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Bugesera Agribusiness: Impacting bottom of the pyramid farmers in Eastern Rwanda

Opening a large business in an area where almost 50 percent of the population live below the poverty line might deter some of the hardiest business people, not so Mr. Christophe Kanyandekwe, owner of Bugesera Agribusiness Company Ltd, also known as BABC.

A mechanical engineer, Mr. Kanyandekwe bought BABC which is located in Gashora, Bugesera district, Eastern Province of Rwanda, in 2014. Prior to his acquisition the company which started operations in 2008 was run by a farming cooperative called Indakuki Cooperative. When Mr. Kanyandekwe bought the factory, he retained the 328 members of the Indakuki Cooperative as suppliers of maize kernels, as he did not want the members to lose their livelihoods.

Today BABC is the largest agribusiness in Eastern Province and it has supply contracts with 86 cooperatives who represent approximately 70,000 farmers. In a province struggling to deal with poverty and with people thinking about how they will put food on the table, companies like BABC provide a lifeline. Each of the farmers that supply the company through their cooperatives are at the very least assured of having a captive market for their products. As many Rwandan farmers are at the bottom of the pyramid, agri-businesses like Bugesera Agribusiness encourage local farmers to see farming as a viable enterprise.  This is important in a country where agriculture is a mainstay for thousands of families.

In the first quarter of this year, according to the National Institute of Statistics of Rwandaagriculture contributed 31 percent to the country’s GDPAgriculture is expected to play a vital role in reducing poverty and ensuring the country is self-sufficient in its nutrition needs.

Mr. Kanyandekwe is also a shrewd businessman in that he finds reliable buyers for his products. One of these buyers is Africa Improved Food Ltd., a company who is taking the fight against malnutrition in Africa head on. BABC signed a contract with the company to provide them with 600 to 1500 tons of soy beans a year for the next three years.

As BABC grew it found itself in need of finance and in GroFin it found a partner willing to help. GroFin, which has made a name for itself investing in small growing businesses(SGBs) has agribusiness as a sector of focus  across sub-Saharan Africa and MENA. Another large Rwandan agribusiness that GroFin supports is Yak Fair Trade. Therefore, partnering with a company like BABC made sense for GroFin. The financing allowed BABC to purchase new equipmentbuy additional raw materials and expand its warehousing capability. In addition to the financing the GroFin Rwanda team provided business support to BABC, which started pre-finance, when the company was advised to properly register its assetsPost finance the company received help on how to better structure its sales and marketing strategy. Additionally, advice was provided on production process automation, improvement of packaging system, and looking into export possibilities. To further help BABC, GroFin Rwanda will introduce BABC to PUM experts who will be providing advice on product certification.

Through GroFin’s finance and business support, BABC is able to sustain 62 permanent jobs of which 24 are held by women and 51 are low skilled/semi-skilled.

“Thanks to GroFin, I was able to expand capacity and make a greater impact in our province of Eastern Rwanda. I think agribusinesses in Rwanda must not hesitate to invest in our agricultural sector.” – Christophe Kanyandekwe

GroFin Rwanda deepens agribusiness reach in East Africa

After transforming Rwanda into a model for conflict-affected states, the Government of Rwanda is now focusing its reform efforts on a vital needs sector: agribusiness. What makes this sector so crucial is that over 75% of Rwanda’s workforce is concentrated in agriculture. Against this backdrop, GroFin is deepening its efforts to reach out to agribusinesses such as Yak Fair Trade Ltd, based in the Rwamagana district of Rwanda’s Eastern Province.

Yak Fair Trade Ltd was founded by entrepreneur couple Mediatrice Uwingabire and Janvier Gasasira in 2010. The agribusiness works hard to improve the quality of maize and beans, two of the most consumed staple foods of East African Community, through a project aimed at controlling quality from production to final consumption. The company has signed exclusive supply contracts with 65,000 farmers grouped into 52 cooperatives in Eastern, Southern and Northern Provinces, both ensuring grain supply for its own use as well as benefitting farmer livelihoods in its community. It also sells the surplus to other institutions such as the World Food ProgramAfrica Improved Food and UNHCR.

