Entrepreneurship Zone: 10 February 2025 : Building an agribusiness venture in Africa: The tough road to success

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Entrepreneurship Zone: 10 February  2025 :  Building an agribusiness
venture in Africa: The tough road to success

 


 

 


 <https://www.firstcapitalbank.co.zw/> 

 


 

 


 

 

 



Teddy Ruge

Interview with Teddy Ruge
FOUNDER and CEO, RAINTREE FARMS

Lives in: Uganda

  _____  

Teddy Ruge, founder and CEO of Raintree Farms, runs a moringa-growing and
processing business in Masindi, Uganda. Moringa, a nutrient-rich superfood,
has global demand – but Ruge’s journey has been anything but smooth,
navigating halted contracts, geopolitical fallout, and other unexpected
challenges. How we made it in Africa editor-in-chief Jaco Maritz spoke to
him about the realities of building a successful agribusiness venture in
Uganda.

Topics discussed during the interview include:

·         Why Ruge saw moringa as a promising agribusiness opportunity

·         The challenges of convincing farmers to grow moringa

·         Securing a $1 million order from the US

·         Navigating setbacks, from export hurdles to funding shortfalls

·         What he would do differently if he were to start the business
again

Watch the full interview below: (only available on howwemadeitinafrica.com)


Interview summary


Teddy Ruge left Uganda at a young age for the US, where he built a career
as a photographer. After many years in the US, he had been looking for a way
to return to Uganda. In the early 2000s, he started travelling back and
forth to his homeland to reconnect with his country.

His first venture in Uganda was Hive Colab, a tech co-working and
incubation hub in the capital Kampala. (Read an earlier article where we
quoted Ruge in his capacity as Hive Colab co-founder – Kenya’s tech
industry: over-hyped or just learning to walk?) However, Ruge was not based
in the country full-time, continuing to split his time between Uganda and
Texas. In 2011, he moved to Washington, DC, to work as a climate
communications consultant for the World Bank. It was through this role that
he became interested in agriculture in Africa.

Entering the moringa business

Ruge wanted to start an agribusiness venture in Uganda. He explored various
crops before settling on moringa, a nutrient-rich plant classified as a
superfood. Nearly every part of the tree – leaves, seeds, bark, and roots –
has nutritional and medicinal uses. Rich in antioxidants and all nine
essential amino acids, moringa is commonly processed into powder for
supplements. It is known to be beneficial for HIV/AIDS patients on
antiretroviral therapy, helping to regulate their health. It also aids
lactation in nursing mothers and boosts infant nutrition.

Beyond its health benefits, moringa appealed to Ruge because of its ease of
cultivation. After about three months, the leaves can be harvested to make
moringa powder, while its seeds – used to produce oil – are ready within
nine to 12 months. Processing moringa is also relatively simple. At the
time, the global moringa market was valued at around $7.6 billion, and
Uganda’s climate positioned it well to claim a share of this opportunity.

His plan was to engage smallholder farmers to grow moringa and sell it to
his company, Raintree Farms, for processing into powder. Ruge began working
on the venture around 2012, and in 2015, he left his World Bank job and
officially registered the company.

Overcoming farmers’ scepticism

Convincing small-scale farmers to grow moringa proved challenging. Many had
lost faith in new crops after previous government-backed initiatives – such
as vanilla and aloe vera – failed due to inadequate infrastructure and
market access. Farmers didn’t believe there was a market for moringa.

To gain their trust, Ruge decided to lead by example. Using funds raised
from friends and family, he purchased land, planted moringa, and built basic
processing facilities. The farm served as a model for other farmers. “Any
farmer who wanted to engage with us could come and we teach them how to
plant the crop,” he explains.

Landing a $1 million order

Cultivating moringa was one challenge; getting it certified for export was
another. The organic certification process was rigorous, requiring the
company to establish monitoring and record-keeping systems across its farmer
network. It took until 2018 for Raintree to secure certification and become
eligible to export to Western markets.

While working on certification, Raintree was already generating revenue by
selling moringa powder to a local buyer: a Canadian entrepreneur who ran a
nutritional company in Uganda. The business focused on products for HIV/AIDS
patients and nursing mothers.

Later, Raintree caught the attention of Kuli Kuli Foods, a US-based
producer of moringa-based products. Kuli Kuli was expanding rapidly and
needed more suppliers. It offered Raintree a $1.2 million contract to
provide it with moringa. However, under the contract terms, Raintree had to
deliver the order before receiving payment.

While the deal was a game-changer, Raintree lacked the capital to fulfil
such a large order. Ruge approached banks in Kampala, but they either
offered prohibitively high interest rates or lacked a mandate to fund
agricultural projects. His search for financing eventually led him to the
Yield Fund, an agriculture-focused investment fund managed by Pearl Capital
Partners. Yield Fund agreed to provide an equity loan, and by late 2018,
Raintree signed the agreement.

In 2019, Raintree began investing in infrastructure and scaling its supply
chain. By mid-year, it started production on the Kuli Kuli order.



Growing moringa in western Uganda.

