Sector: Agro-industry

Kwithu Kitchen was founded in 2013 in Mzuzu, the capital of Malawi's northern region, by entrepreneur Anna Msowoya and her partner John Keys. Originating as a social project offering nutritious meals to poor children, the business grew over the past 10 years into a high-growth business processing tomatoes and honey.

Kwithu Kitchen is the largest producer of honey and one of the larger processors of tomatoes in Malawi; their products can be found on the shelves of the Shoprite and Chipiku department store chains. Until recently, the same supermarkets sold only processed tomato products - ketchup, tomato paste and canned tomatoes - imported from South Africa. With the devaluation of the Malawian currency, it is much more economical to process local tomatoes.

This economic activity is bursting at the seams: in 2023, the team of 30 employees sold an average of 4 tons of honey and tomatoes per month. The growth potential is great, and an exploratory feasibility study quickly showed that Kwithu Kitchen is an ideal candidate to become an Exchange growth program.

Renewed business plan and new factory

Our contribution begins with renewing their business plan. In view of their strategy 24-26, coach Marcel Christianen drafted a business plan model, which will be refined by Kwithu Kitchen in the coming months. Based on the business plan, the coach plans together with the entrepreneurs behind Kwithu Kitchen the right expert missions - both long and short term - to realize the growth plans.

Some elements have already been identified for which Exchange can provide the necessary expertise. For example, Kwithu Kitchen plans to establish a new factory unit on better located land, which will allow the company to process honey and tomatoes on a larger scale. Further product diversification may also accompany the growth of their operations. Further steps can also be taken around financial planning and training of central staff. In recent months, we have communicated tirelessly with Kwithu Kitchen to outline a solid growth program that will undoubtedly yield great results in this cycle.

Maddo Dairies is a dairy processing plant with about 30 employees, established in 2003. It is profiled as a social enterprise and is owned by the Catholic Diocese Masaka. Each day they receive 5,000 to 10,000 liters of raw milk, which is processed into pasteurized milk and yogurt at their factory. The raw milk is collected from farmer cooperatives and the company also has five collection centers where the milk is collected. The milk is processed in a newly built factory that has been in operation since December 2021. The goal of Maddo Dairies? To produce high-quality dairy products while improving the livelihood of local farmers.

The dairy company came to Exchange for the expertise needed to implement their strategic plan. With that plan, they want to increase revenue from various dairy products by training staff in product development, machine supervision, sales and marketing.

Specifically, Maddo Dairies wants to increase their milk production by 20% in the near future, increase sales through better marketing and branding, and develop a more diverse product offering. An initial mission by volunteer Jan Sysmans focused on establishing standards and procedures, working out quality systems and assisting in the start-up of equipment for ice cream and semi-skimmed milk.

Maddo Dairies has already made great strides in recent years and laid foundations for its further growth, which will undoubtedly be realized in the coming years.

Founded in 2014, Rabboni Group Limited is a transport, distribution, trading and processing company of dry agricultural commodities. Their focus is on maize and derived products, in which they handle the entire supply chain from producer to consumer. A formula that works, but was ready to scale up: Rabboni wants to increase their grain processing and storage capacity from 4,000 to 20,000 tonnes as soon as possible, an ambitious goal that requires careful preparation.

So, although Rabboni was already making great strides in homeland Uganda, they were looking for expertise regarding the qualitative and quantitative growth of their operations. By 2022, the time had come and Exchange partnered with Rabboni to address three needs: branding, marketing and quality control. After a feasibility study in February 2022, it became clear that branding and marketing were not a main focus, and Rabboni's needs shifted to two elements: reviewing operational practices, corporate culture and quality control, with the aim of achieving ISO 9001 & 22000 certification (quality), and building a new process plant, including silos capable of accommodating increased grain production (quantity).

Quality control

To get quality control (QA) on point within Rabboni, a number of grain company employees attended training sessions around quality and certification. Based on the training, structural changes were implemented in the company: not only were processes optimised, Rabboni even decided to rebuild their facilities from scratch, fully compliant with professional quality standards.

Those quality standards are essential for scaling up their production. The natural toxin Aflatoxin is common and very dangerous for grain production; if the grain is treated poorly, it can lead to contaminated products and carcinogens. This quality control naturally starts with the farmer himself, but it is essential for Rabboni to have its own plant to check the grain samples; that is why the company built its own laboratory, which is up to date with contemporary quality standards thanks in part to quality training.

Factory expansion

With the help of coach Wim de Deken, contact was made with Belgium's Meyland, which could supply four silos to Rabboni's specifications. A commercial proposal was made, but the investment was too expensive for the grain processing company for the time being. At Meyland's invitation and supported by Exchange, CEO Daniel Joloba came to Belgium for a week to meet some investors and visit the Bulk Solids Expo in Antwerp.

