Entrepreneurship Zone: 20 January 2025 : Malawi: Entrepreneur unlocks agribusiness opportunities
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Entrepreneurship Zone: 20 January 2025 : Malawi: Entrepreneur unlocks
agribusiness opportunities
<https://www.firstcapitalbank.co.zw/>
Victor Chambayika Mhango
Interview with Victor Chambayika Mhango
FOUNDER and CEO, ZIWETO ENTERPRISES
Lives in: Lilongwe, Malawi
_____
The founders of Ziweto Enterprises have capitalised on opportunities in
Malawi’s agriculture industry to build a rapidly growing business. Starting
with a chain of agrovet stores – essentially pharmacies for livestock – the
company has expanded into animal feed production and is now planning to
enter the poultry sector by producing day-old chicks and chicken for both
local and regional markets. In late 2024, Ziweto became the first Malawian
company to list on the Stock Exchange of Mauritius.
How we made it in Africa editor-in-chief Jaco Maritz spoke with Victor
Chambayika Mhango, co-founder and CEO of Ziweto, about the journey of
building the business.
Topics discussed during the interview include:
· Growing from $30,000 in first-year sales to about $1.5 million
today
· The deal that changed Ziweto’s trajectory
· How the company financed its expansion
· Becoming a manufacturer of animal feed
· Untapped business opportunities in Malawi
Watch the full interview below: (only available on howwemadeitinafrica.com)
Interview summary
Before founding Ziweto Enterprises, Victor Chambayika Mhango worked for
several agriculture-focused organisations in Malawi. Through this
experience, he recognised a pressing issue: many small-scale livestock
farmers struggled to access quality animal health and nutrition products.
“People lose livestock [because of] very simple challenges,” Mhango
explains. “For example, access to poultry vaccines, which are quite cheap –
for one dollar, you can … get a vial … [to] vaccinate 100 chickens. But
farmers were struggling to get access to those items.”
This realisation inspired Mhango to establish a chain of agrovet shops –
specialised stores for animal health products – designed to serve
small-scale farmers.
Mhango and his co-founder, Byton Simwela, used proceeds from consultancy
work conducted by Mhango, as well as $5,000 respectively in seed funding
from the Tony Elumelu Foundation and the Flanders Government through the
SEED Africa Awards, to launch Ziweto’s first three stores in Karonga,
Rumphi, and Chitipa in northern Malawi. By the end of its first year, the
company had generated $30,000 in revenue.
A major turning point came when it was accepted into Fledge, a
Seattle-based venture capital fund and business accelerator founded by
American serial entrepreneur Luni Libes. Simwela participated in an
eight-week programme in the US, and Fledge also invested about $20,000 in
the company. Fledge has since consolidated its African agribusiness
investments under a holding company called Africa Eats.
The deal that changed Ziweto’s trajectory
Ziweto sourced the veterinary products for its shops from Alfa Medics, a
company owned by a Tanzanian businessman. Alfa Medics was the sole Malawian
distributor of Kepro, a veterinary products brand from the Netherlands.
Towards the end of 2016, the owner of Alfa Medics, the late Mr Mengi,
informed Mhango that he planned to relocate back to Tanzania and was looking
to sell his business.
“We had lunch together – myself, Byton, and Mr Mengi from
<https://www.howwemadeitinafrica.com/category/countries/tanzania/> Tanzania
– and we heard about his story, how he started the business and how much he
wanted to sell the business for, which was at that time, he said $255,000,”
Mhango recalls. “By that time we barely made about $30,000 … [But] we didn’t
say we don’t have money. We said, ‘Okay, we have heard your offer … And
we’re very much interested in taking up your business, but we’ll come back
to you.’”
A Ziweto Enterprises store
Mhango and Simwela approached Libes, asking for $255,000 to purchase the
business. However, Libes said that he wasn’t able to provide that level of
funding.
“We didn’t give up,” Mhango explains. Instead, they proposed to Mr Mengi
that they manage his business and pay him back in instalments. But Mengi
insisted on a lump sum payment. He, however, came up with a revised
proposal: An upfront payment of $75,000, with the balance to be paid in
instalments.
