Value chain

Timi Oke’s AgroEknor transforms Nigeria’s agricultural export value chain

After oil, agriculture is the main driver of the Nigerian economy. The sector contributes approximately 30 percent of the country’s total GDP, and it represented 34.66% employment in 2020. However, the situation of the agricultural sector is a shadow of its past. There is often an account by older people of its historic export prowess in the 80s to 90s. Now, this export force has diminished. Between 2016 and 2019, Nigeria’s cumulative agricultural imports amounted to 3.35 trillion nairafour times more than agricultural exports of 803 billion naira during the same period.

In Q3 of 2021, imports of agricultural goods amounted to 789.1 billion naira while exports of agricultural goods amounted to 79.4 billion naira. This huge discrepancy is not necessarily due to lack of supply, but to obstacles in the distribution chain. Timi Oke AgroEknor contributes to put an end to these obstacles. Focused on technology-driven value chain solutions, AgroEknor operates by sourcing, refining and exporting agricultural products to global customers covering markets in Europe, Asia, North America and the United States. ‘South America.

In this interview, Timi Oke talks about the agricultural export sphere and how his company is embracing technology to improve productivity.

What prompted you to launch AgroEknor?

I started AgroEknor in 2013. I was working in retail banking at the time, and noticed a gap between demand and supply for superfoods in Africa. The problem was not a lack of supply; instead, problems in the distribution chain prevented people from getting what they needed. We felt we could make an impact in space and we’ve been doing it for nine years.

How does AgroEknor work? from the sourcing of products to their final sale?

Currently, we export about 2,000 tons of agricultural products. The volume has dropped due to the pandemic. About 35% of this volume comes from AgroEknor’s control request. We invest in farmers and give them access to agricultural inputs, technical support, fertilizers, seed support and credit capital. When the crop is ready, we receive it from the farmers, transport it to Kano and process it to standard customer specifications. After that, we transport it from Kano processing facility to Lagos Port or Onne Port to Port Harcourt. Currently, we sell to approximately 30 different customers in eight countries. Our customers range from the food industry to the pharmaceutical industry and, more recently, to the cosmetics industry.

Dried hibiscus, ginger and sesame seeds are your main export products. Why these products?

For us, it was a recognition of opportunity. We wanted to have an intentional impact, so we looked at communities that needed the kind of impact we provide. We looked at farming communities that needed inclusive partnerships. We realized that superfoods didn’t get a lot of attention. Unlike the palm oil, cocoa, cashew or corn sectors which have been operational for a long time, hibiscus, ginger and sesame seeds still had virgin sectors. There were a lot of treatment gaps that we knew we could fill with quality investment. For us, it was about determining which supply chain of agricultural products could unlock the most value and provide the best return for us and our investors.

What challenges do you face in the business?

For many actors in the agricultural space in Nigeria or Africa, infrastructure is a challenge. The infrastructure in this space is not where we want it to be; it’s still a work in progress. Another complication we faced initially was quality control. We cannot neglect quality control when exporting to our international customers. We realized that many agricultural products coming out of Nigeria were of poor quality. And because the quality control infrastructure was lacking, we were at the low end of the price scale.

Due to the agricultural products we exported, the lack of storage space was also a problem. We needed to store these products in a temperature controlled environment. We found that poor storage wastes between 25-36% of the value chain. So we had to solve this problem quickly.

Another challenge was yield. If you have one hectare of hibiscus, you should expect around 1.5 tons in yield. But due to gaps and farming practices in the value chain, the yield was significantly lower than it should have been. Our value proposition is to look at these challenges and identify what we could do to overcome them and optimize the value chain.

Nigeria was once a major exporter of various agricultural products. What is causing the slowdown and how can we reverse it?

The previously discussed issues are causing the slowdown. Smallholder farmers grow about 80% of what we produce. For them to engage in planting and agriculture, they must be assured of financial security. At each level of the value chain, there are challenges in accessing finance, allocating resources, allocating land, etc. We are grateful that there have been international efforts to invest in the value chain over the years. You see companies like development bank Nexim embracing upstream integration. We have always been committed to impact-driven upstream integration.