The purpose of the visit? To find alternative funding for silo installation and convince investors, both at the hardware and sales level, to invest in Rabboni. Traditional financing in Uganda is feasible, but would be a process of at least 25 years; time that Rabboni does not have if they want to scale up their production to such an extent. Local grain farmers have to be paid cash and grain cannot be sold immediately; so Rabboni needs enough funds to buy grain and store it long enough - without letting it degenerate - before it can be profitable.

An ambitious goal, then, but not unachievable. With the right funding, Rabboni can install the necessary technology to scale up their production at lightning speed. A win-win situation: not only will Rabboni be less dependent on third parties and be able to become a major player within Uganda themselves, the family income of local farmers will also increase. Combine this with the exchange of expertise, training and funding from Europe, and you have the perfect example of a sustainable North-South collaboration.

Flemish Development Cooperation supports the improvement of agriculture in the northern part of Malawi with its SEED program. We at Exchange have an excellent relationship with Flanders and are looking for ways how - complementary to what Flanders is doing - we can further strengthen a number of projects. In a nutshell, that complementarity means that Flanders supports those initiatives financially, while Exchange helps SMEs grow by transferring expertise and knowledge. Two examples of how this works:

Frankie Washoni is CEO of Hortinet, an organisation that wants to stop the decline of Malawi's banana crop. Malawi was an exporter of bananas until the ‘Banana bunchy top’ disease destroyed up to 80% of Malawi's banana production. Frankie sought support to do something about this and found his answers mainly through Google: he promptly built the first commercial lab in Malawi that produced virus-free bananas via tissue culture. This was very successful for six months; thousands of virus-free banana plants found their way to as many as 600 farmers. Production picked up again, thanks in part to the financial support Frankie received from Flanders.

But suddenly everything stopped; the laboratory itself did not remain virus-free. Exchange coach Jan Aertsen visited the company in March 2022 and started looking for solutions together with Frankie. He contacted Professor Ronny Swinnen, a man with unique expertise in the field. Prof. Swinnen put us in touch with Delphine Amah, whom he trained and who worked at the International Institute for Tropical Agriculture - IITA - in Nigeria. Exchange invited Amah to share her knowledge with Hortinet, and she did just that. During her visit in August 2022, the Hortinet lab was able to start up again and arrangements were made to give the Malawian staff additional training in Nigeria. Today there are more than 2,000 farmers on the waiting list, ready to restore banana production in Malawi and stop imports from Tanzania and Mozambique - which sinds the collapse of local production accounts for more than 90% of Malawi's banana consumption.

Ziweto is a collective of about a dozen veterinarians that distributes veterinary medicine throughout Malawi's territory, thanks in part to financial support from Flanders. But Ziweto sees another opportunity to make a leap forward concerning Malawian livestock farming: the collective wants to make and distribute livestock feed using local raw materials, so that livestock farmers do not remain dependent on expensive, imported feed.

Following a visit by Exchange coach Guy Callebaut to Ziweto earlier this year, Exchange was able to persuade a few experts at AVEVE to put their shoulders to the wheel: Marcel Christianen, who was commercial director for animal feed at AVEVE until his retirement, and his friend Dirk Bogaerts, nutritional manager at AVEVE and the person ultimately responsible for the composition of various nutritional formulas.

An effective brew

At the end of July this year, Marcel Christianen also visited Ziweto. He kept his intervention very focused, specifically on the production of feeds for laying hens, fattening chickens and fattening pigs. This visit was a great success across the board. To illustrate:

• There was already an industrial mill at Ziweto, but it was not yet functioning. Together with the technicians of Ziweto, the mill was put into operation;
•  With online backup from Dirk Bogaerts, 24 feeds were created and three formulas were effectively produced;
• A suitcase full of feed and raw material samples was taken for analysis to the lab of AVEVE in Belgium. Ziweto itself already has a number of devices to perform that analysis: by comparing the results in Belgium with those in Malawi, the accuracy of Ziweto's measuring devices can be verified;
• Preparations have been made for a training of two central staff in Belgium later this year.

Or how Exchange plays a role on two fronts to mix things up successfully: on the one hand, we mix Flemish funding with expertise from AVEVE and with the enthusiasm and expertise of Ziweto's veterinarians, while on the other hand, locally produced soybeans, maize and derivated products are brought together in high-quality animal feeds.

Clearly a win-win situation: a revenue model for Ziweto, with the end product being affordable and qualitative cattle feed for many Malawian cattle farmers.

Malawi is a real agricultural nation. 80% of the population lives in rural areas en agriculture accounts for one third of the GDP and 90% of export earnings. The agricultural sector in Malawi is mostly small scale en hardly mechanized or industrialized. Most emerging entrepreneurs don’t see agriculture as an attractive sector.

