Naturipe - Tanzania

Meet the Entrepreneurs

NatuRipe Kilimanjaro Ltd (NKL)

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Agribusiness Entrepreneurship naturipe kilimanjaro ltd (nkl)

CONTACT INFORMATION

An innovative agro-business manager strives conquer the domestic market

Dar es Salaam, Tanzania +255 22 2151457

fatma@natureripe.co.tz

Fatma Riyami, Founder and CEO

THE BUSINESS When Fatma Riyami started growing mangoes as a hobby in 1992, she never thought that years later she would be managing director of a successful agro-processing company.

What started as a small family project turned into a profitable business with 34 full time employees and an annual turnover of USD520,000. Fatma Riyami and her husband had the idea to begin growing mangoes after observing Kenya´s profitable mango production and commercialization market, and felt that Tanzania offered the perfect environment for developing mango production, as well as a great opportunity for her to generate income. She started by planting mango trees on her farm land 42 km outside of Dar es Salaam. In the beginning, she sold her fresh crops to local markets, but her main goal was exporting her product, as the export market would allow her to sell at higher prices. In 2000, her production rate had grown to such quantities that Fatma Riyami decided to register the company, go into business full-time, and start exporting the mangoes from her own production and from the outgrowers she started to work with. As she could not get financing from a bank, family members lent their support by putting private capital into the business. This helped her launch her export business, starting by selling mangoes mainly to the Middle East.

However, producing high-quality mangoes for export brings several challenges: Fatma Riyami had problems with the quality of the mangoes and the growth of her plants. Insufficient infrastructure, such as a lack of cooling facilities and unreliable transportation, made the export business difficult and expensive. At some point, the challenges became too great and Fatma Riyami decided to change her company’s strategy from an export-oriented raw material producer to an agro-processing business for serving the local market. With the experience in trade gained through the past years, she calculated that processing and adding value to agri-products would benefit her more financially. In 2008, she stopped exporting and started diversifying her products for sale solely within the local market. Apart from growing other crops, Fatma Riyami began roasting and packaging cashew nuts and peanuts, as well as jarring and selling honey from local beekeepers. This way, the business managed to avoid the high costs of exporting, while increasing revenue through the diversification of value added products.

Today, NatuRipe offers a broad product palette of seven production lines to its customers: mango pickles, mango and chili-base sauces, roasted cashew nuts and peanuts in different packaging sizes, honey, and cashew nut candy bars. Fatma Riyami had the idea to produce the

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candy bars when she noticed that in the sorting of whole cashew nuts for packaging, the broken nuts were being thrown away; in order not to waste the raw material, she came up with a new product idea and is constantly thinking about further diversifying her products. The newest product line to be launched will be jarred fruit jams. Sauces, pickles and jams are filled in jars; nuts and candy bars are packed in plastic packs. The company sells its products to supermarkets in six regions of Tanzania, as well as to hotels, restaurants and other corporate clients. The business has grown to a size where the current production facilities in Dar es Salaam have become too small to accommodate it. NatuRipe is in the process of building a new factory on its farm land, but is currently in search of assistance for acquiring adequate machinery, and for financing this project.

ECONOMIC IMPACT CURRENT IMPACT

34 full time employees

on the farm (13), in the nursery (3), in the office (5), and in the processing factory (13)

Seasonal workers: 15 for the nursery Works with more than 450 outgrowers and small-scale cashew nut processors

Annual turnover: USD520,000 in 2013 POTENTIAL IMPACT

(by 2018)

70 full time employees Sourcing from 800 outgrowers and small processors 34% increase in production and two new production lines Sales to African markets and increase client base in Tanzania

Increase of annual turnover: USD1,9 million

THE MARKET OPPORTUNITY NatuRipe‘s main target for the time being is the national market, though Fatma Riyami sees potential in the future for returning one day to the export market. Currently, the business is busy selling its products to 41 supermarkets, five restaurants/hotels, and 30 other corporate clients in six regions of Tanzania. In Dar es Salaam, the business has its own fleet of vehicles, and uses buses for transportation to other regions. Fatma Riyami sees huge potential for increasing the client base all over the country, as there is a rising demand for high-quality, locally produced products. To meet this demand, she would have to invest in large-scale marketing and sales operations, increase production, and improve product packaging. At this time, she does not have access to sufficient financing and technical know-how for this level of investment, though through further professional assistance and financial support, she feels the company can expand rapidly throughout the nation.

