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A farmer walks through his field. Sugar cane yields and sucrose in cane are expected to remain relatively unchanged in the 2016/17 production season.
By Nawa Mutumweno
Zambia Sugar Company is reducing its sugar exports into the European Union (EU) to the regional market in view of the sugar reforms in the bloc to be effected in September 2017.
The agribusiness company will this year reduce sales to the EU from 22 percent to 14 percent as it explores Africa’s regional markets, both traditional and new markets.
According to managing director, Rebecca Katowa, this follows the sugar reforms that have impacted on the sugar regime and resulted in prices in the EU converging into global prices.
The prices are below the cost of production and reflect residual markets and key players, namely Brazil, Thailand and India, who put sugar on that market with India’s sugar being subsidized.
’’The strategy is to move volumes away from the EU to regional markets because the regional market provides valuable alternatives. Shifting export sales away from the EU to the region is expected because realisations in these markets will continue to be influenced by exchange rate movements,’’ she elaborated at a stakeholders’ breakfast meeting in Lusaka recently.
The prices of sugar are expected to remain above world levels within the region despite increasing levels of competition among regional producers, Mrs. Katowa added.
The company is looking to expanding exports to the Great Lakes region and the Democratic Republic of Congo (DRC), among other African markets.
Meanwhile, Zambia Sugar will this month-end commission the over K500 million refinery which is projected to more than double sugar production to 90 000 tonnes annually, reaffirming the firm’s position as the largest producer in Africa.
Currently, the sugar agribusiness company produces 40 000 tonnes of sugar per annum.
‘’The project was launched last year and will be on stream at the end of the month and contribute to our growth strategy,’’ she said.
Meanwhile, the company’s Commentary for the Year Ended March 31, 2016 says a number of factors impacted adversely on sugar production in the period under review. These included dry climatic conditions in November and December 2015, power interruptions to irrigation and the outbreak of yellow sugarcane aphids which reduced sugarcane yields by 11 percent across the entire harvest area.
This yield decline was partly offset by a 2 percent increase in area under cane delivered. Smallholder schemes supplied 10 percent of the total 3.102 million tons of cane crushed by the Nakambala mill. Consequently, sugar made was reduced by 10 percent from 424 000 tonnes achieved last year to 380 400 tonnes.
‘’The reduced sucrose in cane was partially offset by improved sugar recoveries in the mill. Refined sugar production also increased to meet growing demand. The season saw a significant improvement in factory throughput, reflecting the benefit of improved equipment reliability and preventive maintenance practices together with a sustained focus on continuous improvement initiatives,’’ the Commentary reads in part.
Total revenue grew by 6 percent year on year, from K1.91 billion to K2.02 billion, largely due to continued growth in the domestic market where direct consumption increased by 7 percent and industrial consumption grew by 4 percent. In order to maximize revenues from reduced production, the sales mix was adjusted by reducing bulk EU exports by 45 percent. The remaining sugar was sold into Africa’s regional markets where prices remained under pressure from world market sugar.
The factory commenced crushing in the third week of April and operations have quickly stabilized. Early season, sugarcane yields are at expected levels and should improve as the crop matures.
Sugar cane yields and sucrose in cane are expected to remain relatively unchanged in the 2016/17 production season. The crop has been negatively affected by drought conditions, power shortages, the low water levels in the Kafue River and pest infestations due to drought stressed cane. Production is, therefore, expected to match the previous season.
Sugar production is, therefore, expected to match the previous season. Reasonably strong growth is expected in the local market. However, margins in the regional export markets are expected to remain under pressure from surplus sugar stocks on the world market.
‘’Realizations in these export markets will continue to be influenced by exchange rate movements. The new expanded sugar refinery will help the company take advantage of the growth in the local and regional industrial sugar markets,’’ it adds.
“Up skilling for farmers to become agripreneurs”
There is great excitement in the agricultural sector in Uganda as preparations are underway for the fourth Agribusiness Congress East Africa conference that is taking place in Kampala from 29-30 November. It is the first time that the event is taking place in Uganda.
Agribusiness Congress East Africa is a regional platform for discussions and knowledge sharing, to address those pertinent issues which are preventing the East African agricultural industry from truly flourishing as a global agribusiness hub.
Already the farming sector is showing great support. The Grain Council of Uganda (TGCU)’s Board Vice Chairman, Robert Mwanje, says the body “is delighted to partner, support and host the fourth annual Agribusiness Congress East Africa. The success of the event in the East African region has given the Grain Council of Uganda the confidence to host the upcoming edition in Uganda, setting it as a key entrant into the national annual calendar. The Congress strives to set progressive action for the commercialisation of the industry by exchanging knowledge, best practices and dynamic conversations whilst showcasing leading agri technology to highlight the right tools for East Africa’s agri sector.”
Other industry organisations that are official partners include the East African Chamber of Commerce, Industry and Agriculture (EACCIA), National Agricultural Research Organisation (NARO), Uganda Investment Authority (UIA), Uganda National Farmers Federation (UNFFE), Uganda Seed Trade Association (USTA) and Agricona.
“Moving the Agribusiness Congress East Africa to Uganda will once again extend the opportunity to set the spotlight on the rapid expansion of the agriculture industries within East Africa,” says Jon McLea, Director of Agricona, “and fuelled by peaceful elections, unregulated markets and fertile lands – will make the pearl of Africa a hot spot for agribusiness investments.”
Farmers to become agripreneurs
“We are just as excited about organising Agribusiness Congress East Africa in Uganda this year”, says event director Yolanda dos Santos, “and we look forward to bringing together national, regional and international commercial farmers, donors, stakeholders, investors, policy advisors, commodity traders and industry professionals. Through the programme we aim to enhance commercial activities, enable commodity trade, sustainability, empower youth and women, encourage up skilling and provide market accessibility to the East African agricultural corridors. We will also feature the leading technologies through a product showcase to highlight the right tools for East Africa’s commercial agricultural arena.”
She adds: “we all know there is great potential in the agri arena, including for commercialisation and the up skilling for an entrepreneurial mind-set amongst all-scale farmers to become agripreneurs, using technology and training programmes. Agriculture can generate huge opportunities for financial access and investment in the region and now is the time to set action to strategic plans unlocking the potential.”
- Market access through treaties and agreements: Uganda is part of the free trade areas of EAC, COMESA and SADC.
- Uganda is a signatory to major international investment and business protocols.
- Totally liberalised foreign exchange regime.
- Uganda has a population of 35 million people with a growing middle-income class with reasonable expendable income.
Well-known agri suppliers Engsol, Mascor, John Deere and Chief Industries have already signed up as event sponsors.
Agribusiness Congress East Africa will offer market access to more than 200 million people through Kenya, Ethiopia, Uganda, Rwanda, Burundi, Tanzania and South Sudan. Agriculture accounts for almost 30% of GDP in East African countries while staple foods represent 75% of total agricultural products traded. Agriculture employs more than 60% of the population in the region.
The event is organised by Spintelligent, a well-known trade conference and expo organiser on the continent, with particular expertise and experience in energy, infrastructure and agricultural development events; including the long-running flagship shows such as Agritech Expo Zambia, the East African Power Industry Convention in Nairobi and African Utility Week in Cape Town.
Agribusiness Congress East Africa dates and location:
Conference: 29-30 November 2016
Event location: Kampala Serena Hotel, Kampala, Uganda
Facebook: Agribusiness Congress East Africa
By Nawa Mutumweno
Norwegian firm, Yara International has been officially launched in Zambia, taking over the operations of Greenbelt Fertilizers Limited at a cost of about $51 million.
Whereas the transaction was first announced in December 2015, it was subject to approval by the Common Market for Eastern and Southern Africa (COMESA).
Greenbelt Fertilizers is a leading fertilizer distributor for Zambia, Malawi and Zambia.
Yara International says it has been motivated to acquire Greebelt Fertilizers Limited due to the investment-friendly policies introduced by the Zambian government which are conducive to business, thus attracting long-term investment into the country.
Yara business unit downstream Africa chief executive officer, Bernhard Fonsenka, said by acquiring Greenbelt Fertilizers, Yara will be able to provide sustainable crop nutrition, increase crop yields and farmers’ incomes.
‘’We invested in Zambia because we were motivated by the investment-friendly attitude that we have witnessed through the process of this acquisition. We observed that investment authorities, regulators and partners, all have the determination to attract long-term commitment by easing the cost of doing business,’’ he said at the launch of Yara Zambia on May 4, 2016.
‘’While Yara boasts of its ability to deliver the world’s best agronomic practices and resources to local farmers, it will continue to ensure that the farmer remains at the heart of everything we do with the aim of sustainably increasing their profitability, thereby improving their livelihood,’’ he added.
Speaking earlier, Agriculture deputy minister, Maxus Ngónga said the coming in of Yara in the agriculture sector will bring competition in the marketing of fertilizer.
‘’This investment has come at a time when Zambia is diversifying its economy and our commitment is not only to make Zambia the food basket of the region, but also attract investments that will help us achieve that dream.
‘’As a nation, we are delighted to have a new entrant in the fertilizer sector because this creates competition and helps to push the prices of the product down for the benefit of the farmer,’’ he elaborated.
Norwegian ambassador to Zambia, Arve Ofstad is optimistic that Yara, as a commercial producer of fertilizer, will add value to the Zambian economy through job creation and better yields for farmers.
By Nawa Mutumweno
Zambia is among 12 countries in Sub-Saharan Africa expected to benefit from the newly launched Stress Tolerant Maize for Africa (STMA) project that will develop improved maize varieties with resistance and tolerance to drought and diseases affecting maize production.
The varieties have been launched to help the region boost food security.
The STMA project introduced by the International Maize and Wheat Improvement Centre (CIMMYT) and the International Institute of Tropical Agriculture (IITA), will help increase maize productivity by about 30 to 50 percent and provide 5.5 million smallholder farmers with improved maize varieties.
According to the ProAgri latest report, other beneficiary countries are Benin, Ghana, Ethiopia, Kenya, Malawi, Mali, Nigeria, Uganda, South Africa, Tanzania, and Zimbabwe.
STMA project leader, Tsedeke Abate, said the four-year project will improve maize production for over five million smallholder farmer households by the end of 2019 in the targeted beneficiary countries.
‘‘STMA will use modern breeding technologies that will confer the desired resistance to pest and diseases, and tolerant climate stresses like drought and heat to benefit farmers within their socio-economic capabilities, that often dictate their access to important farm inputs such as fertilizer and improved seed,’’ he said.
