During a recent visit to Malawi, we visited some of our growth programmes for an extensive interview with the entrepreneurs about their company, their lives and entrepreneurship in their country.

For more than a hundred years, the Satemwa Tea and Coffee estate has stood proudly in the hills of South Malawi. What started as a tea and tobacco plantation founded by Scotsman Maclean Kay has since grown to a large estate producing specialty teas and qualitative coffee, supporting the local population and protecting the broadleaf evergreen forest with wildlife corridors. Alexander Kay is the latest family member at the helm of Satemwa, introducing a modern approach to tea production and exporting all over the world. With a newfound focus on tourism, Satemwa now wants to educate others about tea and coffee, thus further strenghtening their community with decent jobs and a sustainable income.  

Part 1: Work

Can you tell me a bit more about Satemwa Tea and Coffee?

Alex: Satemwa is a family owned business and we celebrated our centenary two years ago. We mainly produce tea and a little bit of coffee, processing and exporting those products ourselves. A few years ago, we ventured into tourism. We converted some of our old bungalows into lodges. We also do forestry and try to maintain what we call wildlife corridors. A lot of the valleys and waterways here are surrounded by forest, some of which is the original forest, while other parts have been cut down and re-established. These wildlife corridors perform a couple of roles, one of which is that it makes sure we don't grow any crops too close to watercourses, protecting them. It also allows animal and bird species to safely traverse through the estate, helping the populations to mix in a healthy habitat. There are very few vestiges of this broadleaf evergreen forest left in Malawi, so we're trying to protect the last bits really.

How and when did Satemwa start?

Alex: My grandfather was a planter from Scotland. He'd been in planting rubber in the Far East and on the ship going back, he met some investors who wanted to come and plant rubber in Malawi. They recruited him and agreed to meet here some months later. But when he arrived, there were no sign of them, their project hadn't developed yet. My grandfather communicated with his brother back in Scotland, who told him that there are people growing tea south of Blantyre and that it was becoming quite successful. That was in Mulanje, where the tea industry started. So my grandfather came down here, got interested in tea and managed to buy a plot of land, which is the land we're on today. Satemwa started out as a tobacco estate, up until the Depression, when he stopped producing tobacco - a lot of tobacco farmers in this area went bust during that period. But he was growing tea from the beginning as well, selling it to a factory down the road. In 1938, he built his own tea factory and started processing the tea here. And then it slowly evolved into what you see today.

Did you always know you were going to inherit this estate? Did you grow up here?

Alex: I grew up here and of course as a family business, you're involved from very young and you always hear the stories of the day. I was running around, riding on bicycles with friends around the area. So you're very much part of it, especially on a farm. Everyone's working all the time and you start learning at a young age. Not that I was particularly interested when I was younger. It's sort of evolved, I guess, my interest in the tea and coffee business. This interest was mainly triggered by the processing side. I was interested in the fact that you can take it from a seed, grow a plant, process it, drink it and really, you know, just appreciate what the land can provide. I also saw a lot of opportunities to change and improve the processes and the products. We've done a lot of work the last fifteen years in developing a range of new tea products. The traditional process in Malawi was always focused on black tea, since tea was first established here in the late 1800s. The technology's changed slightly over the years, but it's always been a black tea process. What was quite fun for me was developing the green teas, the oolongs, the white stock teas. Learning about all these types and how we can process them. We hadn't even heard of white tea until about twenty years ago. I started reading about it in magazines, but we had no idea what it was. Discovering that was quite a fun process. It's an international business and we have customers all over the world. Interacting with these customers and shipping worldwide also keeps it interesting for me.

What are you most proud of working on the past years?

Alex: Because we’re a smaller family business, we don't have a lot of capital to make big investments, so a lot of our investments tend to be iterative, small changes going on all the time. I was involved in the development of green tea and we're still the only company in Malawi making green tea. That was quite a fun project. What I'm also really proud of is the food safety project, which has been so important to us as well. We started on that journey taking baby steps, but now it's really critical and customers are really demanding. Luckily, we started working on food safety quite early and we were able to learn our way into it. It's matured quite nicely. It's also helped change the culture of the factory and the mindset of people, and it's been an agent for change and improvement. Recently, we've also started working on local tourism. We used to do self-catering accommodation, which was my father's project originally, and then around 2009 we changed it into a lodge-type model. It's been pretty successful, but now the time has come to make another change. I think generally, tea is a very competitive market, so it's quite difficult to be successful in a business sense. What helps us make it work is that we have a diversified portfolio, with an ecosystem of products.