On the export side, there is so much congestion in the port of Apapa. So the time between when you bring your products to port and when they leave can be tedious. I anticipate that now that roads are being repaired and port congestion is easing, engagement in the value chain will improve in the months to come.

What is the future of technology in the African agricultural industry?

The agritech ecosystem has grown over the years, and it was great to see. Over the past few years, the agricultural sector has embraced digital transformation, and what that has done is overcome some traditional challenges in the space, which I mentioned earlier. For example, over the past 3-4 years, AgroEknor has implemented agricultural management software in the form of precision farming. It changed the way hibiscus is grown and increased our yield. It has also increased the level of traceability. When you take agricultural products to the global market, they want to see end-to-end traceability. They want to be able to scan a barcode that tells them where a product is coming from and what chemicals are used to fumigate it. We were able to do things like that thanks to technology.

At our hibiscus flower processing site, we are installing sensor-assisted processing equipment. This is for quality and moisture control, and it has increased the general acceptance of our products in the global market. When your products are generally acceptable, customers pay more. The technology has generated more revenue for exporters, processors and even farmers. Research has shown that if we continue to successfully implement technology in this dynamic over the next ten years, the agricultural industry in Africa could generate approximately $500 billion in additional value. Exporters, processors and even small traditional farmers have embraced digital transformation, and we are not ready to slow down. We work with over 5,000 farmers, and some of the software we try to implement monitors yield, provides field analysis, weather reports and even climate reports. Technology makes life easier for farmers.

What aspects of agriculture would you like to see redefined by technology on the continent?

I want it to start with the small farmer. Farmers need access to sensor locations, weather forecasts and reports on their devices to better understand the harvest. Cultivation is simplified with these reports and analytics.

For processing, agricultural technology helps eliminate waste. About 35% of the products harvested are wasted. Technology can help optimize the value chain to reduce waste. It often takes about seven days to process 12 tons of hibiscus. With the right technology, it will take 48 hours. This is the advantage of integrating the right technology into the value chain.

How would you describe your impact since inception?

The impact from the start is commendable. We have empowered over 5,000 farmers. We have many women and young people in the hibiscus value chain, in addition to many small farmers. We have also been able to provide smallholder farmers with credit capital. Our investment in space creates employment opportunities for over 1,500 women and young people.

We have contributed to the GDP in many ways through our export earnings. Our operations have a major influence on the communities of Jigawa, Kano, Katsina and Nasarrawa, where we operate. We also give farmers land to grow other crops besides hibiscus. So that they can feed their families and improve their general well-being during the off-seasons.

How would you describe the attitude of young people towards agriculture today?

It’s been fantastic, and I think that’s why the momentum can’t stop. When we hold town hall meetings with farmers and young people discover that the founders of AgroEknors are in their early thirties, they are inspired. I work with and advise some of my peers. They can see what is happening and it motivates them. With companies like ours and a few others bringing public and private funding to the ground, there has recently been a lot of enthusiasm among young people for agriculture. Access to credit is improving and agriculture is becoming more attractive to young people.

What are your future prospects?

We have started the process of improving the agricultural value chain. However, we recognize that there is still work to be done in the years to come. We aim to expand our global footprint in Asia, Europe and North America, and we want to continue investing in an integrated back-end process that connects us to farmers. We want to be able to scale to more products and countries with our current technology. We are already one of the leading hibiscus suppliers in Nigeria, with operations in almost every state and region in the country, but we want to expand. We want to train more people and increase our resource allocation. We wanted to be intentionally impactful and innovative in a resilient way, so we hold ourselves accountable by initiating sustainable innovation that enables increased productivity and profitability for ourselves, smallholder farmers and other actors in the value chain.

Interview conducted by Adekunle Agbetiloye