Entrepreneurship Zone: 19 September 2023 :: Eight agribusiness opportunities in Nigeria, Zambia and beyond

Tue Sep 19 11:48:30 CAT 2023

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Entrepreneurship Zone:  19 September 2023 ::  Eight agribusiness opportunities in Nigeria, Zambia and beyond

Employees at the factory of Burkina Faso-based fruit and vegetables processor Rose Eclat.

>From the production of niche processed food items in Zambia to providing cold storage facilities for farmers in Nigeria, we highlight eight opportunities in Africa’s agribusiness sector.

1. Untapped processed food potential in Zambia

The local production of processed food items, which Zambia currently imports, offers promising opportunities, says Tue Nyboe Andersen, the managing director of Lusaka-based Kukula Capital. He believes that the real potential is in niche processed food products that face little competition. Zambia’s landlocked status means imported products must be transported over extensive distances, naturally acting as an import barrier. For instance, Meraki, a local company, manufactures cakes and provides them to major retailers such as Shoprite. It has grown rapidly with decent margins because its competition is imported products that are much more expensive.  <https://www.howwemadeitinafrica.com/zambia-investor-highlights-promising-business-opportunities/138041/> 

2. Cold storage solutions in Nigeria

An estimated 40% of food in sub-Saharan Africa spoils before it gets to the consumer, indicating a substantial unfulfilled need for temperature-regulated cold storage facilities and transport services. An example of a Nigerian company that has tapped into this opportunity is ColdHubs, which offers solar-powered walk-in cold storage solutions tailored for farmers, retailers, and wholesalers. Strategically situated at key food production and consumption hubs like markets and farms, these cold rooms operate on a pay-as-you-store subscription model. Farmers are charged a daily flat fee per crate of food stored.  <https://www.howwemadeitinafrica.com/pay-as-you-go-cold-rooms-businessman-wants-to-expand-beyond-nigeria/145059/> 

3. Zimbabwe’s answer to traditional petroleum jelly

Petroleum jelly, distilled from a crude oil by-product, has been a popular skincare item since its patenting by US chemist Robert Chesebrough in 1872. Zimbabwean entrepreneur Gus Le Breton sees an opportunity in the market for a natural alternative. He suggests creating a similar product using oils extracted from the mongongo nut, marula nut, and baobab seed. These oils are natural, locally sourced, and don’t rely on any imported ingredients.  <https://www.howwemadeitinafrica.com/profit-making-idea-a-natural-sustainable-alternative-to-petroleum-jelly/68071/> 

4. Export potential for East African avocados and fresh produce to Europe, Middle East

Charlie Tryon, CEO and co-founder of Maris Africa, perceives opportunities in East Africa to produce crops such as avocados, fresh herbs, and a variety of vegetables, predominantly for export to Europe and the Middle East. “The war in Ukraine has driven energy prices and the cost of inputs much higher resulting in shortages in global supply chains. As a result, we see major disruptions across the food production industry, particularly in places like the Netherlands where food is produced in greenhouses using natural gas for heating. I see a real opportunity for East Africa to take over some of this lost production by the Netherlands, for example. We are quite bullish on the sector as a whole,” he notes.  <https://www.howwemadeitinafrica.com/export-potential-for-east-african-avocados-and-fresh-produce-to-europe-middle-east/153184/> 

5. Tapping into demand for poultry in Angola and Mozambique

“Poultry is a large market and in the context of Africa, chicken is at the top of the list,” says Henri de Villeneuve, founder of SAPA, an investment vehicle that supports the entry of European agribusiness groups into East and Southern African markets. To be successful in poultry, he notes, producers must be integrated and control the value chain, starting with the feed. The cost of the feed often accounts for about 70% of the price of the chicken. He further advises against producing chicken for local consumption near the coast due to potential competition from imports, such as those from Brazil. It’s more strategic to produce inland where transportation costs act as a competitive barrier. An added tip he shares is to be aware of abnormal situations or gaps for increased demand. “In Angola, everyone wants chicken at Christmas. They will charter 747s to import chicken to meet local demand over this period; if you know this and are ready to act, it can be a great investment opportunity,” he says.  <https://www.howwemadeitinafrica.com/agribusiness-prospects-in-east-and-southern-africa-investor-shares-his-insights/101533/> 

6. Opportunities to export food from Burkina Faso

Burkina Faso’s agro-industrial sector is on the rise, as observed by Job Zongo, managing director of investment firm Sinergi Burkina. He points to numerous opportunities in farming and the processing of cereals, including maize, sorghum rice, fonio, and millet. There’s also potential in oleo-proteins like soya beans and sesame, and in fruits, vegetables, and trees such as shea and néré. Beyond primary production, Zongo mentions prospects in support services like transport, storage, and mechanisation.

“Right now, there is a lot of nationalist sentiment, with domestic consumers increasingly wanting to consume locally produced products, meaning that there are many industrial companies trying to transform local produce,” he adds. While some businesses target this domestic market, Zongo says it remains relatively small, which is why Sinergi Burkina predominantly seeks to invest in companies looking to export their products. “The government is providing a lot of support to help companies export, including helping companies attend trade fairs and link with international buyers.”  <https://www.howwemadeitinafrica.com/investing-in-burkina-faso-8x-returns-possible-in-the-agribusiness-sector/146436/> 

7. Repair and upkeep solutions for Nigeria’s agricultural machinery

In the Nigerian agricultural sector, there is an untapped business opportunity in the efficient maintenance and repair of machinery, such as tractors, notes Mira Mehta, CEO of tomato paste producer Tomato Jos. Persistent parts shortages have led to prolonged downtime. Mehta advises prospective entrants to connect with commercial farming entities to understand and solve their unique challenges.  <https://www.howwemadeitinafrica.com/profit-making-idea-maintenance-support-for-agricultural-equipment-in-nigeria/67593/> 

8. A case for essential oil production in East Africa

Maxima Nsimenta, CEO of Livara – a Ugandan company producing natural products for hair, skin, and body – sees untapped potential in essential oils production in East Africa. She notes that while the region imports significant volumes of essential oils, there’s scope to produce them locally. Flowers grown in Uganda and Kenya are primarily exported to places like Amsterdam and other European destinations. However, local industries haven’t maximised the potential of extracting essential oils from these plants. For instance, lavender, abundant in oils, could be a local source for extracting lavender essential oil. A small bunch of lavender in Uganda costs around 15,000 shillings (approximately $4), but 20ml of its oil can fetch about $40. Essential oils are in demand locally for various uses, from pastries and beverages to cosmetics like lotions, creams, and perfumes. Even smaller industries, such as scented candle makers, require essential oils. -Howwemadeitinafrica <https://www.howwemadeitinafrica.com/profit-making-idea-production-of-essential-oils-in-east-africa/101164/> 

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