NatuRipe would eventually like to resume its exporting activities, this time including the newly developed processed products, as they see high potential for success abroad with the new product lines. Fatma Riyami sees the African market as a booming business opportunity, especially South Sudan, the East African Community markets, Zambia, and DRC, and extends that vision to Europe and the Middle East, where she exported mangos in the past.

THE CHALLENGES ACCESS TO MARKETS

NatuRipe would like to increase its client base in Tanzania, but in order to do so the company would need professional assistance to launch a professional marketing campaign, based on a thorough market analysis. At the moment, NatuRipe is only advertising on a small scale in newspapers and on flyers, though Fatma Riyami is also planning to start working with supermarkets to do promotions, so that clients can test the products.

ACCESS TO FINANCE

One of the main challenges for NatuRipe is access to adequate financing for long-term investments, such as new machinery for processing, and to finish construction of the new factory. They are looking at USD2.3 million for the necessary investments.

At the same time, the business needs working capital to be able to buy more products from outgrowers in order to increase production and sales.

Currently, NatuRipe is limited in the amount of raw material they can source as their costs are being covered by private capital from shareholders in the business.

ACCESS TO ADEQUATE PACKAGING According to Fatma Riyami, it is difficult to find adequate packaging materials that suit her business’s needs, both from within and outside of Tanzania. For example, NatuRipe has to import the jars for mango pickles, but only large quantities can be imported, and that quantity exceeds the number of jars needed for current production. They also have to buy three times the amount of plastic packets they use for nuts that they would need for one year. NatuRipe sells four varieties of cashew nuts in different sizes, and thus needs different plastic bag sizes, which leads to a huge amount of packaging materials the company has to buy. For candy bars, the packaging stock is enough for at least four years of production. In order to save money on packaging material, the bar code and product names are currently being printed on stickers which are then placed on the plastic bags. Fatma Riyami would like to print the brand and product name as well as the bar code directly onto the plastic for a more professional look, but she would have to purchase even bigger quantities of material, far too much for her current production capacities.

ACCESS TO TECHNOLOGY AND KNOW-HOW Another concern is how to obtain access to adequate machinery for processing, and the technological know-how to improve the quality of the products so that they reach international standards. This knowledge and access is lacking, and despite Fatma Riyami´s best efforts through her own research and support from the Tanzanian Small Industries Development Organization, the company will need professional advice for both concerns.

DEFINING A BUSINESS STRATEGY NatuRipe is in need of assistance to help develop a professional longterm business strategy. Currently, planning takes place on an annual basis, but Fatma Riyami would like to develop a fiveyear business plan to base her operations on a sound strategy that leads to sustainable development of the company.

POTENTIAL BENEFITS OF AN AIC For Fatma Riyami, the creation of an Agribusiness Innovation Centre in Tanzania would be hugely beneficial and would help her overcome the challenges she is facing in growing her business and in turn, creating a higher economic and social impact in her country.

THE AIC COULD ASSIST NATURIPE IN: Enhancing its networks and attracting long-term investment/working capital opportunities Receiving technical training to improve the quality of processed products and packaging process Getting professional advice on where to procure adequate machinery, improve networks for joint packaging sourcing, and co-packaging opportunities Getting the technical assistance and tools for implementing a market analysis, including pricing studies to strengthen her competitive position on the market, researching distribution channels, creating an adequate marketing strategy, and developing a sound long-term business plan

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