Uganda - From local product to global brand.
Hundreds of miles away from West Africa's co- coa heartlands, Ugan- dan entrepreneur An- drew Rugasira looks over a row of fresh chocolate bars in a classy shop in Kampala's up- scale city suburb of Lugogo. It is part of the effort to add value to one of Uganda's emerging key agricultural commodities.
The demand for chocolate is increasing rapidly, particularly among the Ugandan middle class, as in many other emerg- ing markets. Ugandans are buying chocolate bars previ- ously considered an unafford- able luxury.
But with the bulk of these bars imported from as far away as Switzerland and Brazil, Ru- gasira hopes to succeed where most African entrepreneurs have failed -- delivering a final consumer product to the local and international market.
"No one should ever tell you that your dreams cannot come true," says the 45-year-old. "The journey to add value to our fin- est Ugandan cocoa has begun."
Rugasira, who has managed to break out of only selling cof- fee beans, now aims to have his chocolates on supermarket shelves in the UK, the US and South Africa.
His coffee brand, Good African Coffee, has already performed well internation- ally and is available in more than 500 stores in Africa, 700 UK supermarkets and is sold online in the US.
And just like the coffee, the Good African Chocolate brand could be another big thing for the entrepreneur. It is available in three flavours so far and can be found in dozens of shops, supermarkets and stores across Uganda.
Rugasira's efforts to break into international markets be- gan in 2003 when he founded Good African Coffee Com- pany. The company has since developed a supply network of more than 15,000 coffee farm- ers. It has also established 17 savings and credit cooperatives that have enabled the coffee- farming families to earn in- come and educate their chil- dren. In Uganda's western district of Kasese, this has lifted many out of poverty.
Farmers there now earn more than three times as much by selling coffee marketed by Good African Coffee because these coffee beans are certified and are of a much higher qual- ity those previously farmed.
Rugasira says that African farmers should start seeing agriculture as a source of in- come. "We need to find ways to add value and conserve our produce rather than growing produce to feed our families," he says. "Also, the youth need to be taught that they can be- come rich from agriculture."
The centre of his coffee, and now cocoa, revolution is the Rwenzori Mountains, along Uganda's western border with the Democratic Republic of the Congo. In this high-altitude farming region Good African Coffee works with local small- holder farmers.
It has not been smooth sail- ing as he has faced some major challenges in seeking to turn a local product into a global brand. British supermarkets Tesco and Sainsbury's were ini- tially reluctant to sell his pack- aged coffee, voicing fears about demand in a market dominated by international giants. With cocoa processing, Rugasira is taking on yet another challenge -- against all odds.
According to banking group Ecobank, in recent years co- coa processing has encountered strong headwinds, compelling local companies to close sev- eral plants in more-developed markets such as Nigeria and Ghana. The woes are partly at- tributed to cocoa bean shortage amid stiff competition from the more resilient international grinders.
The sector's woes have been exacerbated by the recent shortage of beans and sky- rocketing global prices. Smaller producers have difficulty find- ing beans for processing as shortages have pushed up local prices: producers in some West African countries have been forced out of business.
High quality, high prices
But in Uganda, the beans are available -- this season, output is projected to rise to 25,000 tons from around 20,000 tons last season, according to John Muwanga Musisi, a coordinator from the agriculture ministry's Cocoa Seedling Project.
The government started the Cocoa Development project under the Ministry of Agri- culture, Animal Industry and Fisheries in order to spur pro- duction in the country, where the crop is the country's fourth largest foreign exchange earner, according to the Uganda Ex- port Promotions Board.
While prices for nearly all commodities fell last year, cocoa rose about 10%. It was the best performer in the S&P GSCI commodity index.
According to research firm Euromonitor International, last year global demand for choco- late rose 0.6% to a record 7.1m tons as a result of a 5.9% leap in demand in Asia, while the International Cocoa Organi- sation estimates indicate that cocoa production fell 3.9% to 4.2m tons.
Uganda, being a landlocked country, also faces constraints such as having to pay the ex- tra costs of transporting cocoa beans to the international mar- ket via the sea port of Mombasa in neighbouring Kenya.
"Uganda can only compete favourably with leading cocoa- producing countries like Cote d'Ivoire by ensuring [it pro- duces] high-quality cocoa that fetches high prices. This will compensate for the transport costs because quality beans give the country good prices on the international market," says Musisi.
According to the 2014 Africa Progress Report, agricultural productivity in Africa is still well below the global average. The continent still spends an estimated $35bn on food im- ports, which is attributed to outdated farming methods and the lack of value addition on agricultural produce.
But for entrepreneurs like Rugasira, the continued quest to add value to locally sourced agricultural products spurs them on, despite the challenges.
"It's one step at a time, slow- ly but surely, we shall be there one day," he says. "We have al- ready changed perceptions and we hope to keep touching many more souls."
The youth need to be taught that they can become rich from agriculture.
[c] Copyright IC Publications 2016 Provided by SyndiGate Media Inc. ( Syndigate.info ).
|Printer friendly Cite/link Email Feedback|
|Publication:||African Business (Al Bawaba (Middle East) Ltd.)|
|Date:||Mar 31, 2016|
|Previous Article:||Nigeria - Reinventing a $150bn economy.|
|Next Article:||Kenya - A complementary way of doing business.|