End of Year & End of an Amazing & Challenging Business Venture at Afrika Consultancy

INTRODUCTION

The year was 2014, an idea of a sustainable business connecting the two places I currently call home (Denmark and Zimbabwe) was born; a concept known as “Production, processing and exporting macadamia nuts from Zimbabwe”

Innovation, job creation, capacity building, technology transfer, local production, added value to export products(macadamia), establishing new trade corridors between Zimbabwe and Scandinavian countries by connecting growers to consumers, was on this idea’s agenda.

ABOUT THE LOCATION

The chosen city was Chipinge, a city in the Eastern Highlands of Zimbabwe, with a population of about 20 000. It is a good 6hr drive from the capital of Zimbabwe, Harare. Chipinge was chosen because it has the largest macadamia plantation in Zimbabwe. However, even with that, according to national statistics, it is said that most people in the area live on $2 a day on average.  Furthermore, about 90% of the population is said to be unemployed. However, we as Afrika Consultancy conducted our own research, prior to the commencement of the business venture, which suggested that 70% of the population were unemployed. This is due to the informal sector jobs which the national survey does not consider; most farmers grow food both for personal consumption and selling or carrying out butter trades (semi-subsistent farmers).

The Central Business District of Chipinge is rundown and has low business activity. It has the three large commercial companies in the tea, coffee, macadamia nuts and bottled water industries. They employ about 1500 locals. Unfortunately, the plough back by these large firms into the region is currently minimal.

WHY DID WE BELIEVE THERE WAS A BUSINESS PROSPECT?

There had been a considerable interest in growing macadamias in Zimbabwe due to a strong international demand for kernel and the short supply of kernel, resulting from the drought conditions of the previous two seasons (2013/2014). At the same time, the government was seen to be delaying addressing calls by local farmers to be supported. Farmers believed with a little bit of support they could be empowered, and this would reduce the exploitation by foreign Macadamia nut buyers who visited the area each year, offering low rates.

Chinese buyers also came to buy and ship hundreds of tonnes of the macadamia nuts in shell, to processes in China. Neighbouring South African buyers were also doing the same. No plough back was being done to the community by any of the buyers, and this is what Afrika Consultancy aimed to change. Farmers had no choice but to sell at low rates of $1.80 per kg, whereas the end product was being sold for $10 – $15 per kg in Europe and other more developed markets.

After setting up a team to speak with the local macadamia nut farmers, we were pleased to learn that farmers were also interested in having their nuts processed locally as this would raise their income and create more jobs in the area.

About the product itself, it turned out that the Zimbabwean macadamia nut was clearly on demand due to its quality and taste; buyers from Dubai, Australia, South Africa and China were making inquiries.  This is accredited to the organic farming that takes place. Despite the previous drought, the region is normally blessed with good sunshine and plenty of rain to the point that most farmers don’t have irrigation systems and yet can still produce quality products.

According to the local Agriculture Research and Extension Services (AGRITEX) Chipinge office, in 2013, farmers produced 225 829kg (in shell) of macadamia nuts. This was done by farmers on over 3 851ha of land. This showed us that there was a business opportunity to explore.

THE BUSINESS

With my penchant to bring sustainable businesses that add value to local developmental issues into Zimbabwe from the Nordic region and the above information in mind, I found this to look for both local and international strategic partners so that this idea could materialise. This was achieved, and its goal was to;

  1.  Establish a processing plant with up-to-date equipment/machinery.
  2. Run a capacity building programme, i.e. a training centre ensuring regular educational programs about macadamia nut planting and processing (with emphasis on quality and technology) were held.

ACHIEVED RESULTS:

The project was funded in April 2014 but officially launched in June 2014. By 31 July 2015, a significant number of locals were employed through this project; with a total of 92 labourers on contract basis, employed directly by the small-scale farmers in our capacity building program. 6 members of the project management team and 19 workers directly linked to the construction of the macadamia processing plant were also employed. This brought the total number of local employment created via this business to 117 in the 1st year of operating.

With regards to the capacity building and technological transfer; 9 capacity building trainings were conducted with at least three leading facilitators at each time.16 farmers were trained, and 4 topics were covered. One of the topics covered was on how to use the de-husker which was part of the machinery acquired by the business. A plant was built and diverse up-to-date equipment for it was ordered.

CHALLENGES:

Every business venture has challenges, but little did we know that our idea would be short-lived, at least under the initial establishment. The project/business started to show signs of weakness already in the initial phase as it did not seem that partners had the same vision for the business. (An element that is crucial prior to going into a business marriage). Classic partnership conflicts arose which paved way for a fraudulent incident that resulted into the final “divorce”.

My role as founder and business development coordinator quickly shifted to that of damage control and I was determined to make sure the business continued regardless, as we had head hunted too many local staff from their secure jobs in a country with 90% unemployment rate. Therefore, for that too, I was committed to making sure the business continued, even if it meant without me in it. Thankfully, I found a suitable local new owner with industry experience, good work ethics and a similar vision for the business. This business has now finally been fully handed over.

CONCLUSION:

What a beautiful way to end the year; I can finally exhale! I can exhale for the mere reason that the two years of damage control is finally over. However, it is with a heavy heart that I hand over this rather promisingly lucrative business to someone-else. I find solace though, in the fact that the new owner is more than just capable of running with it, but building a local company (Zimbabwean) with both local and international clients and partners. He has also re-hired my most experienced loyal and full of passion Production Manager with even better perks, how can it not be an ending to smile about?!

I have learnt so many valuable lessons through this venture and upgraded my skills in the conduct of business in today’s Zimbabwe. Equally important, I have mastered how to identify the right team structure with a mix of local and international partners for a local (Zimbabwe) project/business.

A great ending to a challenging year can only amount to a great start to the New Year (2018!)

 

First published on LinkedIn in December 2017

Florence Charamba Christensen

Founder, Afrika Consultancy

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