Vital Traits To Emulate From These Three Topnotch Tomato Millionaires In Africa & How To Startup:
Africa has a serious tomato problem.
Tomatoes are Africa’s most consumed fruit (or vegetable); eaten by millions of people across our continent’s diverse religious, ethnic and social groups. Both in its raw and processed forms, tomatoes are central to most African diets and remain a regular ingredient in many soups, stews, sauces and dishes across the continent.
Sadly, despite the ‘celebrity’ status of tomatoes in Africa, our continent does not provide enough tomatoes to meet its own needs. Almost every country in Africa consumes more tomatoes than it produces.
The rest is imported from outside the continent, especially from China – which is now the world’s biggest exporter of tomato products.
I would like to give you a sense of how serious and highly ridiculous Africa’s tomato situation really is, and I’ll use Nigeria as a case study.
Nigeria – Africa’s largest country by economy and population — is sub-Saharan Africa’s biggest producer of tomatoes. It produces up to 1.5 million tons of tomatoes every year, making it the 14th largest producer of tomatoes in the world.
However, despite Nigeria’s strong position in tomato production, it still spends up to $500 million – every year — to import tomato products (especially purees, pastes and canned tomatoes), making Nigeria one of the biggest importers of tomato paste in the world.
But how come Africa’s biggest tomato producer is also its biggest importer?
Well, it appears more than 50 percent of tomatoes harvested every year in Nigeria never make it to the market. Due to poor storage and a lack of processing options, a lot of tomatoes harvested in Nigeria is wasted.
Another reason is, in most parts of Africa, tomatoes are mainly grown by small-scale rural farmers who have limited access to good seeds, fertilizers and pesticides. They also depend on natural rainfall to grow their tomatoes which makes the harvests unpredictable and inconsistent.
Nigeria is not alone in this. This same ugly tomato situation is at play across the continent; from West and East Africa to Southern Africa.
As Africa is expected to have the world’s fastest growing population over the next 30 years, the number of people on the continent is expected to reach 2.4 billion by 2050 – that’s double its current size.
If Africa already spends nearly $1 billion on importing tomato products, how much will we be spending on tomatoes in 30 years’ time?
Unless we plan to remove tomatoes from our diets, Africa must take quick, deliberate and strategic steps to meet the domestic demand for tomatoes, and reduce its dependence on imported tomato products.
Africa still has vast uncultivated arable land that’s well suited for tomato production. With our favourable climate and abundant labour, our continent has the strategic advantage to become a net exporter of tomatoes to the global market.
Fortunately, there are already a few smart entrepreneurs on the continent who have observed the huge and lucrative gaps in Africa’s tomato market and are already making some good progress.
In this article, we’ll take a close look at some of these entrepreneurs and businesses that are positioning themselves to profit from Africa’s multi-billion dollar tomato consumption market.
Let’s meet the Entrepreneurs Solving Africa’s Tomato Problems
If you’re looking to start a business that makes money, I can guarantee you that finding solutions to serious and expensive problems is one of the best and easiest ways to succeed in Africa.
In Africa, the bigger the problems you can solve, the bigger the profits and returns you can make.
By taking on the serious problems of tomato shortages on the continent, these entrepreneurs and businesses are producing local substitute products that compete with – and will eventually overtake – imported tomato products in Africa.
Let’s meet them…
1) Ntuseni Nesane – From Farm Labourer to Tomato Millionaire in South Africa
Dr. Ntuseni Nesane is one of the most successful tomato entrepreneurs in South Africa. Now 71 years old, he has been in the business of tomato farming for more than 40 years. With no formal education, he started his agribusiness with only a donkey and a plough.
His farm, Tshalata Farms, produces roughly 14,400 tons of tomatoes per season and employs more than 200 employees. Every year, his farm business spends up to 3 million Rand (over $200,000) on labour alone.
After working for eight years as a farm labourer, Dr. Ntuseni decided to pursue greener pastures in the city. But after a futile search for a better life in Johannesburg, he returned to the village to start a small farm with his little savings.
From the 10 hectares of land he started with, his business now farms on over 400 hectares. Although his tomatoes are primarily targeted at the South African domestic market, his business also exports tomatoes to Mozambique, Zimbabwe and Botswana.
For his outstanding work and contribution to the economic development of his country, he was awarded an honorary doctorate in Philosophy by the University of Venda in 2012.
If every African country had a few people like this, I’m sure we wouldn’t have to worry about tomatoes anymore.
2) Tomato Jos – Processing fresh tomatoes into tomato paste in Nigeria
Started by Mira Mehta and co-founder — Shane Kiernan — in 2014, Tomato Jos is a social business that’s working hard to revolutionize tomato production and processing in Nigeria.
While working with an NGO, Mira experienced firsthand the tomato market glut in Northern Nigeria. During her travels, she would pass miles and miles of tomato fields, and notice the large heaps of tomatoes just rotting on the side of the road because farmers couldn’t sell them.
Mira also discovered how, despite being a major producer of tomatoes, Nigeria spends millions of dollars on tomato paste imports. That’s when she made up her mind to pursue the huge business opportunity – processing locally produced tomatoes into high-quality tomato paste in Nigeria.