The project will apply conventional breeding techniques to develop maize varieties and hybrids capable of resisting environmental shocks, including drought, low soil fertility, heat, pests and disease.
‘’The project also seeks to increase commercialisation of improved multiple stress-tolerant maize varities with gender-preferred traits,’’ he elaborated.
STMA will also link up national and regional initiatives to develop strategies that bridge the yield gap and dramatically increase maize production at smallholder farm level.
Continued collaboration with partners will enhance sustainable maize research and development systems in target countries through sustained variety release deployment and adoption which has been insufficient in many sub-Saharan countries, Mr. Abate added.
STMA is funded by the Bill and Melinda Gates Foundation and the United States Agency for International Development (USAID).
By Skye Lawrence
Carter Coleman is the Founder and CEO of Kilombero Plantation Limited (KPL), Tanzania’s leading rice producer. The 5818 ha farm is located in the Kilombero Valley, 450 km from Dar es Salaam. Prior to starting Agrica he founded the Tanzanian Forest Conservation Group, a non-profit focused on preserving local forests. In our conversation he said the need for preserving the rainforest from encroaching villages became evident to him during the two years he spent hang gliding over the mountains and training falcons after he first came to Tanzania as a Rotary International Fellow in 1989. The Tanzanian Forest Conservation Group has grown into a large NGO.
Skye: What is the history of the farm and how did you end up buying it?
Carter: In 2005 I decided to do a farming project. I wanted the farm to be in Tanzania because I’d been there since 1989. I hired a former Commonwealth Development Corporation (DCD) manager who had worked in Malawi and Tanzania. He and I looked around Tanzania for a year until we found this defunct farm which also had a title deed, which is a major advantage.
The farm had originally been a joint venture between the Tanzanian and North Korean governments, an almost personal project between Kim Il-Sung and Julius Nyerere, the first founding father of Tanzania. In the late 80’s, the North Korean army cleared 5,800 hectares in the Kilombero Valley. Because there is no grid they built a little mini-hydro station in the foothills above the flood plain in the foothills of the Udzungwa-Mountains. They didn’t put in irrigation which is the most expensive piece of any farm because North Korea ran out of money after the collapse of the Soviet Union.
That’s when all the North Koreans went home. I remember at the time the North Korean Ambassador was busted with a container full of ivory on his way home. So the farm was left basically defunct and was owned by the Tanzanian government until we came along and signed a purchase contract in 2006. We spent the last of our seed capital on hiring consultants, primarily CDC guys to do studies for our business plan. Then we were like, “whoa, we need about $70 million to have an irrigated 5,000 hectare farm!”
Skye: How did you fund the project?
We spent a year raising capital by visiting investment banks and private equity firms who basically said, “Thanks. Good luck with that. See you around.” Agriculture is capital intensive, has a long time horizon and is high risk with low to moderate returns. It ticks all the negative criteria. We were very lucky to have been introduced to Capricorn Investments who is our majority shareholder. It is primarily Jeff Skoll’s money. Capricorn has a long-term principled investment approach with a small portion of their overall portfolio willing to do high impact investments like our farm.
Getting the first anchor investor like Capricorn Investments is key to getting a project like this going. Now because British Secretary of State Justine Greening we have investment
from AgDevCo. She believes in more trade less aide, and that the British should be supporting British companies creating jobs and providing food security in the developing world. She visited the farm in June of 2013 and because it has become a showcase commercial farm with a transformative smallholder program she asked AgDevCo to invest.
Skye: Was your goal to sell locally in Tanzania?
Carter: The goal is to sell within East African Community-Burundi, Kenya, Rwanda, Uganda and Tanzania. Similarly we have always wanted to be as socially and environmentally responsible as possible. The business case for the farm and indirectly for each of the half million smallholder rice farmers in Tanzania across the country is zero-duty trade within the East-African Community protected by the common external tariff. It is impossible to compete as a Tanzanian rice producer with agriculturally developed countries such as Pakistan or Thailand. These countries have invested billions of dollars in irrigation over the last 60 years and have a variety of agricultural subsidies for producers. Africa is years away from a similar system so you rely on the common external tariff. I’ll get to why that has become challenge later on.
Skye: What are the farm’s next steps?
Carter: Next we are completing the pivot irrigation system to cover 3,036 hectares. Our first 500 kilowat, renewable, bio-mass plant that gasifies rice husks is coming online in April. We plan to build a second 1.2 megawatt soon so that we will be totally renewable using hydro and bio-mass, with the exception of the diesel for the tractors and the combines. We will be completely off grid.
We have a strong smallholder program where we’ve trained 6,527 farmer families and increased yields from one ton per hectare to 4.42 tons a hectare this last season.
The Kilombero Valley is a flood plain between two mountain rainforests that gets a huge amount of rain, it’s hard to grow anything but rice in the rainy season. Everyone in the valley, around 150,000 – 200,000 people rely solely on a rainfed rice crop for their annual income and food security. The intensive rice system that we have introduced has been transformative for farmers.
Skye: How have you increased yields?
Carter: By planting on a grid that is 25 centimeters by 25 centimeters. This is an unconventionally wide-row spacing and intra-row seed spacing. You get a better yield with these methods and by planting on a grid rather than just broadcast helter-skelter. With an unconventionally wide array of spacing you get deeper root system, bushier plant, therefore three and four times the grain.
Skye: If yields are increasing what are biggest problems you see for small holders to scale up production?
Carter: Smallholders need crop financing. We need a microfinancing organization (MFI) or a need a bank to lend to them, and then KPL can have an off-take agreement. We’ve been working with one commercial bank and one MFI. The commercial bank had a great repayment rate, but then decided it was not worth the trouble because the program was too small, and not scalable fast enough so they pulled out. The MFI had a bad repayment rate, and so they didn’t continue.
Now I’m talking to two banks and AgDevCo about devoting some resources to this issue. Farmers need financing options to lift themselves out of poverty by not pre-selling a portion, or the majority of their crop prior to harvest. If they do this it is worth a fifth of what it is worth if they can hold on until harvest. Pre-selling and therefore losing value is what repeatedly happens in Africa.
Skye: In the US there is the farm credit union. Would something like this system be a model that the Tanzanian government could set up?
Carter: Funding is a key challenge. The Tanzanian government has this thing called Big Results Now Initiative where they have Key Performance Indicators. They talk about our company, which is a registered Tanzanian Company, as a model project. They want fifteen project like ours by 2017 and 1,000 new warehouses around the country, etc.
When they were announcing their Key Performance Indicators to the private sector I raised my hand and said, “ you don’t have a prayer of hitting your KPI’s until you sort out the market.”
In 2013, with no forewarning or consultation with producers or consultation with the East-African community, the Tanzanian government allowed 80,000 tons of Pakistani rice to be imported exempt from the common external tariff of the East-African community. First the wholesale price of rice plunged 54 % in Tanzania. Then Uganda, Rwanda and Burundi, which are key export markets for Tanzania’s surplus imposed the common external tariff on all Tanzania rice. It was a major double blow that destroyed the domestic market and the export market. Things are now just beginning to normalize.
Skye: Tell me a bit about the Southern Agricultural Corridor of Tanzania? How is Agrica connected to SAGCOT?
Carter: KPL is the showcase project because we are in the Corridor and we’re doing exactly what this Initiative wants; a state of the art commercial farm and with a lot of effective smallholder programs. That’s why Justine Greening came to visit us. We get visitors all the time. SAGCOT is a great thing because the SAGCOT Center plays a role in getting the government to stop the duty free rice for example. They play a useful lobbying role for sensible agricultural policy and attracting donor funding for infrastructure projects, roads and power grids.
by Dave Ramaswamy, Africa Agribusiness Magazine
Dave: What is IFA’s mandate? Please give an overview of your work in Africa.
Esin: IFA is a trade association representing the global fertilizer industry with about 550 members in more than 80 countries, of which half hail from emerging economies.
IFA’s priority today is to promote the efficient and responsible production, distribution, and use of plant nutrients. Access to affordable fertilizers is a key issue in that respect, in particular in Africa.
For Africa, IFA is committed to facilitate reaching the Abuja target of 50 kilogram/ha in an environmentally responsible manner. In order to do so IFA as an association runs an Africa Forum.
In addition, IFA partners with various stakeholders on a series of programs and campaigns.
- In order to develop from the ground up, African agriculture requires better and more reliable data. In partnership with IFDC,AfricaFertilizer.org facilitates exchange of information about fertilizer markets and policies. It has quickly become a standard reference website for all of those interested and involved in agricultural markets.
- Recognizing the need to foster expertise on the continent, IFA and the African Fertilizer and Agribusiness Partnership (AFAP) run the Africa Fertilizer Volunteer Program. The AFVP places global fertilizer industry experts willing to volunteer their time and knowledge towards building the African fertilizer value chain, with the ultimate goal of increasing fertilizer users and usage in the continent on the field in countries. Experts from fields such as project development, financing, marketing, logistics, and safety, health and environment (SHE) in production. So Far the pilot countries have included Ghana, Tanzania and Mozambique.
Individual companies who are IFA members also undertake their own extension initiatives in countries across sub-Saharan Africa, training agro-dealers and farmers on soil testing and fertilizer best management practices.
As an Association IFA is very active in the multilateral arena. This year, IFA and 7 partners organizations ran a year-long campaign promoting smallholders’ access to fertilizer in Africa. The campaign included 3 side-events, a letter to African heads of state, a campaign video and numerous media articles aimed at raising awareness among policy-makers and business leaders alike.
Dave: What are the biggest growth markets in Africa? Which countries and even which regions? Please give a percentage breakdown of customers – governments, cooperatives/self-help groups, commercial farmers? What are your usual sales channels.
The African fertilizer market has been stagnating from the mid-80s till 2008, increasing by 15% only during that period. Since 2008, the region is witnessing robust growth. Between 2008 and our forecasts to 2015, we see the regional market growing by more than 40%. Most of the expansion would come from Sub-Saharan Africa. Fertilizer demand in Sub-Saharan Africa without the Republic of South Africa is projected to grow on average by 8% annually. Nigeria and Ethiopia are the leading countries in Sub-Saharan Africa. But demand is also increasing in Kenya, Tanzania and many other countries that are committed to increasing agricultural productivity. Today, Africa as whole accounts for slightly less than 3% of world consumption, but this share is expected to increase over time. With an average application rate of some 10 kg/ha, Sub-Saharan Africa consumes 10 times less fertilizer per unit area than the global average. This is one of the main reasons for the high yield gap and prevalence of hunger in the region. Working with partners, we are striving to increase fertilizer consumption in Sub-Saharan Africa to address both food insecurity and poverty in the region, and help realize the immense potential of the continent.
