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October 21 | east africa investment | 686 views | 0 Comments

The role of the manufacturing sector cannot be taken lightly as it is widely considered to be the ideal industry to drive Kenya’s development. This is due to the labour intensive, export-focused nature of the industry. Furthermore, the manufacturing sector is also more sustainable and less vulnerable to external shocks than commodities for instance.

Kenya’s manufacturing sector is dominated by food and consumer goods processing. Meat and fruit canning, wheat flour and maize meal milling, and sugar refining are notable sub-sectors. Given the impact this industry is having on the country’s economy growth, Global Partners Solutions Ltd. (GPS) scouted for influencers in the industry to interview and had the pleasure of meeting with Mr. Eric Muthomi, Chief Executive Officer of STAWI Foods and Fruits Ltd. IMG-20141122-WA0044

A company making a name for itself by being an authority in the banana industry and influencing change in the industry by buying raw bananas from local farmers at guaranteed prices, processing them into banana flour and packaging them for sale in the market.

This company has since its inception in 2010, improved the lives of thousands of banana farmers by providing them with sure income. It has also helped to increase the shelf life of bananas which would have otherwise rotted and gone to waste if they were not sold soon after harvest. The banana flour, which is made from processed green bananas, is gluten free, nutritious and can be used to make baby food, porridge, mashed food, baked foods and soups. This versatile branded product which is sold as ‘STAWI Natural Banana Flour’ is distributed in several major supermarkets across Kenya.140101151804-spc-african-start-up-stawi-foods-fruits-00001422-horizontal-gallery

STAWI finds great support in exhibitions like GulFood Manufacturing, held annually in Dubai; a sector-specific trade exhibition for ingredients, processing, packaging and food logistics providers who service the rapidly growing food and beverage production industries established in the Middle East, Africa, Far East and Sub-Continent. The event provides food manufacturers with the ingredients, equipment and business improvement tools and an invaluable network that enables more efficient production and distribution. This year, GulFood Manufacturing 2015 takes place from 27th – 29th October 2015 at the Dubai World Trade Centre.

Find below an excerpt of the interview with STAWI Food and Fruits Ltd CEO, Mr. Eric Muthomi who has been successful in winning some top awards such as the Top 30 under 30: Africa’s best young entrepreneurs, Forbes Africa, February 2013 among others with GPS Business Consultant, Lorna Ochieng’.

What was the motivation behind founding STAWI?

I would like to begin by explaining what STAWI stands for. STAWI is a Swahili word for ‘Prosperity and Growth’. I had foresight to grow and prosper in life and I quickly had to figure out what I wanted to do after I finished campus. Although I studied Law I knew I wanted to get into the manufacturing business because it has potential to impact the country, especially agribusiness. My main interest was in the banana industry and I wanted to help the farmers were getting shortchanged in Meru, one of the largest banana producing regions in the country. I went back to school and studied Business Management and it right after graduation that I got some funding and started STAWI Foods. The motivation behind STAWI was so that I could provide a market for small-scale farmers and increase the shelf life of bananas which would rot in farms, especially those belonging to farmers who could not reach the collection centers set up along the tarmac road on market days. I also wanted to create jobs for youths in urban and rural parts of the country and providing nutritious and affordable healthy foods for babies of world-class quality and ingredients sourced locally.

With great assistance from the Ministry of Agriculture in late 2010, I was introduced to resources that helped me to turn my idea into a prototype. I had developed a concept of what I wanted to do and that was, banana processing. After 6 months, I went back to Meru in 2011, where I teamed up with local farmers in Meru leased a property where we were processing, packing and we eventually got into the market in 2012 and Nakumatt was our first big client as well as Uchumi, Chandarana and other mid-size accounts.. With the growth and success of the business, I chose to diversify and introduce the current porridge mix for kids and adults, got additional funding, bought equipment, hired more staff and moved to Nairobi where we set up a plant in Kasarani, Thika Rd.

What was the nature of the food manufacturing industry when you started STAWI? What changes have you noticed in the market to date?

It’s been challenging because it takes time to set up, inject capital and for the business to pick up and eventually break even. The best thing is that this industry has potential to have very good returns, for example companies like Bidco,  Keroche to name but a few have had a tough start and been in the industry for years and are now great success stories. Challenges of sourcing raw materials in the country, are that they tend to be very expensive, grains are also very expensive in comparison to Uganda. One must also consider price fluctuation, seasonal changes, and outsourcing equipment. It’s a challenging business to be in and it’s not the most glamorous but once you tap into the industry, the possibilities of success are endless and profits are very high. Technology is also merging well with the agribusiness and it is beneficial for farmers through the new M-Farming business in which the middleman is eliminated and the farmers literally reap what they sow.

