Yemi Lawal, MD/CEO of Xeed Business, returned to Nigeria to farm after working in the Telecoms industry in UK and other countries for 25 years. In this interview with Caleb Ojewale, she gives insights into her early mistakes, which others can learn from, and her plans to start producing Nigerian chocolates.
Prior to agriculture, you had 25 years’ experience in the Telecom industry, specifically in strategy and marketing. What informed your decision to venture into agriculture?
I would say I am like a lot of Nigerians who have gone into agriculture. When I started out, it was very romantic. Two things led to that decision. One of it was that I was working outside Nigeria in Zambia, Cameroun and Uganda, and I realised that a lot of my colleagues who were in Telecoms whether they were finance managers or sales people, were also in agriculture. Therefore, they have this second stream of income. So I said to myself that I needed a retirement plan, and agriculture seemed to be one of the things I believed was suitable for the long-term future.
I guess the other thing was, I knew I was going to come back to Nigeria at some point. So, whilst I was doing all this work outside of the country, I knew that I needed something to come back to. I had worked in Telecoms for 25 years and I just knew I did not want to continue in that field, because at some point I needed to be my own employer of labour. I looked at all the sectors and it occurred to me that agriculture is a space that has been neglected and we have so much resources. I think the combination of what do I do when I come back home, and seeing that there is this gap in agriculture in our nation, made me decide on it.
How long were you outside the country for work?
I worked in the UK for about 20 years, came back to Africa in 2013 and then for about 5 years I worked across all these other African countries: Gambia, Uganda, and Cameroun.
Earlier, you mentioned something about agriculture being ‘romantic’ in the beginning. What changed?
Many people that I have met ventured into agric in this sort of romantic way. I went into agriculture without doing my research other than everybody is going into it. It is estimated that Nigeria’s population by 2050 will be about 400 million. The world is growing and as I always say, there are few things every human being on earth does every day: breathing air, drinking water, eating, then other things follow. Eating is something everybody has to do. The reason why I used the past tense is because when I went into agriculture, I had the notion it is a good thing to do, but without doing the numbers.
How did you start?
I went into agriculture from the production side. I bought a farmland, staring planting, but I would be honest and say to you, I did zero commercial analysis, even though my background is in strategy and marketing. Early last year, I started thinking, what money am I going to make out of this? Then, I started doing the numbers and a lot more analysis. Then I realised that actually, agriculture is beyond the production level, which is farming. Secondly, for you to get value out of agriculture there has to be some value addition. We have so much arable land, but we cultivate less than half of it.
Someone said to me in Uganda that we have the type of land that if you put any seed there, it will grow. There is so much that we can do in Nigeria, and we are not like some countries where they have landslides, too much rain, too much drought, etc. In going into agriculture, I say to people that if I could go back two or three years, I would do a lot more analysis, rather than go in romantically. I would go in with information and insights, and I think maybe with that I would have gone a lot farther than I have today.
Can you quantify the losses recorded by not adequately preparing before venturing into agriculture?
I can’t put naira and kobo on it, but I’ll give examples of where I had losses. Remember I said I was doing cocoa when I was not in the country and I went into it thinking it is a four- to seven-year crop that does not need a lot of attention. I bought the land, planted and almost expected to literally come back in five years and start reaping cocoa as people say. But I realised that’s not true. Even cocoa needs everyday maintenance and one of the biggest mistakes I made on my farm for instance was I did not put an irrigation system, yet cocoa needs water. In estimation, I would say maybe I lost about 20 per cent of my crops as a result of that in the first year, from a four acre farmland. The other part of the education is how you prepare your land beforehand. People that traditionally do this advised us that they clear the land and just burn it. I did not do any form of soil testing etc. One year later with a lot of education, I bought another piece of land, which is six acres, and implemented knowledge of those things I ignored in the past. Comparing the new plot with the previous one, the cocoa on it is performing better than the first one. So whilst I cannot put naira and kobo on it, those are some of the examples that I mean by saying there is a financial implication. I will still do cocoa if I had to start again, but I will do the numbers and prepare for the rest of the value chain, not just planting cocoa and when I harvest, I start worrying about what to do with it.
What other crops are you currently producing apart from cocoa?
On my farm, I have cocoa, and when you have it, there has to be plantain, because it provides the shade. Addressing the previous question, one of the things we did wrong was planting the plantain like a month before the cocoa, which also contributed to the 20 per cent or thereabout loss that we had, because the shade was not enough.
So, I have plantain, cassava, and in the first year I also had maize, but I realized the return on the maize was too poor, so I stopped. This year, I am preparing my beds for vegetables as well. The logic is this: cocoa is long term, plantain is sort of medium term, cassava also is a nine-month crop, so to sustain yourself in farming, and pay for your labourers, you need something that is giving turnover regularly, and that is why we are looking at vegetables. We are looking at doing peppers, kale, and everyday vegetables, nothing too fancy. A friend recently discussed greenhouses with me, but what I do now before venturing into anything is to determine whether it makes commercial sense. I do the numbers now and see if it makes commercial sense, and not just because an idea looks good.
Cocoa remains one of our most exported agricultural goods, yet we import its refined products many times the value of the export. What are your own plans regarding that value chain?
One of the key things for me is looking beyond primary production. My involvement in cocoa is 100 per cent value addition. I looked at the value chain, about 6.6 per cent goes to the production side, another 6 per cent goes to the people doing transportation and trade, while the processing side gets about 80 per cent (of financial value) that is left.
As you have noted, that is completely gone out of the country. So, for me, what I have started doing is small-scale production by processing cocoa into chocolates, which I am excited about. When I started, I actually thought not many people do it, but I have since realised there are people who are already producing small-to-medium scale and putting our chocolate out there. The ultimate aim is to have cocoa processed into chocolate and sold locally but also regionally and then start to export internationally.
What are the challenges/limitations in achieving scale?
Part of the challenge we have is the cost of machinery to do this on a big scale. However, I am always a believer in starting somewhere; prove the principle you are promoting, prove that this works, prove that there is a demand, and then somehow you get the money to grow. Do not go looking for a billion dollars because there are companies that have already invested in billion-dollar infrastructure in Nigeria in cocoa and are not producing to capacity for different reasons. For me, it is about starting small, and then growing.
In addition, there is a wrong notion that Nigerians do not consume chocolates, which I disagree with. When you go to any duty-free shop at airports, you find Nigerians there stocking up on chocolates. The challenge though, is that Nigerian chocolate is not very popular. Today, there are at least four brands of Nigeria chocolate that have started on a small scale and what I am trying to do with this group is drive collaboration to have a bigger voice. At the moment because people are trying to do it individually, the voices are thinner, and we are not going very far.
By the way, chocolate is actually healthy and would not make you fat. The things that make you fat are what I call candy bars, which is 90 per cent sugar, ten percent cocoa. If you have proper chocolate which is 70-90 per cent cocoa, it won’t make you fat and actually has better health benefits such as antioxidants.
When will you be ready for the market?
At the moment, I am “guinea pigging” my friends and family with my produced chocolate, and have promised them they won’t get fat by eating so much of it. We started in December and now working on packaging. I was hoping that by now, we would have been in the market, but I expect by the end of the second quarter this year we would be out in the market.
QUOTE: If I could go back two or three years, I would do a lot more analysis, rather than go in romantically. I would go in with information and insights, and I think maybe with that I would have gone a lot farther than I have today