Dave: Given fertilizers are generally expensive to use in Africa – compared to other regions, with poor storage and transport infrastructure, how do you ensure smallholder access?
Esin: The elevated price of fertilizer in many regions of Africa is mainly due to high transaction costs and the lack of local production and blending facilities. IFA works towards enabling and enhancing smallholders access by engaging in innovative partnerships with other stakeholders. These partnerships aims to provide the following catalysts for African smallholders:
- access to credit, finance and insurance by retailers and farmers.
- facilitated imports and the distribution of diverse fertilizer products.
- Individual IFA members often invest in infrastructure: transport, handling, storage, and blending facilities.
- We are also keen on developing mobile technologies to provide information on markets, extension services and prices.
- IFA members also train extension workers to help farmers organize themselves.
- Last but not least we work to disseminate best practices based on the integration of organic and mineral nutrients, balanced fertilization, and other good soil and crop management practices.
Dave: Given recent talks at the UN about climate smart agriculture, how should lower nitrous oxide (N2)) emissions – a greenhouse gas, be implemented in fertilizer production? N2O is 300 times more potent than CO2. What financial commitments are required and within what implementation timeframe?
Esin: The fertilizer industry recognizes the importance of GHG emissions reductions and sees climate-smart agriculture as a vehicle for that. To this effect, IFA is a member of the Global Alliance for Climate Smart Agriculture.
Moreover, IFA encourages its members to minimize their direct emissions, to foster the reduction of emissions related to the use of fertilizers and, where possible, to contribute to the creation or expansion of carbon sinks. IFA encourage its members to act throughout the lifecycle of their products, from their production to their use by promoting industry best practices and supporting the development of innovative fertilizers and more efficient and effective application techniques in order to reduce nutrients losses to air, water, and soils to the minimum possible.
GHG are mostly produced from ammonia production processes. IFA encourages its members to adopt best available technologies (BAT) to reduce emissions. New technologies for nitrogen oxide (NOx) capture have been developed and adopted.
IFA members are reducing their carbon footprint by investing in energy efficiency and emission control technologies. Modern fertilizer plants are rapidly approaching the theoretical minimum energy consumption for ammonia production. Conversely, phosphate fertilizer production has become largely energy and greenhouse gas neutral, due to energy co-generation activities during sulfuric acid production.
Dave: The Green Revolution in India, in some places like the Punjab, has now reached the limits of crop yields with indiscriminate use of fertilizer, with its resulting harmful effects on soils and human life. How do you see the Green Revolution in Africa evolving differently? e.g. in many places of Africa where soils are degraded, use of fertilizers is not a magic bullet for increasing yields. Soil organic matter needs to be rebuilt first.
Esin: The Green Revolution in Punjab has not reached its limit. As far as fertilizers are concerned, the fertilizer subsidy policy currently in place in India encourages unbalanced fertilizer use. If the Indian policy is revised to rebalance the ratio between nitrogen fertilizers and phosphate, potash, sulphur and micronutrient fertilizers, the room for increasing productivity in a sustainable manner is still substantial.
Africa should of course learn from the mistakes and build on relevant success stories in other parts of the world. For instance, the model applied in the Brazilian Cerrados should be considered in the savanna areas of Africa, where soils are also acidic and often nutrient-poor. In these areas, applying fertilizers is not enough; fertilizer use must be combined with the application of lime to improve the soil pH and with the return of crop residues and livestock manure to progressively increase the soil organic matter content. But, without fertilizer, there is no hope of increasing agricultural production in Sub-Saharan Africa without undesirable large-scale land use changes and related greenhouse gas emissions and biodiversity loss.
Africa could also learn from initiatives in Asia in terms of distribution and outreach strategies. Models developed in India for knowledge transfer to the farmers, including the use of mobile phone technology to access agronomic and market information, are worth adapting for smallholder farmers in Africa.
Dave: What is the role of micronutrient additives/supplementation in fertilizer use?
Esin: The first role of adding micronutrients to fertilizers is to increase productivity. There are many areas in the world, both developed and developing, where micronutrients such as zinc and boron have become the limiting factors. In these cases, if the limiting micronutrients are not added, crops respond sub-optimally to fertilization with macronutrients. Adding micronutrients to traditional NPK blends can also address an array of human health conditions caused by micronutrient deficiencies. This is especially true for zinc and selenium. More than one-tenth of the total disease burden can be traced back to micronutrient deficiencies.
Among all micronutrient deficiencies, zinc is one of the most common: 2 billion people worldwide are zinc deficient and 1.5 million children die each year from zinc deficiency induced diarrhea. The FAO estimates that 50% of the world’s agricultural soils are also zinc deficient. Micronutrient deficient soils reduce not only yields, but also the intake and bioavailability of minerals that are essential to humans who consume the crops cultivated on these deficient soils. Supplementing fertilizers with micronutrients addresses the deficiencies in the soils, in plants and in humans. As such, they contribute to increasing the quantity of food by raising yields but also the nutritional quality of the food. The added micronutrients have immediate and profound impacts. Chronic deficiencies affecting mostly women and children in the local population are quickly eliminated as a result and contribute to eradicating many micronutrient-related illnesses.
Dave: What does environmental sustainability mean to you? How do you define responsible fertilizer use?
Esin: For me personally, environmental sustainability is about making responsible business decisions that can foster economic growth and poverty alleviation while safeguarding the environment by limiting negative effects on the environment and on biodiversity. Responsible fertilizer use entails a balanced application of crop nutrients so as to maximize yields and maintain soil fertility, while reducing greenhouse gas emissions and nutrient run-off to the environment.
During my mandate as IFA president, I have focused on shifting application from areas of nutrient excess to areas of nutrient underuse. I also believe that farmer outreach is essential for responsible fertilizer use. Farmers must be made aware of how to apply the right nutrient source, at the right rate, at the right time, in the right place. This is what we call the 4R nutrient stewardship, a framework based on sound scientific principles that guides all IFA members in their outreach and extension programs.
Dave: Please tell us about some success stories
Esin: I would like to focus on a success story that is very personal to me. Because I believe that fertilizer have an important role to play in advancing food and nutrition security and that we must shift the conversation from enough calories to eating more nutritious food I will give en example from my home country – Turkey.
After scientific research revealed that soils in Turkey were severely deficient in zinc and wheat yields very low as a consequence, my company Toros Agri, dedicated itself to produce zinc-enhanced fertilizers. Our efforts have been repaid not just with higher yields, but also with a new generation growing up free of deficiencies. Since crops were able to absorb zinc from the soil, grain had a higher zinc content for the benefit of uthe humans who consumed the cereals grown on it. Nowadays over 300 000 tons of zinc enriched fertilizer is applied in Turkey and the economic benefits are at approximately $150 million as estimated by the Turkish Ministry of Agriculture.
The zinc success story is not limited to Turkey alone. In fact, half of the soils in the world are deficient in zinc. Important work and field trials are being conducted under the Zinc Nutrient Initiative in China, India, Brazil and Bangladesh.
I hope that this success story from Turkey can be adapted and implemented in other regions of the world where micronutrient deficiencies threaten the future of children in particular.
Dave: Thanks for your time
Esin: You’re welcome
hiweshe Chirevo holds up some of the veterinary medicines he’s procured to care for his goats.
Story and pictures by Jennifer Hyman, Director of Communications
Land O’Lakes International Development
Until recently, eking out a living was a huge struggle for Chiweshe Chirevo, who lives in the parched Zimbabwean town of Buhera, in Manicaland Province. With little arable land to speak of and insufficient rains to nourish soil that more closely approximates sand, meeting the nutritional and household needs for his nine-member family was a significant challenge.
To get by, he did some basic subsistence farming of maize, millet and sorghum, and would earn a little money by drying and selling limestone on credit, which he would exchange for more grains. However, getting any protein in his family’s diet – particularly meat – was rare.
As beef and dairy cattle have difficulty surviving and getting adequate nourishment in such an arid environment, Chiweshe and other smallholders in the area also regularly keep goats.
However, Chiweshe found it hard to maintain his herd, as he often had no choice but to sell these few assets that he had when times got tough. “I obtained my first goats in 1989 and once had as many as 20. However, I had to sell them all off over time in order to pay the school fees for my seven children, while others died of disease.”
Although 97% of Zimbabwe’s national goat herd is owned by smallholders, farmers rarely work together to leverage economies of scale. As they do not treat their goats as assets that require adequate care, feeding and shelter, they are often viewed as scavengers. When farmers are forced to sell their underweight animals at the farm gate, they cannot fetch a good market price, and they typically miss out on the many benefits these animals can provide as a key source for valuable milk, meat and fertilizer.
But, through the Zimbabwe Livestock for Accelerated Recovery and Improved Resiliency (ZRR) program, made possible by the United States Agency for International Development’s (USAID) Office of Foreign Disaster Assistance, Chiweshe and his neighbors are learning how to manage and market their goat herds collectively to improve their livelihoods. The program provides farmers with training on goat husbandry and health management, and trains Community Livestock Workers on preventative and curative animal health techniques.
Implemented by Land O’Lakes International Development, ZRR is assisting 2,000 farmers, who collaborate through 10 marketing groups of 200 farmers each. Farmers like Chiweshe receive three female goats, and are ultimately required to pass three female kids onto their neighbors, with one buck provided to service the breeding needs of each village’s goats.
To qualify for the program, ZRR requires that all the recipients already have other goats, and be willing to build a raised goat structure with one or two other families, with whom they can pen their animals together. Penning the animals in at night on a raised structure prevents them from being attacked by other wild animals, facilitates collection of their manure for fertilizer, and also helps to minimize an issue goats often face of foot rot, by providing them with a dry shelter.
“When the program started, I had 10 goats and received another three. I started taking better care of them and proactively working to breed them, which has already enabled me to pass on the three goats I was required to, sell 16 at the market, and still have 12 left over for future breeding and growth,” Chiweshe explained. Prior to ZRR, Chiweshe says he never thought about the importance of disease prevention, even though five of his animals previously died from preventable illnesses. “Through the program, I realized that buying the products required to dip and spray my animals was an important investment in my livelihood. I saw how spraying made the ticks on my animals disappear, and then I was convinced.”
