Features

Agri-entrepreneurs grow Africa: Turning local farming into global business

28 September 2011
ITC News

If you pay attention to the news, you’ll hear two stories about African agriculture. The first is of the drought that sears the Horn of Africa and forces tens of thousands of Somalis – now climate refugees – to pack up their belongings and families and trek hundreds of miles to find water, food and makeshift camps.

The second story presents a quieter danger: foreign investors (panicked in the wake of the 2008 food crisis) buying vast tracts of Africa’s prime agricultural land. Journalists call it a ‘global land rush,’ and in Africa’s case, they’re not exaggerating. The World Bank reports that of the 110 million acres of farmland deals announced in 2009, more than 70% of those deals were for African land.

There is, however, a third story about Africa. One that is mostly hidden in the noise of the other two.

It is the story of Africa’s ‘agri-entrepreneurs’ – local businessmen and women who grow, pack and export produce to overseas markets. This is no cottage industry, and one should not underestimate its influence. Governments and development agencies describe agri-entrepreneurs as an ‘engine’ for Africa’s economic growth, and crucial to establishing food security on the continent.

For this article, International Trade Forum interviewed five agri-entrepreneurs. They hail from Mali, Mozambique, Uganda, Kenya and Burkina Faso. The soils of their nations may differ, but their stories contain striking similarities. Each entrepreneur has grown a modest produce business into a global export operation. If there were any such thing as a ‘formula,’ it would be founded on their common obsessions. They share an intense focus on their markets, on deciphering trends, on forging partnerships and networks and on meeting the emerging standards of quality and food security. These small- and medium-sized enterprises (SMEs) represent the new faces of African
innovation.

 

Bousgoum Issaka

Director-General
SN Ranch Koba, Burkina Faso

 
TF:What is your core business?

BI: At SN Ranch Koba we grow, process, package and export fruit and vegetables. These include mangoes, green beans, melons, djakatou, tropical products and oil seeds such as sesame, cashew and beeswax.

TF:How did you get started?

BI: I began in 1996 as a local seller of fruit and vegetables – gradually moving into hotel and restaurant deliveries, followed by wholesale distribution to the capital and minor exports in the sub-region.

TF:What has changed since your business began, and how have you adapted?

BI: We formed a limited liability company (LLC), acquired a packaging plant and scaled our fruit and vegetable production up to industrial levels. Today we export to Europe, the Middle East, North Africa, USA and Asia.

TF:What have been your biggest challenges so far, and what do you anticipate for the future of the agricultural sector?

BI: It’s a challenge to keep up with the international rules of food security, which are fast-moving. Looking to the future as arable land becomes scarce in our region, it’s important that we ensure sustainable farming survives and flourishes in Africa.

TF:If you could pinpoint three keys to your success, what would they be?

BI: (1) Single-minded focus: Our strategy has been to establish a top-class reputation in a relatively narrow band of products rather than accepting mediocrity across a broad range;

(2) Thoroughness and obsession with quality standards: These days, a business needs to stay ahead of international certifications to ensure its products are confidently received in export markets; and

(3) Analysis of trends and market research from around the world: This helps us anticipate and meet consumer demand.

TF:What advice can you offer to other SMEs in the agriculture sector?

BI: The SMEs that succeed in our sector will be the ones that form a deep understanding of their export markets. This means keeping abreast of changing consumption trends, for example the move towards organic products in some segments, and the reality that more consumers wish to know where their food comes from. Traceability and certification standards are of growing importance to agri-entrepreneurs.

 

 

Abigaba Moses Yusuf

Director
Afrimex Foods, Uganda
 


TF:What is your core business?

AY: We export fresh fruit and vegetables to Europe and the United States. These include popular African foods such as karella, okra, hot peppers and matooke.

TF:How did you get started?

AY: I began in 2006 as an export agent, learning export processes, from field preparation to clearing produce. I also focused on raising capital to start my own business.

TF:What has changed since your business began, and how have you adapted?

AY: The major difference is scale. Today, Afrimex Foods exports up to 30 tons per month – to Belgium, the Netherlands, London, USA, France, Germany and Italy. We now have a fully facilitated pack house, refrigerated trucks and cold storage. Our most important adaptation has been in quality standards and professionalism. Today, our entire workforce is trained through Partners in Protection (PIP) in Hazard Analysis and Critical Control Point (HACCP) food safety programmes, integrated pest management, safe use of pesticides and traceability.

TF:What have been your biggest challenges so far, and what do you anticipate for the future of the agricultural sector?

AY: Initially, it was securing dependable markets. The ongoing challenges are rising input costs and climate change, with hot seasons sapping soil moisture. The agricultural sector faces the threat of unsafe pesticides, which have the potential to damage soils or even imperil export deals.

TF:If you could pinpoint three keys to your success, what would they be?

AY:(1) Establishing a Growers’ Scheme that farms the wet areas during the dry season, ensuring a year-round supply;

(2) Partnering with the Uganda Export Promotion Board (UEPB): They helped us secure dependable contracts in Europe and the United States; and

(3) Training to expose our business to the latest market trends: We trained our growers to ensure we produce to export standards with minimum risk levels (MRLs), food safety and traceability.

TF:What advice can you offer to other SMEs in the agriculture sector?

AY: Practise the recommended export standards such as observing MRLs for all products and implementing HACCP. Establish a strong and diversified growers’ scheme to hedge against climate. Finally, support your growers by extending loans and subsidizing inputs. This builds loyalty and reaps greater returns.

 

  

William Zirebwa

Group Compliance Manager
Mozfoods, Mozambique

TF:What is your core business?

WZ: Mozfoods is divided into three business units – fresh produce, rice production and grain seed production. The business unit I will discuss is Companhia do Vanduzi (fresh produce), which exports baby corn, chillies, fine beans and mange-tout peas.

