Entrepreneurship Zone: 19 April 2022 :: Exporting chillies from Rwanda: How this entrepreneur built her business

Tue Apr 19 09:01:38 CAT 2022

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Entrepreneurship Zone: 19 April 2022 :: Exporting chillies from Rwanda: How this entrepreneur built her business

Afri Foods, a horticultural company in Rwanda, was started in 2019 by Sakina Usengimana. It exports crops such as chilli, avocado, eggplant and passion fruit to Germany, the Netherlands, France, the UK, Belgium and Dubai. How we made it in Africa spoke to Usengimana about how she started and grew the company.

Inspiration is not always enough

In 2017, Sakina Usengimana worked in Rwanda’s hospitality industry when she attended a Youth Connekt UNDP seminar where a speaker delivered a message she would never forget.

“You have land, yet you are hungry. Those are the exact words he used to talk about the African continent. Hearing that, I was determined to do something to bring about change. That is when I began farming with fruits and vegetables.”

Her first crops were bell peppers and tomatoes, but neither proved a success. “I did not have the skills,” she admits. Knowing her shortcomings, Usengimana quit agriculture to continue her studies. She was planning on returning to her corporate job once done, but something convinced her to try agriculture again.

This time she brought in two partners and together they procured land to cultivate chillies. Unfortunately, the second attempt also failed. According to Usengimana, contributing factors were not having a professional agronomist on board and the distance of the farmland from Kigali where she and her partners lived. After three harvests, they called it quits.

Third time lucky

The failed attempts taught Usengimana valuable lessons. Firstly, she realised she needed the right skills, whether developing them in herself or appointing someone as part of the team. Secondly, picking the right crop was imperative. Thirdly, she believes it is important to line up the client first and then secure supply.

Afri Foods employees preparing crops for export.

In 2019, she asked the chairman of the Rwanda Horticulture Exporters Association to link her with a client for chilli. He connected her with an importer from the Netherlands. Usengimana established Afri Foods, found chilli farmers to supply the contract and sent the shipment abroad.

“I was just coming out of the experience of having invested with partners without success. I did not have any money left to make mistakes,” she says of her decision to buy the chilli from other farmers rather than cultivating it herself. “I wanted to understand the trading side first.”

With one client in the bag, Usengimana was sponsored a ticket by the National Agricultural Export Development Board (NAEB) to attend the Fruit Logistica fresh produce show in Germany in February 2020. She had unflinching faith that she only needed face-to-face access to clients to secure more business. At the end of that trip, she had three additional clients and this list has increased ever since.

Afri Foods sources many of its crops from smallholder farmers.

The need for own production

To assist the smallholder farmers and co-operatives from where it sourced its crops with their product quality, Afri Foods established demonstration farms in the Gatsibo district, eastern Rwanda, as well as Nyanza in the south. With the additional clients and the increased demand, the company opted to strengthen its supply chain and boost its own production from these farms.

Today, Afri Foods contributes around 30% of all the chilli required for export clients from its own farms. It also grows eggplant.

Diversification opportunities

Usengimana is always looking at potential new crops that the company could provide.

The short growth cycle of some crops makes it feasible to take an order upfront and only then find or establish supply. For example, French beans take 45 days from planting to harvest. For chillies, the timeline is 45 days in the nursery and another two months to the first harvest. This quick turnaround, along with using air freight rather than containers shipped by sea, makes it possible to benefit from short-term seasonal European demand, especially in their winters.

“In summer, we cannot compete but during those periods, we could look at diversifying into different products such as passion fruit.”

Adding clients

Networks and face-to-face meetings are critical to building a healthy client base. Attending exhibitions also works well, Usengimana says.

When she cannot be somewhere in person, Usengimana uses her networks. She has cultivated good relationships with Rwandan embassy personnel in countries with prospective clients. “These days if I have a possible client in Dubai, I ask the embassy in the UAE to send someone to conduct a visit. In the past, we did not think about that.”

Packed crops ready for export.

Having an embassy escort when she meets clients establishes some credibility. “This is how we got a contract to supply Carrefour.”

The company now has two clients in Germany, the same client in the Netherlands that was the first on board, two in the UK, retailer Carrefour in Dubai and another in France. These have been added steadily over the last two years, despite the impact of Covid-19 and the pandemic.

“We export avocado, chillies (bird’s eye chilli and habanero varieties), passion fruit and eggplant,” reveals Usengimana. “We are now also doing matoke, a starchy banana cultivar popular with the diaspora, and, in the near future, we will try French beans.”

Using middlemen in the export markets

Altogether, 80% of Afri Foods’ exports are to traders who supply retail stores. One reason is that the company still requires certifications to supply direct to the end client.

Another important reason is the payment terms offered by bigger retailers and the pressure it places on the working capital of Afri Foods. The company can’t cope with payments from clients only 45 to 60 days after delivery. “Working with traders allows us to grow slowly and master the market, while getting paid within a matter of days, rather than weeks,” she explains.

Growth opportunities

For Usengimana, there is growth in every direction of the value chain. “Agriculture will always be important. It will only stop trending when people stop eating.”

She is excited about the possibilities that new technology brings; the right tech can reduce human error and make farming more efficient. She is also keeping her finger on the pulse of new developments such as hydroponics and what this could mean for Afri Foods, considering how climate change is exacerbating the already volatile impact of the weather on operations.

The company is considering moving into processing for some of the crops it currently sells, but it will take time to understand the market and determine the best products.

Identifying the right crops for future investment is also crucial. “You have to find the high cash crops that will increase your competitiveness. Something that is in high demand and carries a premium in terms of price,” Usengimana adds.-Howwemadeitinafrica

Sakina Usengimana, founder of Afri Foods

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DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of Faith Capital (Pvt) Ltd for general information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from sources believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and sourced from third parties.

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