Chiweshe Chirevo and his wife stand in front of the new home they’re building.
As a result of their new shelter, disease prevention efforts, and providing them with appropriate feed, Chiweshe says his goats now appear markedly healthier, with their coats free of lice. ZRR also trained him how to keep detailed records of goat births and sales for the first time. Moreover, since he started spraying and vaccinating his animals, none of them have died.
But, most importantly, times are simply a bit easier than they once were. He says he’s now able to pay all of his children’s school fees without issue, and the family now even slaughters a goat once every two months to enjoy some meat over the course of several weeks, which they used to only eat once or twice a year on special holidays. And he’s even started building a new, sturdier home to accommodate his large family, which he’s constructing as funds permit, brick by brick.
The support he received through ZRR has also allowed him to dream about the future, and to think about how he might expand into owning some local cattle one day. “I used to think that taking care of my family, by nature, had to be a struggle. But now, the program has convinced me – made me believe – that I can be a business man. And if I want to succeed, I must invest in what I do in order to grow.”
By Deborah B. Hamilton
Feed the Future Partnering for Innovation
Most companies want to “do well by doing good,” and Jose Jaar, president and founder of DelCampo Soluciones Agricolas, proves this is possible. Over the past two decades he has built an agribusiness that earns nearly $2 million per year selling drip irrigation supplies to smallholder farmers in Central America.
Jaar recently attended Feed the Future Partnering for Innovation’s AgBusiness Lab in Tanzania to discuss his business model with African drip distributors. The Lab was an interactive event featuring system design simulations, expert-led discussions, site visits, and farmer interviews all aimed at identifying profit-driven opportunities for African drip distributors to engage a largely untapped smallholder market potentially worth billions of dollars.
So, how did Jose Jaar build a profitable business in a smallholder market?
Business success depends on knowing the target market, creating products that fit the customers’ needs, providing excellent customer service, and pricing products to sell. Over the years, Jaar and his team of agronomist salesmen have cultivated customer relationships built on trust. They started by visiting the farms, listening to smallholders’ needs, and then providing training, advice, and support along with equipment sales. Today more than 60 percent of DelCampo’s sales are repeat business, and its sales representatives earn nearly 80 percent of their competitive salaries from commission.
In 2009, to build momentum, Jaar used funds from the Millennium Challenge Account-Honduras to offer credit to farmers to finance their purchases, which allowed many to access irrigation equipment for the first time. Today, DelCampo provides $250 in revolving credit to its regular customers, which they repay after the growing season.\
Approximately 40 percent of the world’s food producers are smallholder farmers, and estimates of potentially irrigable land in the developing world top 110 million hectares. So why do only 3 percent of the world’s one billion smallholder farmers have access to drip irrigation? Because, as Jaar notes, most irrigation systems are too large and too expensive for smallholder farmers.
Feed the Future Partnering for Innovation is a USAID program that helps to commercialize agricultural technologies and promote sustainable partnerships that benefit smallholders. Its sponsorship of the AgBusiness Lab included providing participating drip distributors with extension advice, and system design and cash flow tools, in addition to highlighting the Del Campo model as one that successfully adjusted in products to meet smallholder size and budget requirements – and made a good profit doing it.
Partnering for Innovation recognizes that drip irrigation is a critical piece in solving the food security puzzle, and projects that increased access will double yields and incomes for millions of African farmers. The program has additionally invested almost 20 percent of its total grant portfolio in companies that are scaling drip technologies to meet smallholder needs.
By Dave Ramaswamy
David Blumberg, CEO, Blumberg Grain -West Africa
AAM: Please give an overview of your company? Operating History? How/when did you decide to enter the grain storage business?
Blumberg: Several generations ago my father’s side of the family immigrated to America. They settled in Dothan, Alabama, the “peanut capital” of the United States. That’s when our family got into farming, growing cotton and pecans. Our family later dispersed across the U.S. but kept that farming backbone to some extent. In South Florida, we grew mangoes, tomatoes and other crops. From that history, we knew that storage and control over supply chains, from farm to retail, were the key to ensuring agricultural profitability
A couple of generations later, my grandfather, David Blumberg, became a developer in the city of Miami, where he was responsible for some of the largest residential and commercial real estate projects outside downtown. My father, Philip Blumberg, after graduating from Harvard Business School, started a construction company, Southern Projects, the origination of what was to become Blumberg Capital Partners. Starting in the early 1990s, as the youngest investment manager in institutional real-estate, he was able to raise money from family foundations, pension funds and other institutional investors. This he invested in Class-A commercial office space.
Through an approach that was both conservative and disciplined, he was able to build the leading investment fund in that sector. It delivered average annual returns of 18 percent through the ’90s and 2000s. One method he used for tracking and forecasting pricing was through analyzing the inflation component of the commodities that served as construction materials. A building is nothing but a bundle of commodities, an assembly of copper, nickel, glass, steel and concrete. So his company had a team that tracked those underlying commodity prices.
In 2006 my father saw a cliff on the real estate horizon and started divesting his real estate assets. The company returned 22 percent to its investors in 2007 – the highest-performing fund of its kind that year. The company was sitting on some sizable cash reserves at the end of the process. Looking to diversify the business, my father decided to focus on commodities. He decided to set up a fund, not focused on virtual assets, but to invest in actual brick-and-mortar projects.
For the commodities fund, the company looked at investments across the globe – wind farms in west Texas, rare earth deposits in Greenland, solar fields in India, etc. On a trip to India in 2010, to check on a solar field investment, our team traveled into a thriving agricultural area. It was the end of a bumper harvest season, and people were packing wheat into small warehouses called “godowns.” Due to a big harvest, and lack of fixed storage capacity, the wheat spilled over onto the area outside the godowns. The nightly rains had then started in earnest and would wash this wheat away onto the streets. The next morning cows and other animals were feasting on this rotting wheat. That year India lost a large part of its wheat crop to post-harvest losses, while hunger persisted across the country.
My father decided that food security was an area where someone needed to step in and play a role. Our company did research into post-harvest losses in grains, into agricultural value chains and into different emerging markets across the globe. And what became clear was that while India has problems with post-harvest losses, it is in a much better position relative to countries in Africa and some countries in Southeast Asia and South America.
So it was the trip to India in 2010 that made clear to us the opportunity in grain storage. My father found that it was an opportunity to use our expertise in real estate in combination with the latest technology from the United States. The company set up an R&D center in Ames, Iowa, a scientific hub in U.S. agriculture. And we started working with Iowa State University to develop our products and systems. We formed a team to come up with an offering for emerging markets to solve the issue of post-harvest losses.
The key was to develop a storage system that was simple to maintain and that also utilized the highest levels of technology. This included things like aeration fans, dehumidification systems and inventory management systems. The storage system would have built-in security with keypad entry and security cameras that could be monitored with an iPad. It could even be equipped with sonar guns, which blast sound waves at a person’s inner ear, and that would force any intruder to leave the warehouse.
Even though the name of the company is Blumberg Grain, we also knew that the issue of post-harvest losses affected the perishables (fruits/vegetables) area. So our Applied Engineering team developed systems that not only use refrigeration technology but also build in a controlled atmosphere capability. In the storage room, this displaces oxygen with nitrogen, unlike other systems that use lethal carbon dioxide. It’s the technologies we use in the warehouses that make us a market leader in food security.
AAM: Could you give us an overview about your range of storage systems?
Blumberg: We have our Grain Vault, which is a warehouse that can accommodate 1500 metric tons of grain, in a 600-square-meter facility, which we can put up in three days. We target this at smaller trading operations, farmers etc. It can also serve as the foundation for a larger network of disparate warehouses.
We also have huge systems that can accommodate 60,000 metric tons of grain or more. These compete with silos and surpass them on many levels. They have inflow/outflow rates of 200 metric tons per hour using pits, screening systems and drying systems. We use a new technology, designed with experts in the plastics industry, where we can fill 1.5-metric-ton FIBC jumbo bags. We’ve put them through a process where we vacuum seal them, and by doing that we extract the oxygen from the environment. This also allows for natural fumigation of the crop in the package. We don’t have to apply any hazardous chemicals, and because we are able to bring the oxygen levels in that bag to almost zero, grain can stay preserved for decades. This is game-changing technology.
We have the Blumberg Arctic Vaults which are refrigerated storage warehouses. Take a mango, for example. If you’re able to use controlled atmosphere technology with a mango, you can extend the shelf life of the mango to six months.
The Blumberg Grain warehouse is only one part of the equation. In order to maximize gains for our clients, Blumberg Grain offers a proprietary network management system that helps form the backbone of a country or company’s food supply and crop management program.
AAM: American companies perceive Nigeria as a difficult place to do business. Would you tell us about your work there?
Blumberg: Right now, there are many agriculture initiatives in Nigeria under the leadership of Minister [Dr. Akinwumi] Adesina. At the Nigerian Economic Summit in 2013, the focus of the summit was agribusiness in Nigeria. I spoke there about the issue of post-harvest losses. At the end of my talk, the farmers in the audience stood up and said, “We need Blumberg Grain Warehouses.” Minister Adesina, whom we had been in discussions with previously, spoke at the conference the following day and said he was going to buy 800 Blumberg Grain units, one for each district across Nigeria. Fast forward, and Nigeria is now receiving a large order of Blumberg Grain systems, for development across many states. The systems are mostly cold storage. In fact, the split is 75 percent versus 25 percent between cold storage and grain storage. Some of them are controlled atmosphere, and it’s the first time that this technology is going to be used in Nigeria. The minister is excited about this project. Our products catapult Nigeria into the 21st century when it comes to agricultural value chains, particularly in the crop storage space.
AAM: What is your business model? Who pays for the warehousing system, the government or private sector? What is the investment required for a standalone system? What is the payback period?
Blumberg: Blumberg Grain provides food security systems to both private- and public-sector clients. The main model by which customers use our technology is on a rental/leasing basis. In Nigeria our products are used in this way. Nine different states are receiving our technology. They’re going up now, but the government is renting them out to the private sector at subsidized rates. This is because the private sector has a problem with accessing financing, accessing land, accessing civil works etc. to get these storage facilities up. So the government is putting them up for the private sector to rent later.
What our storage system does in a country like Nigeria or many of the countries where we work is that it enables the farmer or trader to (1) cut down on the post-harvest losses that they suffer (in essence, doubling their true output); and (2) realize a sales price difference between the harvest season and that lean season that could be 400 or 500 percent higher. It puts a lot more money into the farmer’s or trader’s pocket.
