Havard Graduate Works To Produce Tomato Paste In Nigeria

Forum 8 years ago

Havard Graduate Works To Produce Tomato Paste In Nigeria

More than 200,000 farmers grow tomatoes but half their crop rots. A start­up wants to unlock their wasted potential, writes Maggie Fick of the Financial Times.


Visit any grocery store in Lagos or any market in rural Nigeria and you will find an array of tomato paste brands. This staple is big business in the country ­ among the world’s top consumers and the biggest importer.


Although more than 200,000 Nigerian farmers grow tomatoes, not one of the more than 50 tomato paste brands for sale is made from their produce, ­ about half of which rot in the fields
before reaching a market. Instead,
multinationals such as Olam, the Singapore-­based commodities trading house, bring in shipping containers of paste made from tomatoes grown in California and China, with only final stage processing done in Lagos.


The gap between Nigeria’s farming potential and dismal performance began widening about 40 years ago, when the economic distortions caused by a booming oil industry started killing off agribusiness, transforming Nigeria from one of the world’s leading food producers into one of its biggest importers.


The previous government’s Agriculture Transformation Agenda (ATA) aimed to reverse the decline. Policymakers believed that impediments to private investment had stymied the sector. Among the proposed reforms were steps to encourage increased production and processing of tomatoes. Four years after the launch of the ATA, not a single local or foreign company is processing fresh tomatoes in Nigeria.


The new government of President Muhammadu Buhari, who took office in May, has yet to define a new policy. When it comes to tomato paste, the prospect ofexploiting local production to create an efficient, fully Nigeria-­based supply chain is still so daunting that private sector players from Nigerian business magnates to multinationals ­ are wary of the substantial investments that would be required to even attempt such a feat.


That dilemma is not new: the Food and Agriculture Organisation of the United Nations (FAO) says that over the past two decades,
Nigeria’s value­-added agriculture sector has grown by less than 1 per cent annually. Despite the odds, Mira Mehta, a 31­year­old Harvard Business School graduate, has done her research and taken the plunge of launching her own start­up, Tomato Jos.


The US entrepreneur, who previously worked on health projects in Nigeria for the Clinton
Foundation, said she had begun thinking about possible farming projects after driving past what had looked like crimson carpets as farmers dried their unsold crop on the hot tarmac. “The image of the pools of red lining the side of the road stuck with me and started making me think of agriculture in Nigeria and where the gaps were and it just seemed like a big waste,” Ms Mehta said, speaking from her base in a converted chicken coop on her farm.


Using $300,000 she raised in seed capital from six angel investors and a Kickstarter campaign, Ms Mehta plans to test her theory that a profitable agribusiness that also benefits local farmers and consumers can work in Nigeria. The Bostonian leased three hectares in Nasarawa state from the only white Zimbabwean farmer still working there of a group of 20 who were given land by the state government a decade ago.
The rest were defeated by poor infrastructure, confusing bureaucracy and the difficulty of importing essential inputs, such as machinery.
Tomato Jos faced problems in its first planting season last year ­ from poor irrigation to overuse of fertiliser in the nursery ­ that forced Ms Mehta and her team to start again with new seedlings.
Through applying some of the lessons learned with the first crop, the goal for her second harvest next year is to sq££ze about 10 times the average national yield out of the land. Mehta says this is possible because she is deploying a more intensive fertiliser programme than local farmers, as well as using higher quality seed and more stringent nursery conditions. In addition to her own crop, she plans to buy tomatoes from about a dozen local farmers.


The fresh produce will then be taken to a processing facility in the city of Zaria, north of the farm. The equipment was assembled in 2013, but has yet to be used commercially because it is owned by the National Research Institute for Chemical Technology (NARICT), a parastatal that does not have a mandate to sell its end­product.
Though Mehta has yet to test drive her supply chain, she has a ready market for her paste. Ram Mahadevan, head of packaged foods for Olam, seller of Tasty Tom and De Rica, two of the most popular brands in Nigeria, says he is ready “to buy every kilogramme of tomato paste” Tomato Jos can produce. Olam wants to support domestic supply and has suggested to the Buhari administration that it conduct a feasibility study into how to create and scale a proce to create and scale a processing industry.
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