TF: How did you get started?

WZ: We launched Companhia do Vanduzi in 2004, to explore the potential of horticultural production in Manica province.

TF: What has changed since your business began, and how have you adapted?

WZ: We expanded revenue, staff and the scale of production. Our export volumes grew from 2 tons per week to the current average of 30 tons. Our turnover in the last fiscal year was US$ 6 million and our staff numbers increased from 30 to 1,500. We also diversified, moving from sole reliance on the United Kingdom, to forming export partnerships in Europe and South Africa.

TF: What have been your biggest challenges so far, and what do you anticipate for the future of the agricultural sector?

WZ: We face both agricultural and economic challenges. The big one is climate change, and the need to reduce our carbon footprint. Economically, our main challenge is rising input costs, mirrored by static food prices. Looking ahead, we anticipate a perfect storm of population growth, increased pressure on agricultural production and the influence of international supermarkets, which pursue direct partnerships with growers and demand higher standards and certifications from suppliers.

TF: If you could pinpoint three keys to your success, what would they be?

WZ: (1) Relentless focus on quality standards: We attained Global Good Agricultural Practice (GLOBALG.A.P.), Tesco Nurture, M&S Field to Fork, Linking Environment and Farming (LEAF), Fairtrade and British Retail Consortium (BRC) certifications;

(2) Diversification across markets: This allowed us to balance dependence across segments and currencies; and

(3) Engaging smallholder producers: This helps offset shrinking margins, as small-scale farmers come with small-scale overheads.

TF: What advice can you offer to other SMEs in the agriculture sector?

WZ: Create synergies with other exporters in the same line of business. Being part of a collective expands your negotiating power for input prices, product sale prices and group audits. To balance risk, it helps to manage overheads and diversify your grower base into different geographic locations.

 

 

Eunice Mwongera

CEO& Founder
Hillside Green Growers, Kenya
 


TF:What is your core business?

EM: At Hillside Green Growers, we export fresh fruit and vegetables to Europe and the Middle East. We grow snow peas, sugar snaps, French beans, baby corn, avocadoes, passion fruit and mangoes.

TF:How did you get started?

EM: After a nine-year stint at the Ministry of Agriculture, I felt unfulfilled by formal employment and wanted to pursue innovation in business. My ‘aha’ moment came in 1995 when I saw Hillary Clinton speak at the International Women’s Forum in China. She urged women to rise up and lead the next generation. I returned home, resigned, and set out to become an entrepreneur.

TF:What has changed since your business began, and how have you adapted?

EM: Growing an international export business requires one to master processes, strategic planning, quality standards and partnerships. It’s also crucial to explain your vision to staff, inspire them, and train them, to ensure your best employees stay with the business.

TF:What have been your biggest challenges so far, and what do you anticipate for the future of the agricultural sector?

EM: In the early days, we found it difficult to secure loans. We anticipate continuing challenges and uncertainty through the pressures of under-developed infrastructure, disjointed government policies, fluctuating currencies and high borrowing costs.

TF:If you could pinpoint three keys to your success, what would they be?

EM:(1) Fostering a culture of creativity and ingenuity: We continue to invest in world-class training and expose ourselves to the latest ideas within the international community;

(2) Creating an institution as opposed to owning it: To evolve from a start-up into a SME, we institutionalized the business idea and ensured that everyone in our business understood our ambitions; and

(3) Embracing trends: We are relentlessly curious – we attend exhibitions, conferences and experiment with new products and ideas.

TF:What advice can you offer to other SMEs in the agriculture sector?

EM: Successful SMEs contain two contrasting ingredients: watertight systems and a culture of risk and innovation. You need both to survive. I would also emphasize networking. Hillside benefits from a network of partners, including the Fresh Produce Exporters Association of Kenya, the African Women Agribusiness Network and the Kenya Private Sector Alliance.

 

  

Mactar Fofana

CEO
Citrus Fruits and Oil Products of Mali, Mali


TF:What is your core business?

MF: Our main activities are the production, packaging and export of fruit and vegetables – mainly mangoes.

TF: How did you get started?

MF: My company, Citrus Fruits and Oil Products of Mali, is registered in the agro-industrial free zone of Mali. It was founded in 1996 and is based in Sikasso. We export to Europe (France, England, Germany, Holland, Spain), Morocco and the Democratic Republic of Congo (Brazzaville).

TF: What has changed since your business began, and how have you adapted?

MF: Our company has progressed through hard times, especially with regards to logistical challenges. The difficulty of working in Mali – a landlocked nation – is that the transportation of products requires specialist skills and resources, which often come at great expense. We streamlined our business to become more efficient at every point along our production and distribution lines.

TF: What have been your biggest challenges so far, and what do you anticipate for the future of the agricultural sector?

MF: Our greatest challenge has been to control the entire ‘chain’ – covering production, packaging, processing and marketing. To solve this problem we dedicated a project team to the task of integrating these four critical elements.

TF: If you could pinpoint three keys to your success, what would they be?

MF: (1) Our ability to analyze trends and interpret the forces shaping consumer demand;

(2) Training and capacity building: Throughout our history we have continually prioritized and invested in expanding the skill-sets of all employees; and

(3) Experience in the field – particularly our ability to stay nimble and flexible, and to anticipate the changing directions of our markets.

TF: What advice can you offer to other SMEs in the agriculture sector?

MF: The best advice I could offer a budding agri-entrepreneur is to be patient and persevere. Don’t be disheartened if the first few years do not go to plan. Remember that farming businesses have relatively slow change cycles. It takes at least five years to better initiate growth, and that is without even accounting for climate hazards and weather changes.