As a result, the payback period on our technology is quite short. This is especially true, if you’re able to take advantage of this market timing arbitrage opportunity. In many instances, with our systems customers can recover their investment within one year.
AAM: Do your systems run on a variety of power inputs? Grid power is not always available or reliable, with voltage fluctuations, in these markets.
Blumberg: Good point. When designing our systems, we told our R&D team that they should plan for poor infrastructure as well as harsh climates. The Applied Engineering division designed our units so that a 600-square-meter facility (with 1500 metric tons of storage) can pack up into just one 40-foot cargo container. Our engineers designed our units for fast installation – as little as three days. They designed them for flexible use. Our units are modular when it comes to adding capacity and are upgradable when it comes to adding our technology options.
Speaking to your point about energy – it was clear that the units would have to be able to handle different kinds of energy supply. So we offer solar power, wind power, etc. as a supplementary power source for these systems. Our Grain Vault can run completely on solar power.
AAM: Is it solar PV? How exactly does it work? How do you handle power failure and redundancy?
Blumberg: That’s correct, Solar PV on top of the warehouse roof. You can get quite a bit of power out of those panels. What we’ve done is leverage technologies on the inside of our warehouse that are energy-efficient. The only issue is the cold storage component for which the power needs are quite high. Our cold storage could run on 100 percent solar power, but it then becomes inefficient from an economic perspective.
For our refrigerated storage, what we suggest to our clients is to locate these close to the existing grid. If that isn’t possible, we need to have generators in place to run the system. Even if we’re on the grid, we have the option to hook into different independent power solutions.
Our video on the technology describes this flexibility and some other features of our systems: http://www.blumberggrain.com/video/
AAM: What is the secret of your success in these demanding markets?
That is because of two things: first, the success that we have realized in the market vis-à-vis the application of our product; and second, for some reason, there haven’t been companies that emerged to play a role in this storage space in these emerging markets.
When you look at these developing countries, our competition is, for the most part, local concrete contractors. These contractors put up a concrete warehouse that has only a tangential application to food security. The warehouse offers no specialized ancillary options or specialized components. They don’t provide the safety and security needed to keep the crop preserved in-condition. So you continue to see high post-harvest loss rates.
We designed our warehouses with coatings and primers that reflect about 65 percent of the sun’s heat. We have seals that create foam closures between each panel. This means you don’t have leakage and you don’t have water coming into the facility. We’ve designed our warehouse to be basic nuts-and-bolts assembly, so any skilled labor can put it up fast. So there are no problematic issues with construction, and we can be sure the facility works as intended.
In agriculture, the harvest season dictates the timeline for construction projects. If you miss the harvest season deadline, you lose that year’s benefit. It is critical to be fast and timely. We hold the record in the industry for the ability to get 600 square meters of covered storage up, in three days.
AAM: If a private party approaches you interested to buy, what are the different options – and what are your price points?
Blumberg: Our systems are customizable. Though we have different product lines, they are all systems that come out tailor-made for the customer. We like to work them through a process where we identify what their needs are, and we come up with the solutions that meet them. When it comes to the private sector, the solutions are the same as what we would do for the public sector. I talked about our Grain Vault and Arctic Vault. We also offer our Self-Contained Bulk System that competes with silos. This system beats silos on cost, quality, natural fumigation, safety etc.
Every silo project that I’ve seen in Sub-Saharan Africa has failed because silos are difficult to maintain. Also, suppliers of silos are coming not from Africa, but from Asia, Turkey, North America and Brazil. For example, to fix a panel that breaks is difficult. You have to first evacuate the silo when you do maintenance, and then it takes too long to get spare parts to the site.
We designed our systems to be easy to manage and maintain. All our systems come with our export and repair kit. With our shipment you get a full kit of spare parts, to enable easy swap-out of a broken panel, or cracked gear – as the case may be. Because our structures are horizontal, it is easy to do that maintenance.
We designed our systems to be cost-effective – that’s the key variable that people use to compare in Egypt, Nigeria, D.R.C., etc. Cost is a bottom-line factor when making procurement decisions.
As an example, we can compare our Self-Contained Bulk System to a silo system that is 15,000 metric tons in capacity. The silo system with turnkey installation will set you back about $235 to $240 per ton. Compared to that, our system will cost you about $200 per ton. We include costs for the site prep (because foundations are a factor that we have to consider). So you see an almost 20 percent price difference between our systems and systems available in vertical silo form.
AAM: How did you target countries like Nigeria, D.R.C, Egypt? Could you speak about the sociopolitical implications of your work?
Blumberg: Blumberg Grain works across the globe. We’re in South America. We’re in the Middle East. We’re in Southeast Asia. And as you pointed out, we’re active in Africa. The common thread across the countries we target is a huge incidence of post-harvest losses. That is the main reason we are there, and the governments there have set an agenda for tackling food, water, and energy shortfalls.
Ministers and government officials now realize that the fastest way to increase farm productivity is to reduce post-harvest losses. In comparison, putting more acreage under plough requires considerably more expenditure and time commitments. They discuss the topic of food security among themselves, and the Blumberg name comes up. That’s how it happened in Nigeria and the D.R.C.
Policymakers now understand that losing large amounts of food grains is not just bad economics. The resulting food inflation could be a social tinderbox, resulting in riots – or a political tinderbox, resulting in the overthrow of a government.
The children of farmers in Sub-Saharan Africa see their parents lose almost half of their produce. They also see traders/middlemen take advantage by offering rock bottom prices at the peak of harvest. Farmers don’t have two dimes to rub together. And the children say, “We’re not going to do this. We’ll get out of farming, go to the city, where there’s more opportunity.” But in the city they face terrible living conditions. With few employment options, they sometimes have to turn to the underground economy to scrape a living. There’s also violence. You see what is going on with the Boko Haram [abducting children]. A hungry belly is vulnerable to extremist influence and propaganda.
In Egypt, Mubarak’s overthrow was set in motion the day he decided to raise bread prices. He was running out of reserves to import wheat. Egypt is the world’s No. 1 wheat importer. I am visiting Egypt now to put in place systems to stabilize wheat prices, and replace the shounas (open-air cages) in Egypt. 400 of the shounas store most of the harvested wheat – and see about 30 percent losses, based on conservative estimates.
The product that flows in to the Egyptian Ministry of Supply is “out of condition” for the most part. So they lose billions of dollars a year on this wastage. The Ministry of Supply plans to upgrade shouna facilities into a modern Blumberg Grain infrastructure. That’s one of the projects we are working on right now.
Through our work in food storage, we would like to prevent unnecessary rural-to-urban migration. This in turn maintains social harmony and encourages political stability. The countries where we work can then have a stable environment for economic growth and development.
AAM: American companies typically think that doing business with African governments is a nightmare, e.g., the possible need for hush payments and kickbacks to win contracts, and officials making promises they can’t keep. What has been the difference between that perception and your reality?
Blumberg: As an American company, we don’t play those games. And in the past, we’ve had to abandon projects when such talk has come up.
One of our primary conduits into these countries has been the U.S. government. Our embassies and commercial officers help with introductions into the private sector. When they introduce us to counter-parties, they know that we abide by the Foreign Corrupt Practices Act (FCPA). So we get to build on relationships that are available through them while using the shield that they provide. We also go straight to the agriculture or trade minister, or the heads of state, who are progressive in their thinking.
AAM: What is your near-term company outlook, in the next one to three years? Are you considering opportunities beyond storage?
Blumberg Grain wants to solidify our position in Africa as leaders in food security. Meanwhile Blumberg Capital Partners, our holding company, wants to make other investments in these countries, in sectors like real estate, steel, etc.
We are looking to set up Blumberg Grain Food Security Fabrication facilities all across the globe. We plan to produce Blumberg Grain’s steel warehouses and components in the countries that matter most to us. This is a huge investment for the countries we’re in discussions with. We are close to finalizing our selection process in in West Africa.
KPMG has done studies on our Food Security Fabrication facilities. They would provide employment to 1000 people, produce 1200 units every year, and increase trade and industry. The estimated economic impact would be over $1 billion in the first year of operation, and reaching $10 billion over five years. So these projects are something governments are fighting over.
Blumberg Capital Partners is on track to expand investments across the agricultural value chain as well. They’re analyzing investments in different countries across the globe. We’re looking at $250 million investment opportunities that touch the entire value chain.
Beyond storage, investments in high-yield, high-efficiency farming will be the next step. Investments in logistics infrastructure will follow, going downstream. Then we’ll look at processing facilities, packaging facilities.
For example, in Nigeria they’re importing plastics. They’re bringing plastic bags from Lagos in the south all the way up to Kano in the North – about 500 miles – and it might as well be “transporting air.” That packaging can happen close to the final destination, and for significant cost savings. There is lot of opportunity like that, and there’s a strong emphasis within our company to look at agriculture in these emerging markets.
AAM: Some say that vested interests – like speculators, traders, local politicians – allow food wastage. So they can keep farmers at their mercy and/or be a source of patronage. How do you respond to that?
Blumberg: I don’t see anyone opposing improved storage. Even the players who control the grain trade still benefit if they can keep their product “in condition” for a longer period of time. As technology providers, we provide solutions to anyone willing to work with us. We also organize the financing to capture that value.
Many of the governments we work with are offering this technology as a rental to the private sector. This way a trader or logistics player can get access to more capacity. The local communities benefit because more crop volume is able to reach the market and more money stays in the community. The farmer can sell more crops and increase her income.
Our storage systems lay the groundwork for establishing commodities exchanges. The first step to develop a grain commodities exchange in a country is to have warehouse infrastructure on the ground. This is one way to move toward a market-oriented system where ALL participants stand to benefit. In the interim, stakeholders can still use and monetize our storage systems in their interests.
AAM: Finally, any lessons for American businesses considering working in Africa?
Blumberg: First, for market entry, I would suggest using the resources of the U.S. government. One can leverage U.S. government officials for market data and meeting facilitation. This can happen through the commercial offices of the embassy, the Trade Department, or other on-the-ground resources. Additionally, the U.S. government assists the private sector in financing activities abroad. Organizations like the EXIM bank, OPIC, and USAID-DCA provide low cost debt in countries, where financial markets are not that developed.