What are your products and services, target audience, market outreach (locally, regionally, and/or internationally)?

We are currently supplying to Nakumatt Headquarters then they supply to their branches countrywide in Nairobi, Mombasa, Nakuru, Kisumu and Eldoret. We are not yet countrywide because we would like our products to be accessible to our consumers even in the local kiosks all over the country. Once we understand the market, we can recruit distributors and suppliers who will ensure wider market outreach and we will need to support the brand through advertisements and use other publicity platforms that will improve awareness. One other method we are looking to get into in order to create more product awareness is to partner with healthcare facilities and target healthcare service providers who will be informed about the health benefits of using our products and in turn provide this information to the mothers with infant babies. Our products include Nurture Junior & Family, Unripe Banana Flour and Natural Resistant Starch Flours.

What makes STAWI stand out as leader and authority in Agribusiness?

I would not consider STAWI an authority in the industry, at least not just yet. On the consumers’ side, I would like for our consumers to associate healthy foods with STAWI. We want STAWI to be the leading brand in healthy eating and living.

On the Supplies side, we want STAWI to be associated with fair purchasing from our local farmers. Fair sourcing from the farmers locally and supporting them with input and training and capacity building because we want them to be part of the business since we need them to supply raw materials. We want STAWI to be a healthy brand for our current products and even with other products in the next 5 years,

What was your experience with STAWI attending the GulFood Manufacturing held in Dubai?

I went to GulFood Manufacturing (GFM) exhibition last year thanks to Global Partner Solutions (GPS) when they informed me that it was specifically targeting manufacturing industries and was mostly attracted to the hosted buyer package. I had never really heard about GFM prior to being invited by GPS and although I get similar trade expo invites to events like this, I usually do not pay attention to similar invitations but GFM really attracted my attention. My experience last year was invaluable because:-

Suppliers and exhibitors had a wide range of people from the Middle East, Africa and South Asia, different machines for different industries such as milk, grains etc. I received several contacts from people in the same industry and we look forward to working with them in the future.

Packaging material companies were particularly interesting to me because locally, we spend a lot of money on packaging products, we have been looking for cheaper supplies from China or India and I was fortunate enough to find a company that sells packaging materials in large quantities, i.e. containers. We are currently in the process of rebranding and we chose to work with a local company whose quantity number is flexible and not bulk and we ordered for 40,000 pieces to start with. But as we expand, we may end up working with the packaging company we met at the exhibition and order in larger quantities. We are interested in working with them because they have very good material and innovative packaging that we do not find locally.

The Consulting services stands targeting food industries and offer advice on HACCP and ISOs and improving efficiencies. There was a Dutch company that caught my attention because they have expertise in that area and what I was hoping to do with them was to try and leverage. At times we can work with donor who wants for instance to provide technical assistance but do not have a consultant, therefore we could link the two together through ISO certification

I met suppliers of ingredients they supply enriching agents for baking and soy bean nutrient additive

I attended a workshop on accounting, financial management for food processors. A Dutch consultant was there to demonstrate how to sue a software that makes it easier for accounting, tracking and accuracy on performance, The takeaway from this was that I developed one for the company it is really helping us keep track of projects and funds. There were very informative workshops on emerging markets in Africa that were practical and fit into the respective industries

I also made networks with the Nestle CEO, Nigeria and I am looking to have some of our products into the Nigerian market although it is challenging to get into the market because of the tedious licensing process, however, we plan to meet with the CEO who can give some insight and hopefully it will be fruitful.

What should we expect in the future for STAWI Industries? Final word.

We have a social mission to help the farmers by sourcing directly from them. The banana farmers earn 50% more by directly buying from STAWI and not processors because we buy semi-processed bananas from them. They do value addition to the bananas and we pay a premium from them and they in term make more money from processed products than non-processed. The long term vision of STAWI is to be a Pan African industry, the Pan African Nestle or the Pan African Unilever they are very successful and we hope to be. We see the opportunity in Africa and we hope to build on that strength and prosper. Eventually we hope to be in various African markets in 10 years.

STAWI industries is an example of success that occurs when companies or individuals  identify an opportunity, strategize, collaborate and intensely work to succeed in a market that is ripe for growth and innovative ideas.

Global Partner Solutions Ltd. (GPS), is a Nairobi based Business Growth Development and Marketing Agency which assists established and new companies in growing their products and services in the Kenyan market through innovative and tailored marketing solutions. If you wish to learn more about attending GulFood Manufacturing exhibition which is being held on October 27 – 29th or if you wish to speak to a Global Partner Solutions consultant about growing your business in the Kenyan market. Please contact us at info@gps-connects.com or 0723 652 873. www.gps-connects.com

 

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