At the same time Malawian agriculture urgently needs innovation and diversification. Exactly what Acades tackles. The organization stimulates young entrepreneurs in agribusiness. Acades facilitates market access for young farmers, offers small loans, organizes events and trainings and founded the Green Innovation Center, an incubator for innovation in agriculture. Acades is a young organization that achieved a lot with limited resources and a small team. Its growth ambitions for the next years are challenging.

Kombeza Foods is a young dairy company founded by a dynamic entrepreneur and young mother. The fact that nutritious and locally produced dairy products are hardly available in Malawi inspired her to develop a local, nutritious and tasty product.

The Kombeza drinking yoghurt was launched. After the first successful years the company now stands at a crossroad. Currently, the factory building is being expanded to substantially enlarge the production capacity. A challenging process which Exchange will be glad to support. Hilde Schuddinck is, as Manager Account and Young Entrepreneurship at VOKA East Flanders, the ideal coach to guide this programme in the future.

Moving the production to a new building and simutanuously raising the production volumes is challenging. A thorough assessment of the production process and optimizing the process is an important step (constant supply of quality milk, process management and efficiency).

Satemwa Tea Estate is a Malawian SME that was founded in 1923. The company produces quality teas and has an undeniably sustainable character. Satemwa was the first Malawian tea company to be awarded a Fair Trade certificate! As well as this, the company has also achieved Rainforest Alliance and UTZ certification. It has emerged as a pioneer in the area of CSR (Corporate Social Responsibility) in Malawi. Satemwa has stimulated the employment of women and manages its own hospital and school for employees (and their children) and the population of the surrounding communities. With more than 1,300 employees - 800 more in the harvest season - the tea company creates a lot of jobs and plays a role in the Malawian economy that cannot be underestimated. Plus, every year, Satemwa supports 130 students in higher education through awarded study grants. Finally, it is also a corporate member of the UN Global Compact. Talk about a sustainable pioneer!  

Satemwa has developed a ‘direct trade partnership’ with the Msuwadzi Small Holder Tea Growers Association. For ten years, Satemwa has worked closely with the group of 198 independent tea farmers (92 of whom are women) in the production of Speciality Teas. This collaboration led to the association, under the guidance of Satemwa, being Fair Trade, Rainforest Alliance and UTZ certified. A so-called out grower manager from Satemwa trains the members of the association in innovative picking techniques, production techniques and capacity development. The collaboration has led to the establishment of the tea brand YAMBA tea that is sold in Malawi and neighbouring countries.  

Approximately 90% of the tea produced by Satemwa is black tea. Every year, approximately 2,500 tons of tea is sold to major tea brands, such as Lipton, Pickwick and Twinings. By investing more in Specialty Teas and by further processing the tea into green, oolong, white and herbal teas, the small farmers can offer high-value products to richer markets in Europe and the United States. Satemwa wants to create maximum added product value in the country of origin.  

There is no specific certification needed for the sale of black tea to major brands. Large multinationals themselves perform quality testing in their own laboratories. The same applies to the sale of tea under an own brand name, such as with YAMBA tea.

With the Specialty Teas, Satemwa is aiming more at the international market. And that is where international food safety standards do come into play. Not a single tea-producing company in Malawi has been able to achieve an international food safety certificate thus far. For Satemwa, this is an excellent opportunity that would put them on the tea-lover’s map.  

A certification is not only interesting for Satemwa employees, but also for the Msuwadzi Small Holders Association. It would allow them to process and pack Speciality Tea and their own YAMBA brand in a certified environment. That would open the doors to export to countries further afield.  

Besides internationalisation and certification, Satemwa has now set its sights on organic tea production. Complementing the traditional tea market, which is competitive and operates with small margins, Satemwa wants to carve out a niche with organic tea. Through their satellite in Boechout, started as a one-man business but now an office with three employees, Satemwa can attend trade fairs in the United States, the Netherlands and Germany, among others, and seek expertise and knowledge around organic production.

Naturally, a quest for expertise is music to Exchange's ears. We put Satemwa in touch with UGent professor Stefaan De Neve, expert in guiding farmers in their quest for organic production. In addition, Satemwa is now also looking at Mozambique, where one of our BDMs exports bat fertiliser to South Africa with his company GuanoMoz. Just 400 kilometres from Satemwa, a collaboration between these two southern companies would be optimal.

Two Flemish companies are convinced to assist Satemwa in its growth ambitions. Stop Spices, a company of herbs and spices from Dendermonde, shares its expertise on certification, digitalisation and packaging technology. Comma merkenmarketeers, a marketing agency from Zedelgem, coaches Satemwa in developing a specific marketing strategy for the European market.

The official certification is well within sight. The international market may quietly start looking forward to a delicious cup of Specialty Tea. Planted, picked and processed in Malawi, The Warm Heart of Africa!