Second, I would tell American business not to be afraid of the Chinese competition. To a large degree American businesses are wary of facing off against Chinese businesses. Some American companies think Chinese companies, either state-owned or private, have a stranglehold over business in Africa. The truth is that governments in Africa are looking for American companies to step in and play a role in their economies. Customers and officials all over Africa recognize U.S. products as having superior technology, and we compete on that basis. Leveraging that strength of innovation and quality can overcome any issue arising from Chinese influence.
Third, there is a need to be realistic about timelines when viewing investment cycles. It’s not a novel revelation, but the speed of doing business in Africa is quite slow. So American companies need to internalize thorough preparation and focus on the long-term, as part of their business development strategy. Of course, there will be ups and downs in realizing any corporate goal in Africa. But if there is patience in the ethos of the company and a desire to look forward, there are enormous opportunities waiting to be engaged.
Story by Bobby David Gboyor
In May 2013, Africa Agribusiness Magazine’s (AAM) Washington-based journalist Bobby David Gboyor visited Sierra Leone and had the opportunity to tour the FINIC Industries Factory at Kissy, in Freetown. FINIC Industries is an agro-based national industrialization center that specializes in manufacturing of machinery and equipment used in processing a variety of agricultural products. The machinery includes Biomass Gasifiers, Cassava Grating Machines, Coffee and Rice Mills, Multi Juice Extraction Machines, Palm Fruit Threshers and Rice Destoners. FINIC has even manufactured its own Condom Vending Machines that are intended to be used at various entertainment centers around the country. The following is an exclusive interview with Mr. Foday Melvin Kamara, the quiet, unassuming but versatile Founder and Managing Director of FINIC Industries, SL Ltd.
AAM: Hello Mr. Kamara and welcome to Africa Agribusiness Magazine (AAM). Please give us a brief background of yourself.
Melvin Kamara – My name is Foday Melvin Kamara. I am the Managing Director of Fomel Industries and National Industrialization Center (FINIC). Fomel is the blending of two names, Foday and Melvin. These are my names that I blended to form the enterprise FINIC. I had my initial schooling here in Sierra Leone and continued my education in the Federal Republic of Germany where I did a further training in automobile engineering. When I completed my training, I came back to Sierra Leone and worked as a Training Manager at the Sierra Leone Road Transport Corporation (SLRTC). I headed a technical training school. I was tasked with the responsibility to train young people in the area of automobile engineering so as to have personnel that would take over the management of the fleet we had at the time. Before going to the SLRTC, I worked as a technical teacher at the Government Technical Institute at Kissy Dockyard. I am a person that is passionate about mechanical things, I really do have a passion for mechanics and this is what makes me happy.
AAM: Thank you, Mr. Kamara. As Founder and Managing Director of FINIC Industries in Sierra Leone, how did you conceive the idea of establishing an agro-based technology enterprise in your home country?
Melvin Kamara – When I was training manager at the SLRTC, I had the opportunity to interact and work with young people, the youths. And there I discovered how versatile young people are, how much talent they have, but they did not have the opportunity to put their talents into good use. Then I said to myself that we have to do something about it. I saw that after a period of training, we found youths engaged in doing things that were diametrically opposed to what they had learnt at training school. So I made a plan and contacted management to find an institution sponsored by diplomatic missions where the youths could go after training or graduation and explore their talents. The idea was not embraced but then as a trainer I thought it was a waste of money to just get people trained and let them go without engaging them into a productive activity so I decided to help in my own way. That is how I came to establish FINIC Industries. I started with six trainees. The first difficulty we had was where we could find the equipment. Money was a big problem for us. However, for me, I thought that money should not be the stumbling block to impede our progress. I said to them that if we have this talent, why don’t we use that talent to establish something where we could have a beginning? That’s how we came to build the vises. We went out and got scrap metals to build the vises. We build the engineer vise and I think we build over twenty of those vises.
AAM: Please go back to that point again. What did you build?
Melvin Kamara – We built the vises. A vise is a mechanical devise that we refer to as the “third hand of the engineer.” It is basically a devise that holds the job in place while the engineer works on it. It is a form of equipment. It holds the job into place while work is performed on it. For example, if we want to cut a piece of metal or do a filing, the vise is what we use to hold that job into place while we work on it. At that time it was sold for six hundred thousand Leones a piece. Our main aim was to just start somewhere so our logical point of departure was to build a devise to help us work on a piece of equipment. Our goal was to do something to minimize our endless importation of everything we need for our daily use in this country. We believe that if we have to import everything we need for our use into this country without a plan to start making things ourselves, then we are the enemies of ourselves by not making efforts to utilize our brains for the economic development of our country. And by relying solely on imports, we set in motion an “economic flight” by wasting our hard earned foreign exchange overseas and creating unemployment or underemployment in our own country. At all times we have had to depend on others for our own basic needs, so we thought it was time to begin to address the malaise of our perceived lack of creativity and ingenuity. As a result, we started this project sixteen years ago. Looking back on what we started with and what we now have, one can clearly see how much we have developed and how far we have come.
AAM: So you actually started this journey sixteen years ago?
Melvin Kamara – Yes, we started sixteen years ago in 1997. It was in that year that we established FINIC Industries in Sierra Leone.
AAM: How big is FINIC Industries in terms of numbers of employees, departments, sectors or branches around the country? What are your plans for expansion?
Melvin Kamara – We have a total of eighteen employees at the moment but we have a plan to hire more people as we grow. We also have what we call FINIC 1, FINIC 2, FINIC 3 and FINIC 4. These are not departments but, call them branches if you like, that we have established at various locations around the country. We started here in Freetown with FINIC 1 and then we expanded to FINIC 2 which is where we are presently seated, and we moved to the Koya Chiefdom in the Port-Loko District where we established FINIC 3. The FINIC 3 location is along the main highway between Waterloo and Masiaka, and here we established the Rural Technology Innovation Center (RTIC). The idea behind establishing this center was to have our technology tested there and also innovate into technologies that improve on the living standards of the people when it relates to their work or involvement in agriculture. We are convinced that if technology is to be sustained, it has to be owned by the people. So coming close to the people to design a piece of equipment with their input and giving it to them to use, it would help in enabling them to own the technology and at the same time it will help us to be providing them with spare parts at very close range. This is what gave us the motivation to establish the center. We have another branch in Bo and that is our FINIC 4. However, we are struggling at the moment to maintain real heavyweight presence in Bo District but we are still there trying to raise head above water.
AAM: What are the components of FINIC 1, 2, 3 and 4 in terms of machinery or the produce that are processed at the different branches or units? Is there a difference in terms of the output or is it one and the same thing?
Melvin Kamara – They are different in a way because FINIC 1 is where we started the production of the agro-processing equipment. And then we also have the showroom here at FINIC 1 where we showcase our machinery or put them on display. Now we have moved the production activities and concentrated those at FINIC 2. We still continue to maintain the showroom at FINIC 1 but, instead of using the location to manufacture equipment, we are now using it to produce processed food for would-be customers. For example, if we have customers who wish to process rice into powder for use as whatever form of cereal they like to have, we can now do that for them at FINIC 1. We can also process palm kennels into palm oil or fruits into fruit juice.
At FINIC 2, we do mainly production of equipment but we also have our demo house to showcase our work. The demonstration house is going to be a real house where we can put our machines into use. These are machines we use to produce various foodstuffs such as pap (a foodstuff that is widely consumed during the Ramadan period), powdered pepper, peanut butter and a wide range of products. The reason for the establishment of such a demo house is to give us an idea of what strength and weaknesses our machines have so it can help us to improve on the machines. And secondly, this is also a means for us to display our machines. It is very difficult to be producing machines in Sierra Leone and convince people that what you are producing is functional and durable to an acceptable standard, and the best way to do that is to showcase or demonstrate the equipment to prove that it works. This is what motivated us to establish this demo house at FINIC 2 where we are producing a wide range of food to showcase the equipment we have.
FINIC 3: We have always said it is better for us to make use of what we have until we get what we want. And if you look around in terms of what we have, you will see that we have a lot of palm trees and palm nuts in this country especially in the areas that we operate. In addition to that, we also have an abundant supply of elephant grass and the elephant grass becomes a menace for causing wild fires during the dry season. So FINIC 3 is a concept that we developed for researching into technologies with the aim of developing what we have, I mean the raw materials that are freely available to us in our country. For example, we are converting palm nuts into vegetable oil which we in turn process to get bio diesel. As a result, all our energy needs are met by the fuel that we produce. And then we are also researching into simple technologies that would help rural settings to engage in dignified labor. This is important because if we want to attract people to the agricultural sector, we have to find a way to reduce intensive manual labor by making available to them basic equipment that would mitigate the pain of manual labor. In other words we have to gradually mechanize the process of agriculture to get people more attracted to the sector.
At FINIC 4 also, we plan to establish a workshop there in Bo because we feel obligated that if we are supplying machines in the Bo District, we should have a presence there that would be close enough for us to adequately serve the people using our equipment when they need repairs that they are unable to handle on their own. This is the reason why we established FINIC 4 to serve the needs of the people. Although we are struggling at the moment to get it going the way we would like to do, yet we are there and serving the purpose as we intended. We are helping to service the machines used by our customers and we are also doing sales of the machines we produce at the workshop. So it serves both as a sales center and a place where our customers come for service when they have problems with their machines.
AAM: Tell us about the various machines that you have manufactured in your factory and explain the functionality of each machine.
Melvin Kamara – Let me start with the palm oil processing machine. Palm oil processing in Sierra Leone especially and in Africa generally is so labor-intensive that people who are engaged in the cultivation of oil palm are finding it very difficult to break even because of the drudgery associated with it. So we manufactured a machine, a mini plant that we call Palm Oil Processing Plant, with a capacity to produce 400 liters of palm oil per day; that is the equivalent of 2 barrels of 200 liters each. It is a mini plant comprising of four main components: one is the digester. The digester performs the function of crushing cooked, boiled or sterilized palm fruits, breaking the oil bearing cells so as to increase the chances of recovering oil from the fruits. The same digester does washing and separation of nuts from the sludge that contains the oil. Then we have the clarifier. The clarifier is equipment that removes oil from water, and that follows a process by which heat is being applied. We have the palm fruit thresher. The thresher is very important in this mini plant because threshing traditionally requires one to have an axe or a machete to cut the spikelet that holds the fruits together in order to separate the fruits from the bunch. With the thresher we can put 4 or 5 of these bunches of palm fruits into the machine and in less than two minutes, all the fruits would have been struck off and separated from the bunch. The bunch would flow from one end and then the fruits flow to the other end. Then we have the sterilizer. The sterilizer is where the boiling actually takes place. We call it sterilizer because it is during that process that all pathogens are killed, that is disease causing organisms are killed so that the palm oil would be sterile for human consumption. The main function of the sterilizer is boiling but there is a big difference between our own sterilizer and the one traditionally used by local farmers for palm oil production.
