Uganda's red hot chilli trader
In 2007, Pamela Anyoti Peronaci decided to set up a business, exporting bird's eye chillies from Uganda to Europe. "My aim was to export just one container, to give me capital to put back into the business so that I could expand," she says. From small beginnings, working with 15 widows, whom she trained and supplied with inputs, Anyoti Peronaci has developed a contract farming operation which, in 2010, had 1,250 outgrowers and exported 24 tonnes. Her target for 2011 is to be sourcing chillies from 3,000 farmers, to serve a market which she believes can easily reach 100 tonnes per year.
Aggregation of smallholder produce is at the heart of her business model. Her suppliers cultivate, on average, just half an acre of chilli each, from which they can hope to harvest around 160 kilos. But by buying from groups, rather than individuals, her Sunshine Agro Products company is able to pay a very competitive price - between US$1.70 - US$2 per kilo - whilst covering its own costs and earning a profit for the business.
Anyoti Peronaci's success - which saw her recognised as one of Africa's top new entrepreneurs at the 2010 EMRC Agribusiness Forum in Kampala - has been achieved through a very sound business plan. But she acknowledges that she is not a typical entrepreneur: she has a Master's degree in Agricultural Economics, has worked for FAO's Policy Division and trained at the World Trade Institute in Bern, Switzerland, while also spending time at an international commodity trading company in Belgium.
From financial necessity, she started her business from a small base. Some capital came from her own savings, but she also encouraged donors to fund training of growers and provision of seedlings, and invited a private company to be her business partner. Entrepreneurs who lack sufficient capital will struggle, she says. "Nobody wants to come and finance start ups. The bank won't do it unless you have collateral. You have to have money to sustain you until you make your first sales." Only after two years of successful business will a trip to the bank be worthwhile, she claims.
Choosing the right management team has also been key. You need staff with "the right type of mind set, who understand the importance of honesty, commitment and hard work," she says. She now has seven permanent staff, who work 'fantastically well' and fully understand the business. And she is keen, not only to expand her number of outgrowers, but also the range of crops she exports. The company is currently multiplying seed, in order to introduce ginger cultivation in late 2011. She is also starting cocoa production, aiming to work with 12,000 farmers who currently have no other source of income. Her interest in cocoa prompted Uganda's President Museveni, Guest of Honour at the EMRC Forum and ever-alert to a good business opportunity, to ask for her card.
The recognition gained at the Kampala Forum stimulated interest among several financial institutions, including Rabobank, Swiss Contact (Swiss Foundation for Technical Cooperation) and Root Capital. Anyoti Peronaci has just signed a Memorandum of Understanding with Swiss Contact to co-finance the training of agronomists and farmers in the propagation and production of high yielding varieties of cocoa. Meanwhile, Uganda's Minister of Agriculture is keen for Sunshine to start up similar grassroots agri-businesses in other parts of the country.
Anyoti Peronaci is keen to also point out what she has learned from the Forum, such as how to strengthen her business plan in order to generate new finance. And she is determined to show that smallscale farming does have a future, if it can adopt high yielding crop varieties, improved farming methods and more organised approaches to marketing, such as the formation of farming groups.
A leading point of discussion at the Kampala forum was whether food insecurity should be seen as a tragedy or an opportunity. Anyoti Peronaci is adamant that cash crop agriculture, while not directly putting food in people's mouths, achieves just as much good by putting money in their pockets, so long as farmers can earn a fair price for their crops. Fifty per cent of her outgrowers are women, and she estimates that her growers support, on average, eight family members each. As for the wider opportunities from agricultural trade, she is equally upbeat - citing the recent increases in food and commodity prices.
"When I told my friend I was going to do this business, she looked at me and said, 'You know, I see only trouble.' And I told her, 'You know, I also see opportunities.' We were both right, but I have been proved to be even more right, because in all the troubles that are there, there are plenty of opportunities."
Date published: May 2011
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Focus on: Entrepreneurship
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