You’re focusing on ecotourism right now. What do you want to introduce?

Alex: Huntingdon House is a fantastic old family home, but it's rather restricted in terms of its size. It only has five rooms and we don't really want to change the style and character of it. But we get a lot more demand particularly for day visitors, and we can't always accommodate them when the lodge is full of guests. So our plan is to build - we've already started working on this - another site where day visitors can come. They can see our full range of teas and coffees, and they can interact with the people who've made them. They can take tours directly from there, take a dive into tea, pluck their own, see how coffee's made, ... The idea is also to be able to accommodate bigger groups, like school groups, and provide educational trips. They can also get involved in the community. We have a school here, and we've built our own clinics. The legacy of estates like Satemwa is that these were very isolated places 100 years ago, with no medical or educational facilities around. It was very much the onus on the estates to provide those facilities. So we built four clinics, including a maternity section, and a primary school situated on the Satemwa domain. Through our fair trade programs and other partnerships, we also offer scholarship opportunities to take local children into secondary school and even into tertiary education.

What are your ambitions and long term goals for Satemwa?

Alex: We've been working on building our own brand in Malawi, so you'll find our products on the shelves here. We want to continue to develop that, but also expand into the region, South-South trade, particularly with Zambia, Mozambique, Botswana, and other neighbouring countries. We want to try to create more value around our tea and coffee products. For a very long time, we used the model of selling our product through an auction system, a model which a lot of agriculturalists use. The idea is to move away from that and really produce products for our own brands, but also specialist tea companies around the world. We’re just now selling our first tea to China, which is quite exciting, as it's a huge growing market. I would say we're moving more in the direction of specialist and niche products. Concerning the tourism project, we really want to educate people about the products and showcase the area. We work with a lot of smallholder farmers and we're also starting a coffee value chain with them. With the development of a tourism offering, we can create more interactions with the community, and try to create more economic activity in the area. There are not a lot of opportunities in this area and not a lot of formal companies operate in this area, outside of the agricultural operations. By expanding our offering, we can really help the economic livelihoods of the communities. Tourism jobs are also typically quite well paid. They are a springboard for people to then go and work elsewhere and develop themselves.

Part 2: Exchange

What has your experience with Exchange been like?

Alex: We've had a long relationship with Exchange, concluding a first growth programme with the food safety project and now starting a second programme for tourism. I think what we've found is that Exchange has been really good at identifying the right kind of experts to come out here. We've also been offered a choice of expert and been able to select the ones that we think will work well together. We've maintained contact with the people that have come out here for many years after the food safety project. We've also had members of staff go to Belgium to visit factories and get ideas and stimulation from that. And we've participated in a few functions in Malawi and met other people involved in projects. We've even got involved with buying some guano from Mozambique, which was another Exchange project. 

Can you tell us a bit more about your first growth programme, the food safety project?

Alex: In 2016, an Exchange coach came out here a few times and helped us to conceptualize what we needed to do, which was quite important. I think we hadn't really grasped what food safety involved. What Exchange was able to do was really lead us through those steps of conceptualizing it, helping us to put together the action points and start working on it. Our members of staff visited Belgium twice and visited certified factories, smaller and bigger companies to really understand their journey and get a feeling of what a factory with FSSC certification looks like. The project took us much longer than we originally planned. In the end it took us about five years, but I think what we're left with is a very robust system. And we can say that we've developed it ourselves, it hasn't just been a consultant who came in and said ‘right, you need to do this, this and this’. It really was a very strong cooperative process.

Looking forward, what is your next goal with Exchange? 

Alex: Several experts are coming to assess our team and our current offerings in terms of our tours and activities. They'll also observe a visit of tea experts and buyers, to see what that looks like. We will then try to take bits out of that programme that might be fun for a tourist to do. Pluck your own tea and end up with a tea to take home, something like that. The idea is to train up the local smallholder farmers in terms of expectations of what tourists like, and then try and build a product around that. We'll train different service providers from the community, possibly some guides and farmers to visit. We're also converting part of our coffee processing plant so that it can be a working factory, but also a place where you can have a meal, where you can learn more about coffee roasting, processes, different types of coffee, different varieties, and make your own little blends.