The traditional mechanism involves putting a lot of water into a barrel and then they fill the barrel with the palm fruits. It would take the whole night doing the boiling. What we have done with our sterilizer is to make use of steam. We constructed the sterilizer to have a cavity where water is boiled and turned into steam and this steam rises to facilitate the boiling of the fruits within a short time. This method is far better than the traditional method.
Let me now come to rice processing. Five years ago or prior to that, all rice mills in this country were imported; but today, we thank God we are now producing rice mills in Sierra Leone.
AAM: Are there any other competitors in the area of manufacturing rice mills in Sierra Leone?
Melvin Kamara – Yes, absolutely there are other competitors. However, these competitors are not indigenous companies. These are representatives of manufacturers mainly from China and other Asian countries generally. But the advantage we have is that we know our people and the technology has to be owned. If we know our people and we know what they want, then in designing machines, we would be better placed than the Asians who are not in touch with our people. This is the advantage we are utilizing to try and win over the market.
AAM: Are you saying that people are coming from Asia to set up their plants or factories in Sierra Leone and they are also involved in manufacturing these rice mills locally?
Melvin Kamara – No. Absolutely not! They are not involved in any manufacturing locally. They are bringing in prefabricated components and assembling them here. In fact in some cases they are not even doing any assembling at all. They are bringing in ready-made machines from abroad loaded in containers and then take them out and put them on display. In actual fact they are doing distribution for Chinese or Indian manufacturers and not assembling the machines here locally. So far we have two Chinese business people doing that. We also have other nationals of Lebanese origin engaged in the same business of bringing in the equipment and distributing them. But the unfortunate thing is that for some of them, they do not have a presence here by way of having a place where people can go and buy the spare parts for their machines. Also, they do not have any technicians that they could dispatch to areas where their machines are being used to do repairs on their machines when needed by their customers. That is a big difference from our own company, and the fact that we are an indigenous company owned, operated and managed by a Sierra Leonean.
AAM: So what more do you have on the rice mill?
Melvin Kamara – The rice meal is multi-modal in the sense that it does coffee as well. All what you need is to change the seeds from rice to coffee and it will get the job done. It works even better for coffee than for rice. We have the Rice Destoner. You know the rice locally produced here in Sierra Leone is contaminated with a lot of stones. This contamination takes place mainly during post harvesting activities when farmers are drying their rice products. The drying takes place on the bare floor on street corners and road sides or on mats and, farmers also use stones to scare creatures away from the rice. During this process, the rice is contaminated with a lot of stones. So the machine we have manufactured that we call Destoner is capable of removing every tiny bit of stone from the rice. The good thing about the Destoner is that it is not electrically operated so it does not need electrical power to run it. It has a simple gasoline engine that operates the machine which means it can be used anywhere in the country, even in the remote villages and it works very well.
I am moving now to cassava processing. We have designed a cassava grating machine. You know the cassava tubers have to be grated, that is crushed into small plates so as to facilitate the garification of the cassava.
AAM: Mr. Kamara, that word “garification.” Was that a word you coined yourself? Because frankly speaking this is the first time I have heard that word. It appears to be something like a coinage, is that so?
Melvin Kamara – Well, sort of. You know if one is in this business for as long as I have been, one tends to be creative with certain usages. Garification simply means the process of converting cassava into gari which is now the second staple food in Sierra Leone after rice. So to garify the cassava we need to turn the tubers into flakes and then we press the flakes through the water to remove the starch and then we begin the garification process by applying heat. We have been able to design a machine that does the grating with the capacity to grate two tons of flakes per hour and the machine is made of purely stainless steel. Stainless steel is expensive but when it has to do with hygiene, it is the best option for us. We have also designed the hydraulic press which has the capacity to do 200 kilograms of cassava flakes in one hour. This means that a batch of cassava flakes is 200 kilos and for every one hour, the hydraulic press will remove water from one batch. We also have the roasting plant as a component of the cassava processing machine. The roasting plant has a central revolving unit which ensures that each portion of the bowl that holds the cassava flakes is torched and stirred, and in the process the cassava flakes would be evenly heated to facilitate the garification process.
We have a machine for palm nut cracking. Palm nut cracking traditionally is a very labor intensive work. For example, 180 kilograms of palm nuts would require seven working days for somebody to sit down and crack those nuts one after the other. We saw this as a need that we should address to alleviate the pains of nut cracking by farmers. As engineers and technicians, we designed a machine for palm nut cracking that can do the work that a farmer does at nut cracking for seven days in only four minutes, and it has the capacity to crack two tons of palm nuts per hour. This machine is really very effective. We have also developed a system which had been in use before although not well established, and that is the separation process. The separator is a mechanism that separates the nut shells from the kennels. We have not yet made a mechanical separator but we have so far adopted the clay back method using scientific principles of density. Density of water if not mixed would be higher than the density of the kennel. So, if you just put the kennel into the water, it will sink; but if you mix the water with clay, you make the density of the water and the kennel to be the same. And then when you pour the kennels and shells into that mixture, the shells which are heavier will sink to the bottom and leave the kennels to float to the top so that we are able to scoop out the kennels using a basket. We have propagated this method in many villages in the Koya Chiefdom where we have a presence.
AAM: Do you have a method of processing these kennels into some form of oil such as nut oil?
Melvin Kamara – Yes, we use the “wet method” to process palm kennel into palm kennel oil. There is also the “dry method” which functions like an expeller. We put the palm kennel into the expeller and it presses the oil out and expels the cake on the other side. However, the expeller is very difficult to manufacture simply because the kennels are not friendly to metal. There are usually some shells mixed with the kennels and these are very abrasive to metal so we find it very difficult to manufacture one that can be durable. As a result, we prefer to use the “wet method.” With the wet method, we use the hammer mill to crush the kennels into powder and we put the powder in a mixture of water and bring to boil. After 30 or 40 minutes of boiling in intense heat, the oil will float and then we take the oil out and discard the chaff which is the byproduct. So in sum, we have the palm nut cracker which cracks the palm nuts, and we have the separator which separates the nuts from the shells, and after separating then we do the oil processing which requires us to do crushing of the kennels with the hammer mill which is a separate machine. And thereafter, we bring the crushed kennels to boil and then the oil will float. We are using two sets of machinery here. The palm oil processing mini plant is different from the machine we use to process palm kennel oil.
AAM: We are still on machinery, so do you have any others?
Melvin Kamara – Yes we do. I was talking earlier on about the processing of foodstuff. For example, in the processing of palm kennel oil, we need to dry the kennels after separating using the clay back method. We have to dry them sufficiently enough to make the oil bearing shells to be ruptured through the application of heat. This is what helps us to recover more oil from the kennels, so that at least we are able to recover 40% of oil to the weight of the kennel. To be able to get that level of oil, we need to dry the kennels sufficiently. This drying was a real problem for us. However, at FINIC 3, our Rural Technology Innovation Center, we realized that a lot of heat was being wasted by the generator that we used to power the hammer mills. What we did was to use a combining system. We tapped the exhaust waste through a heat exchanger system which exchanges heat with forced air or cool air, and by the time the cool air leaves the heat exchanger, it would have been heated and then it goes into the cabin containing the kennels where the drying process takes place. This means that we are effectively using the generator to improvise a method of drying the kennels. That technology is what we are using at FINIC 3.
We are extending that technology to the drying of other foodstuff, for example, the production of pap. Drying also is a problem for other foodstuffs especially in the raining season. During the rains the sun is unpredictable. The sun shines and in less than thirty minutes you see something totally different. So what we have done here is that we have built a small glasshouse and it is going to be powered by the same system although it will be different. This time we are making use of a small dedicated engine that will be powering the fan, and this fan will be forcing air through a heat exchanger which will cause hot air to be generated into the glasshouse. So if you put pap in the glass house for example, or other wet foodstuffs meant to be dried, the entire content would have been dried in less than 2 hours. This is another mechanism that we are using for drying. The use of the glass is deliberate because we want to use the equipment during the dry season also. Because the dry season here is very hot, and when we expose the glass to the hot burning sun, the scientific principle is the greenhouse effect whereby the sun would flash into the glasshouse and the hot gamma rays would be trapped and would remain there. This will keep the cabinet very hot for an extended period of time. This means that during the dry season, we have no need to use a machine or a generator for drying foodstuff because the sun would be enough to provide heat in the glasshouse and the glass will protect the foodstuff against dust or disease causing organisms.
Another machine we have manufactured is the Condom Vending Machine. I think we are the first in Africa to have designed and manufactured a condom vending machine. Sierra Leone should be awarded a prize for that venture.
AAM: So you mean one can put the local Sierra Leone currency, the Leone, into the Condom Vending Machine and it would vend a condom out?
Melvin Kamara – Yes, exactly; and the good thing is that the machine is not electrically operated but a purely mechanical system. It operates without the need for battery or other forms of power and so it is always functional, blackout or no blackout. You know buying a condom is stigmatizing so a lot of people still shy away from going to the stores to buy a condom. We were contacted by the United Nations Population Fund (UNFPA) in 2002 and they asked us to design a machine that can sell condoms. Three months later we presented them with a prototype. That prototype was designed to dispense one condom at a time. They were very happy about it and they thought we should also be able to do a machine that would dispense a whole packet of condom at a time and they asked us to design such a machine. In two months we came out with the design that dispenses a packet containing 3 condoms. It works by inserting two coins of 100 Leones and press the lever and a packet of condom will pop out.
AAM: So where have you installed all these Condom Vending Machines?
Melvin Kamara – These machines were intended to be installed in guest houses, hotels and all entertainment centers frequented by young people. We had a project with the HIV and AIDS Secretariat for these machines to be installed in all those entertainment centers in the country. However, the project did not go well with the type of management the Secretariat then had, but we are planning to revitalize the project because they now have a new management system. We also plan to work with CARE Sierra Leone because they are also engaged in the campaign to reduce sexually transmitted diseases in the country. We have written to them and we are waiting for their response on that. So at the moment the machines have not yet been deployed to those centers where we intended to use them.