They returned to Libes with the updated proposal, and he agreed to provide
$50,000. Mhango raised the remaining $25,000 by using his property to secure
a bank loan. With $75,000 in hand, they finalised the deal, and in early
2017, Ziweto became the distributor of Kepro products in Malawi.
Securing the distribution business marked a turning point for Ziweto. It
not only supplied its own agrovet shops but also began distributing to other
customers across Malawi. This expansion drove rapid growth. By the end of
2017, Ziweto’s revenue had soared to over $250,000.
By the close of 2018, Ziweto had grown its agrovet stores to seven and
signed additional distribution agreements with companies such as Interchemie
from the Netherlands and Hester Biosciences from India. That year, Ziweto
recorded sales of over $480,000 and achieved profitability.
Expanding into animal feed
While Ziweto successfully sold veterinary products to small-scale livestock
farmers, it observed a growing demand among its customers for animal feed
and nutrition. In response, it began importing these products.
However, in 2019, the founders launched a fundraising effort to establish a
factory for locally producing animal nutrition supplements and feed. They
secured $450,000 from the Malawi Innovation Challenge Fund, an initiative
managed by the United Nations Development Programme, as well as a loan of
approximately $300,000 from Malawi’s NBM Development Bank.
By 2022, Ziweto had completed the project and begun production of animal
feed. Currently, the company focuses on feed for poultry and pigs, which is
distributed across all its 21 shops.
New horizons in poultry production
By the end of 2023, Ziweto’s annual revenue had grown to $1.3 million, with
projections for 2024 reaching approximately $1.5 million.
In late 2024, the company became the first Malawian company to go public on
the Stock Exchange of Mauritius. The listing raised $568,000, part of which
has been allocated for constructing a hatchery for day-old chicks. This move
positions Ziweto to deepen its presence in the poultry value chain,
complementing its veterinary product distribution and chicken feed
production.
Mhango notes that urbanisation is driving increased demand for poultry
products in Malawi. However, the country faces a shortage of day-old chicks
for chicken meat and egg production.
Looking ahead, Ziweto plans to venture into commercial poultry production,
including setting up its own processing facilities. Mhango highlights demand
for chicken meat not only within Malawi but also from regional markets. The
company has already received inquiries from countries such as Mozambique,
the Democratic Republic of Congo, and Benin.
Ziweto employees at the company’s animal feed factory.
Untapped business opportunities in Malawi
Malawi is “a virgin country in terms of business,” Mhango explains. “You
can literally start any business here in Malawi. And if you are persistent
enough, if you are able to overcome the many challenges that we have,
eventually you can be able to build a viable business here.”
In the agribusiness space, Mhango sees significant opportunities in food
processing. Despite Malawi growing a variety of crops like soya beans,
maize, and rice, the country imports much of its processed food. “There is a
lot of space for investors to move in and produce products that would be
able to compete with imported products and also be exported to other
countries.”
He also highlights a growing middle class in Malawi, a country with about
22 million people, which “are demanding better-quality, more nutritious
food. So that opens up opportunities in the market.”
This extends to livestock products, where Mhango identifies major gaps. “We
can’t meet the demand for meat and other livestock products, including
dairy, eggs, poultry, beef, pork – all those products are in demand in
Malawi.”
Even within his own industry, there are untapped opportunities. The
veterinary products Ziweto sells are all imported. “If people are ambitious
enough, they can set up factories and start manufacturing vet products,”
Mhango suggests.
He also notes rising demand for irrigation systems. “Because of climate
change, people are looking at alternative ways of being able to produce
crops without relying on rain-fed agriculture.”
However, doing business in Malawi comes with its challenges. Mhango
highlights the high cost of capital, with local banks charging interest
rates of around 30%. Foreign currency shortages have also been a persistent
issue.
Policy inconsistencies from the government further complicate matters.
“Sometimes you’ll find that they are promoting [the] export of produce. The
next day, you wake up, they have banned the export of produce.”
Still, Mhango remains optimistic. “As a businessperson, those are some of
the things that you have to be able to manage and overcome for you to
succeed in a market like this one.”
* —Howwemadeitinafrica
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