Part 3: Life

Can you tell me a bit more about yourself?

Alex: I've spent my my whole life here at Satemwa. The first school I went to was just a little farm school down the road. Later on I went to Blantyre for schooling and for university I went to South Africa, after which I did a bit of traveling. As a person, I like to work. That's my reason for being in this world, just to work on this project. There are still lots of opportunities, and a lot of challenges as well of course. I’m also a family man, living here with my kids and my wife, who runs the tourism side of the estate. In my free time I like cycling, mountain biking, running, hiking, a bit of fishing, some motorbiking... the area is perfect for that sort of outdoor activities.

What inspires you in life?

Alex: I think generally I'm inspired by innovation and a lot of the big global problems of the day. Environment is a big issue of course, and Malawi has a lot of challenges, like a lack of opportunities, a big growing population and a lack of education. I see a lot of agriculture being done in a poor way. Those are the sort of big issues that interest me. Through the business, we try to address these challenges the best we can. And then as an agriculturalist, there's a lot of change in agriculture right now, trying to reduce the use of chemicals, thinking about sustainability, integrating livestock, … our understanding of agriculture is being changed as we speak. This change is very transferable into the smallholder sector and into our context, which I find very interesting. 

Part 4: Entrepreneurship and Malawi

How do you look at entrepreneurship in Malawi? What do you think about the business climate?

Alex: I think Malawi as a business landscape is a bit of a double edged sword; there's a lot of opportunity because it's so underdeveloped. Almost every sector you look at has got opportunities in it, so that's of course very exciting and engaging. But one of the reasons for that is the lack of a developed service sector and funding available to try and find investment capital. So you need to be able to see through the challenges like power, general infrastructure, and capital. If you can work through that, then there's obviously a lot of opportunity. Regulation is not too hectic compared to Europe and so a lot of markets are wide open. You don't need to go through tough legislation and tick too many boxes. So you can get on with a lot of things quite quickly, as long as you've got the resources available. 

How do you see this evolving in the next few years?

Alex: The way I see it, Malawi's big challenge is that we've got a massive growing population and at the moment there are not enough resources to educate, medicate and provide jobs for that population. So that's a big question mark in the future. Recently, through the new national ATM strategy (Agriculture, Tourism and Mining, ed.), there have been a lot of mining opportunities identified. I think that has the possibility of providing the wherewithal to help provide for this growing population, so that's quite exciting. It'll still be some years before these mining opportunities start to result in capital inflows back to the country, but in the meantime, there's a lot of development, a lot of training, and a lot of new jobs will be created. On the agricultural side, because predominantly we're still an agricultural country, I think there are some good strategies out there in terms of getting commercial farms to work with smallholder farmers. Some of that strategy is being supported by funding through AGCOM - agricultural commercialization - projects. We've actually been part of an AGCOM project with one of the smallholder groups we work with. I think if that can gain momentum, then there's a really good future for agriculture. Of course, agriculture is a huge employer in the years ahead. Then the other part of that strategy is the tourism. I think the big challenge for tourism is the logistics of getting into Malawi. It's really expensive to fly here so you've got to be very keen to come to Malawi. I think that's one of the main impediments for investments to follow. Tourism is a bit of chicken and egg as well, because you don't really want to make the investments if you can't see the tourists coming. But at the same time, if they come they could quickly overload the existing infrastructure. Luckily, some fantastic work is already being done to support local tourism. The work that African Parks has done with our game parks is amazing. 

What difference would you like to see the most?

Alex: What I'm very interested in is education. To provide better education is so hard with the masses of youth. Maybe it can be done through technology; there’s so much cheap technology out there these days that would enable them to get better education access and better skills development. We’re lacking a lot of practical skills, so that as well needs to be balanced. For me, that's a critical thing in the next few years.

What do you like most about Malawi?

Alex: The Malawian people are very friendly. As I said, I like cycling, and going anywhere, there’s always a smiling face, someone willing to help you if you're in trouble. But what I like the most is that we've still got a lot of open space and natural environments. While they're farmed, it's still not a polluted environment. I like that very much.