We have the Fruit Juice Extraction Machine. In Sierra Leone in a given season, we have plenty of mangoes that we cannot really add value to because they just grow fast and most is wasted. So we thought we should design an extraction machine and we successfully produced one which can extract juice from 1 ton of mangoes in 1 hour. And the machine does not only do mangoes, but it does pineapples too. And the beauty is that we do not have to peal the pineapples or the mangoes. For the pineapples we just chop off the crown and the stalk, cut into slices and then throw them into the machine and it will extract the juice from the pineapples and expel the chaff at one end and the juice at the other end. We believe this machine will revolutionize fruit processing in Sierra Leone. At the moment, fruit juice in this country is mainly imported because people do not have a means of extracting the juice from the fruit in a hygienic way. And added to that also, we produced a pasteurizer. A pasteurizer is a machine that fights pathogens, disease
causing organisms or germs in the juice before bottling it so as to make it safe, taste better and last longer.
AAM: Which of your machines or set of machines that is more popular or widely used by the farmers around the country?
Melvin Kamara – The cassava processing machine is very popular and the rice milling machine is also becoming popular. The simple reason is that these machines are very strong and durable. They may not look shiny, fashionable, elegant or aesthetic but the most important thing for the people is that they can perform well and they are durable. As for the aesthetics and for those who are concerned about looks, I would say to them that the beautiful ones are not yet born. However, with time, we are always striving to improve on our products and we have seen significant improvements in our machinery over the past sixteen years we have been involved in manufacturing.
AAM: What type of relationship does FINIC have with its customers in terms of technical advice or support, equipment maintenance and usage?
Melvin Kamara – The relationship is very good. First of all, when we are designing the machine, we involve our would-be customers to have a say in the design. The machine is not only for it to function, but for it also to be user friendly. And so when we make it user friendly involving those that are going to be using it, it would be eventually owned by them. This is where we are relating very well to our users because we make them feel as being part of the process. So when we design these machines, we take them to different communities and allow the people to use them for a period of time. And each community will provide us with feedback as to the functionality of the machine and whether it is user friendly. From these tests we obtain a data and then finally manufacture a machine that the people are happy with and like to use. This is how we find our relationship with the people very strong. Secondly, we make spare parts available. Like I said before, customers who buy their machines from merchants who don’t have a presence in the community have problems getting spare parts and technical support. But for us, we have a presence and we have trained technicians. If something happens to a machine that they cannot take care of at the field level, they give us a call and we dispatch a technician immediately. We have a motorbike ready for that. If they need spare parts they come to us. Whatever spare parts they need we always have it to sell to them. That has cemented our relationship with our customers and this is where we are winning over our competitors from Asia.
AAM: You have indicated your intention to expand into biomass energy production in Sierra Leone. How did you conceive this idea?
Melvin Kamara – Yes, to make use of what we have to get what we want, we need to add value to what we have. Looking at what Sierra Leone has in terms of biomass, it is a lot. We have abundant supply of elephant grass all over Sierra Leone. And this elephant grass, instead of helping us, instead of us making good use of it, we allow it to destroy us. This dry season that we have just seen this year alone witnessed a lot of destruction and loss of life caused by fire that is propagated by dry elephant grass. I think that if we are talking about energy, we should not be limited to fossil oil alone. As a matter of fact fossil oil is causing us damage because it is causing changes in the climate that is creating a lot of problems for farmers. By fossil fuel of course I mean diesel, petrol, etc.
Elephant grass on the other hand is a major source of energy and it will not harm us if we make use of the heat it generates while it is burning. But if we allow it to burn widely, it destroys the farms, houses, forests and even lives. But if we can burn the elephant grass in a controlled fashion or using a controlled methodology, then it becomes beneficial because the energy it releases can be utilized. And then at the same time, if it releases any carbon dioxide into the atmosphere, it would be re-absolved again when the elephant grass grows. The elephant grass is burnt down, then it grows, and in the growing process it adsorbs the carbon dioxide and becomes carbon neutral. This concept is what brought us to what we call the Biomass Gasifier. The gasifier is a plant that controls burning of biomass in a fashion that would allow the explosive gases like hydrogen and methane to be extracted then channeled for either running an engine or to power a generator or for the drying of foodstuff. We are given the impetus for this project by the availability of elephant grass and we are supported by the United Nations Industrial Development Organization (UNIDO). UNIDO sent me to India for one month to participate in a training program for the operation of the biomass gasifier. When I came back home, I shared the knowledge and experience with my managers and they said we too can take up the challenge. This is what led us to the construction of the Biomass Gasifier that we now have here. It is designed to be using elephant grass to produce energy.
This is how it works. We need to harvest the elephant grass, crush and briquette or pelletize them. The briquettes or pellets are put into the machine for the extraction of gases. The gasifier would also strongly help in the rural electrification drive of the country. If we are talking about increasing agricultural productivity, the first thing that should come to mind is energy. Energy should be the first thing to think about even before food security.
Energy security should at least precede food security otherwise we would be missing the point. So the biomass gasifier can provide an excellent opportunity for young people to use it for agricultural productivity. For example, in the production of vegetables like pepper, you need to use irrigation system if you are to do it all year round. We need energy for irrigation, so if the youths have a biomass gasifier where they can just go into the bush, cut some elephant grass, put it into the machine and the machine converts it to gas, the gas then is utilized by a generator and this helps to power a small scale irrigation system. This system will help us to increase agricultural productivity and would be very instrumental in the electrification of the rural communities.
AAM: Are you saying that the biomass gasifier is also a source of electricity? If so, what kind of power are we talking about? I mean what kind of kilowatts or electrical power that can be generated from a biomass gasifier?
Melvin Kamara – The one we have targeted has a 32 kilowatts power capacity, and that is able to give electricity to at least 400 households just for lighting. However, the biomass gasifier can be designed to generate as much as 1 megawatt of electricity. It all depends on size and the ability to have the equipment that would be able to extract and cool that magnitude of gas. But it is possible.
AAM: Give us some details of what entails the process of biomass gas production and its uses. I believe you have covered this to some extent but how does it compare to other sources of energy such as petrol, diesel or ethanol?
Melvin Kamara – For ethanol, you will require a great deal of energy to process it because we need to crush the sugarcane for example, press it and apply a heating process to get the ethanol produced. But for the biomass gasifier, we use energy to do harvesting and crushing, but the raw material is readily available for free and we do not need to grow a sugarcane plantation before we can produce that form of energy. This is a big difference. The other important difference between biomass gasification and other forms of fuel is its carbon neutrality. When we burn elephant grass, it releases carbon dioxide into the atmosphere, but it also reabsorbs it again by the same elephant grass when it grows. With regards to petrol and diesel, when once they release carbon into the atmosphere, they do not have the capacity to reabsorb the carbon. In that sense they are non-carbon neutral. Once released, the carbon goes into the environment and helps create environmental damage. For that reason alone we would prefer the biomass gas for our source of fuel even if it entails a higher cost of production. However, the good thing is that biomass gas is actually cheaper than the other forms of fuel we mentioned. At least every 15 kilograms of biomass or elephant grass would be equivalent to a gallon of diesel fuel, which is 4.5 liters. This means that it is better to use elephant grass in terms of cost than to use diesel or petrol. The biomass technology is a system that we can also install in vehicles and it would run the vehicles very well just like the fuel that is now widely used. As a country, we have to develop a method of using biomass technology for fuel production in order to address the energy problems we have in Sierra Leone. If there is fuel crisis in the world, we would be better off using our elephant grass for fuel than waiting for imported crude oil from overseas. As a matter of fact, we have appealed to the government to support us to develop this technology. We intend, before the end of this year, to start a rural transportation system that would be making use of three-wheel vehicles purely powered by elephant grass. The youths would go to a collection point, pay and collect a bag of briquetted or pelletized elephant grass which they will put into the tank and drive off. It would be that simple. Our hope is that this project will kick off in the not too distant future.
AAM: Given the fact that the majority of your customers live in low income farming communities, what plans does your company have to make its products more affordable?
Melvin Kamara – Affordability is really a very big problem for us. We have to try and strike a balance between affordability and the strength and durability of the machines we produce. Sometimes it is very difficult to get this balance because when we try to make the machines affordable, we would be tempted to use inferior material in its production and at the end of the day we have to take the blame for it. But if we make our machines sturdy and robust, we spend more money at the backend in cost of production and we have to consider appropriate pricing to recover that cost. So it is very difficult to strike the balance between the two. Take for example the stainless steel cassava grating machine. Stainless steel is very expensive but we prefer to use it to eliminate disease causing pathogens from our finished food products. If we use stainless steel to produce a cassava grating machine, the average Sierra Leonean would not afford it. So in order to strike a balance, we make use of galvanized steel plates. It is not stainless but it would take some time to become stained and that affects the durability of the machine. But any how the machine with the galvanized steel plates would be cheaper than the one made from stainless steel. This is how we try to strike a balance. However, it is very important that our machines are affordable to make them competitive with those imported from Asia.
AAM: Is there anything else you wish Africa Agribusiness Magazine and global venture capitalists interested in investing in the agricultural sector to know about the operations of FINIC Industries and your plans for expansion?
Melvin Kamara – I want the venture capitalists out there to know that this is a country with an abundant supply of biomass elephant grass. We all talk about diamonds and iron ore. When we talk about the economic development of Sierra Leone today, the first companies people will think about are African Minerals and London Mining. But it is also very refreshing to know that elephant grass can bring us a lot of money just as gold, diamond or iron ore. A ton of elephant grass can be sold for as much as $100 in Europe or America. So my message is that I want to team up with potential investors that would be ready to do this business with us. Harvesting of elephant grass, briquetting it and putting it in containers bound for energy production plants overseas is a huge business. It can be processed into many forms of energy for use in the homes for heating, for use by industries to power equipment such as boilers, and for many other uses and applications. I would like to have investors join with me in this business.
Here at home, biomass gas can be utilized very effectively for replacement of charcoal in our kitchens. Charcoal is causing huge environmental damage in this country. So if we can briquette elephant grass, it can also be used in our stove for cooking. So the biomass elephant grass business has a huge market not only for exporting, but also for local consumption here at home. We also like to welcome investors to come and invest in biomass gasification in Sierra Leone which we can use to engage in a wide range of agricultural activities such as irrigation, tilapia fish farming, cat fish farming and vegetable gardening for marketing to the United States and other countries in Europe. Rural transportation and electrification system is another huge potential. We have a plan to design three-wheel vehicles using biomass gas as its energy source to assist farmers to get their products to market centers around the country. These are the areas where we would like to team up with potential investors to help us expand and improve on the technology that we have.