Rolling with the punches

Just as things were falling into place, trouble struck. Towards the end of
2019, Kuli Kuli informed Raintree that it was halting all supplier
deliveries. The company had overestimated demand and needed to clear its
stockpile before accepting more shipments. By then, Raintree had already
shipped a container to California. Kuli Kuli accepted the shipment but
instructed Raintree to pause further exports.

“That was the first major hit to us,” Ruge says, adding that the company
had focused all its operations on delivering this one order.

Then came Covid-19. Uganda went into lockdown, halting production and
exports. “We didn’t have a customer. We couldn’t produce. The local economy
was on lockdown. We had inventory in the warehouse [that] we couldn’t move,
we couldn’t export for most of the year,” Ruge explains the dire position
the company found itself in.

Despite the pause in operations, farmers in Raintree’s network still
expected payment. “We had to send out a letter of suspension to them, tell
them, ‘Due to the ongoing uncertainty, we can’t really engage with you at
this point until we know from the authorities if we can resume production’.”

In 2021, as restrictions eased, Raintree faced another hurdle: renewing its
organic certification, an annual requirement. But pandemic-related
disruptions delayed the certification body’s visit, preventing exports. “We
had inventory but we couldn’t export it because we couldn’t get it
certified. It was a major, major challenge,” Runge notes.

Launching a consumer brand

Amid these struggles, Ruge sought ways to diversify. Around 2020, he began
developing Qwezi Beauty, a range of moringa-based consumer products. His
goal was to move beyond exporting raw moringa and capture more value by
producing finished goods.

“There’s a huge transition globally towards healthier products,” Ruge says.
He notes that moringa’s versatility allows for a wide range of uses,
including animal feed, fertiliser, beauty products, and health supplements.
“So why give the value to external parties when we can actually be the ones
creating that value domestically.”

Raintree used moringa oil to develop a beauty product line and introduced
packaged moringa powder for direct consumer sales. The products performed
well locally, and the brand has since expanded into North America, where it
has a warehouse to distribute Qwezi Beauty products sold through its
website.

Having its own consumer products kept some money flowing into the company
while it waited for Covid restrictions to ease.

Ruge also sees opportunities for Qwezi Beauty within Africa itself,
especially with the African Continental Free Trade Area opening up new
markets. He says the long-term goal is to manufacture high-quality consumer
products for African markets. “The CPG (consumer packaged goods) market is a
multi-billion-dollar opportunity, and we are looking to be a major player on
the continent.”

Qwezi Beauty is now expanding its product range to include moringa-based
soaps, shampoos, conditioners, and face masks. It is also planning to roll
out fortified flour.

Rebuilding the business amid more hurdles

In 2022, Raintree Farms engaged with USAID to rebuild its supply chain and
resume large-scale exports. The application process took time and was
finalised in April 2023. USAID approved a grant to finance Raintree’s Secure
Income Protection (SIP) programme, providing 250 smallholder farmers with a
stable monthly income to cover their operational costs.

“We were excited,” Ruge says. “We’ve got customers again. We’ve got the
supply chain built up again. Things are going good. We’re ready to get
going.” Kuli Kuli resumed orders, and Raintree also secured new buyers in
Germany.

 

But in late 2023, Raintree faced a new crisis when its organic
certification body detected herbicide contamination in the supply chain.
Since organic certification requires crops to be free of herbicides, the
company had to stop exports. After several months of investigation, it
traced the contamination to nearby commercial sugarcane plantations that
used large amounts of herbicides. However, preventing exposure from adjacent
fields proved nearly impossible.

To navigate this, Raintree decided to separate the farmers supplying it
with moringa. Produce from farmers near the sugarcane plantations would be
designated for the local market, where organic certification isn’t required.
Meanwhile, uncontaminated farms would be recertified for export.

Then came another major blow. In January this year, the recently
inaugurated Trump administration announced a winding down of USAID, cutting
off funding for Raintree’s SIP programme. Under the funding model, USAID
covered the monthly direct payments to farmers. The plan was that once
Raintree began selling the moringa produced by these farmers, it would take
over the payments using revenue from exports. But with USAID’s abrupt
cancellation of funding, Raintree was unable to cover those payments, as it
had not yet resumed shipments.

With no immediate solution, Ruge says the company has little choice but to
start over, relying solely on production from its own farm, which means it
will have much less product to sell.

“We will return to working with farmers once we’re fully back on our feet –
a process that could take us about two years, if all goes well,” Ruge notes.

Reflecting on the USAID partnership, he adds: “USAID was bold to fund a new
innovative approach to working with vulnerable farmers and I commend them
for the effort. SIP needed that kind of support to get off the ground.”

‘You’re on your own in agriculture in Africa’

Ruge says that through all this turbulence, he has learned what it takes to
build a stable agribusiness in Africa. The most important requirement, he
notes, is time to overcome the various challenges. “Yes, money makes it
easier but I think patience is really the key to succeeding.”

“You’re building an agriculture entity in Africa. It’s not somewhere like
the United States where you have billions and billions of subsidies going
out into the agriculture sector. You’re on your own in agriculture in
Africa,” Ruge explains. “So all of the problems you think should be solved
by government or government bodies, it’s you to solve them.

 

—Howwemadeitinafrica

 

 


 


 


 

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