Besides, given the importance of animal protein as a readily available source of nutrition to low income households, Yak Fair Trade Ltd is also diversifying into the processing of quality cowsgoatrabbitfishpork, and chicken meat through a mini-processing plant that it has recently installed in Kigali-Nyarugenge. The plant relies principally on supplies from small holder farmers supported by the Girinka project. The One Cow per poor family or Girinka project is based on the premise that providing a dairy cow to poor households helps to improve their livelihood by commercialising dairy products. Since its introduction in 2006, more than 203,000 families have benefited from the programmewith a target of reaching 350,000 Rwandese families by end 2017.

In August 2017, Yak Fair Trade approached GroFin for finance to expand the milling capacity of its maize flour plant that currently produces at 40% of its daily production capacity. In addition, the agribusiness secured a sizeable new supply contract from Africa Improved Food (AIF) in mid-2017. A joint venture created in 2015 between Government of Rwanda and a consortium of four partners: Royal DSM, the majority shareholder, the Dutch Development Bank (FMO) and the British government’s development finance institution CDC Group; AIF produces high quality nutritious complementary foods for infants as well as pregnant and breastfeeding mothers.

In addition, for its meat processing venture, the company needed finance to purchase a distribution van with refrigeration capabilities for easy distribution of meat products to consumers within Kigali.

Apart from finance, GroFin is also assisting the business with conducting a detailed Environmental Impact Assessment and re-defining the duties and responsibilities of the main shareholders towards improved corporate governance.

GroFin’s capacity to extend business support to agribusinesses such as Yak Fair Trade has been enhanced by a grant from the USAID East Africa Trade and Investment Hub (the Hub)The grant will involve GroFin screening 200 agribusinesses and offering tailor-made technical assistance to promising SMEs across Rwanda, Tanzania, Kenya and Uganda, ensuring that many more agribusinesses such as Yak Fair Trade can benefit from this partnership between GroFin and the Hub.

Already, this grant has catalysed the creation of 55 skilled and semi-skilled jobs as well as sustained 16 existing jobs at Yak Fair Trade. Moreover, all 65,000 farmers that supply to Yak Fair Trade will benefit from the enhanced business value chain. Finally, our investment and support has high implications for women empowerment as the company is led by a female CEO and female employment stands at 43%.

With GroFin’s finance and support, we are set to deepen our reach to farmers, expand employment to four times the current levels, and improve food security for the community,” concludes Janvier, the company’s co-founder and Chief Operations Officer.

Nigerian Banker turned Herbalist: The entrepreneur of Jim Products Limited

Nigerian banker-turned entrepreneur Mikail Jimoh is the founder and Managing Directorof Jim Products Limited (JPL). He worked in the banking industry for over 10 years before joining Anisere Herbal Consults to deepen his knowledge of herbal products prior to setting up JPL in 2001.

The business commenced production of herbal products in 2002 for sale and distribution in Nigeria and the West Africa Region. However, by late 2011, the factory and production facilities started showing visible strain. In June 2012, the company was supported by the GroFin Africa Fund (GAF) with a loan of N79m for building a new factoryreplacing equipment and financing working capital. The building has since been completed, equipment installed and made fully operational.

His experience with GAF having exceeded the entrepreneur’s expectations on all counts, it was little surprise that Mikail approached GroFin yet again in 2015 when he needed working capital finance to grow his company’s client base.

GroFin showed no hesitation in stepping in with a loan of N89m spread over 5 years under its SGB Fund, to give the highest possible financial boost to the entrepreneur.

Besides finance, GroFin Lagos Investment Manager Femi Salami assisted the client ably on the business support front, providing help for critical working capital aspects such as inventory managementcashflow management and financial management.

ESG compliance was also ensured by restricting staff movement in sensitive production areas and effective waste management within premises. Operations improvement was effected by putting an assets register and equipment maintenance logbook in place,” says Femi.

This investment will create an additional 10 jobs of which 8 will be semi-skilled or unskilled. It will also sustain 77 jobs of which 90% are semi-skilled or unskilled and 67% are female. Also, about 1,200 indirect jobs will be sustained by the existing 37 customersand 40 suppliers.

Finally, GroFin sees high impact from this investment as the client manufactures herbal healthcare products for teeth, skin and hair, thus considerably improving the health standards of his consumers. It may be noted that a significant percentage of the consumers hail from the bottom of the pyramid.

“What most conventional banks shy away from, remains the core business of GroFin – supporting SMEs,” concludes Mikail.