Entrepreneurship Zone: 04 April 2023 :: Exporting chillies from Rwanda: How this entrepreneur built her business

Tue Apr 4 10:46:11 CAT 2023

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Entrepreneurship Zone: 04 April 2023 ::   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.”

Afri Foods employees preparing crops for export.

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.

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.

Sakina Usengimana, founder of Afri Foods

- Howwemadeitinafrica

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