Panalpina expands into perishables with Airflo acquisition

With its eye on expansion in the perishables market, freight forwarder Panalpina has acquired a majority stake in Airflo, a company based in Kenya and the Netherlands, which specializes in the export and handling of fresh flowers and vegetables.

Airflo is Kenya’s second-largest airfreight forwarder and part of the Dutch Flower Group (DFG). The company employs a total of 167 staff in Nairobi and in Aalsmeer, a Dutch town in the heart of tulip country. Airflo organizes up to 1,500 temperature-controlled shipments per week from Kenya, for a total of more than 40,000 tonnes per year of fresh-cut flowers, especially roses.

Panalpina established operations in Kenya at the beginning of the year. Fresh-cut flowers accounted for more than 60 percent of Kenya’s total airfreight exports in 2014. Dutch Flower Group consists of 30 companies, which generated total revenues of US$1.4 billion in 2014. Marco van Zijverden, the CEO of DFG, said Airflo is the only DFG member involved in the transport and logistics of perishables, and that it would benefit from Panalpina’s global expertise.

Once goods have been delivered to Airflo’s Nairobi warehouse by growers, the commodities are palletized and made ready for transport to the ground-handling agent at Jomo Kenyatta International Airport. The entire process is completed in a temperature-controlled environment, which includes a vacuum cooler to chill fresh-cut flowers down to 39°F in minutes. Airflo coordinates its shipments with airlines and takes care of customs clearance at Amsterdam-Schiphol Airport.

Colin Wells, the global head of specialty vertical perishables at Panalpina, said Kenya’s flower business is “literally flourishing,” with expected annual export growth to be around 5 percent. While the flower business is seasonal, it makes up a considerable percentage of freight moving north to Europe, which is counterbalanced by the flow of dry goods flowing south to Kenya.

DFG and Panalpina did not disclose any financial details regarding the transaction.