. For flower business

sector government and some other NGOs should extend more easy loans with lower interest.

Flower businessmen should be very careful in case of payment procedures . Government

should increase their sincerity for export of flowers in different countries as it is contributing

good amount of foreign currencies to its economy.

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12. References & Pictures

1. http://en.wikipedia.org

2. http://wiki.answers.com

3. http://www.wikihow.com

4. And information collected from interviews & surveys.

Pictures

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The End