Today, Tomato Jos operates across the entire tomato value chain (farming, logistics, and processing) and sources raw tomatoes from its network of over 100 smallholder tomato farmers in Nigeria’s North Central region.
Starting with a pilot project in Nigeria’s Nassarawa state, Tomato Jos has successfully raised capital through a variety of channels, including angel investment, prize money from competitions, and crowdfunding. In November 2014, the business successfully raised $55,000 on Kickstarter.
The business is currently in the process of raising up to $2 million in Series A investment.
3) King’ori Mathenge – The Kenyan entrepreneur who grows organic tomatoes in greenhouses.
Like most young Africans, King’ori wanted to work at a corporate job after he graduated from university. But after he spent a year searching for a job and couldn’t find one, he started to think seriously about starting his own business – organic tomato farming.
This 29-year-old entrepreneur currently owns four greenhouses where he farms organic tomatoes using green manure, compost and biological pest control. He gets the manure from the 450 chickens he also raises on his farm.
According to him, greenhouses provide constant warm temperatures that speed up the growth of his tomatoes and reduce the risk of fungal infections.
But starting wasn’t easy. He had to convince his father to let him use the family’s quarter of an acre. That’s where he built his first small greenhouse where he grew 400 tomato seedlings. That pilot farm earned him about KSh90,000 (roughly $900) in six months.
From that first greenhouse, he went on to build three more. To date, he has earned over KSh480,000 from this business and is making further plans to expand.
His biggest customers are hotels and organic-conscious consumers.
I wonder. If just one percent of Africa’s 250+ million young unemployed could start a small neighborhood tomato farm like King’ori, would our continent still have to worry about tomato supply now and in the future?
4) Aliko Dangote – Africa’s richest man enters the tomato business
It’s often said that if you want to know where the real business opportunities are, watch and follow where the rich are investing their money!
This year, Aliko Dangote — Africa’s richest man — formally opened a $20 million tomato processing facility in Kano state, northern Nigeria. Dangote’s plan is to compete for a share of Nigeria’s lucrative tomato paste market, which currently depends on imports from China.
The new tomato processing plant, built by Swiss-based Syngenta, has the capacity to produce up to 400,000 tons of tomato paste every year for the Nigerian market.
Following Dangote’s massive successes with cement, flour, sugar and salt, you can be sure that he can already smell the roses in Africa’s huge tomato market. And if this first tomato processing business in Nigeria turns out to be very successful, your guess is as good as mine – Dangote will roll out more across the continent!
Working with a network of over 50,000 smallholder tomato farmers in Northern Nigeria, Dangote plans to pay these farmers a guaranteed price of about $700 per ton of tomatoes compared to an average of less than $350 which they earn by selling on the open market.
If Dangote’s Midas touch works with tomatoes, like other essential commodities he has succeeded with, Africa has a good chance of becoming ‘tomato-independent’ in the future.
However, the demand and consumption of tomatoes across Africa is just so huge that Dangote’s efforts alone may never be enough.
We need more entrepreneurs to join in, especially if Africa is to become a net exporter of tomatoes to the world!
A few things to keep in mind before you enter the tomato business
I always do my best to make my articles inspiring and informative. And that’s because my goal is to get you to take action!
So far in this article, you’ve seen how big the opportunity in tomatoes really is, and how a few smart entrepreneurs on the continent are already building successful businesses to profit from the huge market.
But before you jump into the tomato business, here are a few things you should keep in mind:
a) Tomato production is good, but processing is where the money is…
As you may have noticed, most parts of Africa already produce lots of tomatoes. The problem is waste. Because harvested tomatoes are not stored, preserved or processed into more stable forms, we lose most of the tomatoes we produce.
Across the continent, there are thousands of smallholder farmers who have been farming tomatoes for decades. If you’re thinking of farming tomatoes too, you have to be sure you have some kind of competitive advantage – like better access to markets and consumers, better storage and preservation that allows you to target the market when tomatoes are scarce during off-peak periods, or maybe focusing on growing organic tomatoes that appeal to green consumers.
But tomato processing is still a virgin business opportunity on the continent. Although it’s more capital-intensive than tomato farming, tomato processors have access to a huge and cheap supply of raw tomatoes to work with.
Bottom line: I’m not saying you shouldn’t produce tomatoes. Just make sure you look well before you leap.
b) Start small. Learn the ropes first
One of the biggest mistakes most new entrepreneurs make is starting big. On Smallstarter, we advise otherwise – start small.
Especially with tomatoes, which require close attention and constant care, you need to learn the ropes first on a small-scale before you bet your life on it. Tomatoes are quite sensitive to heat, water and soil conditions. So, if you want to succeed in the tomato production business, you really have to know what you’re doing.
Same with processing. You need to know the size of the market you’re targeting. This will help to determine the capacity of the machines to buy and the number of people to work on the plant. You also need to have some technical capacity to ensure the processed tomatoes (paste, puree etc.) meet your country’s health, safety and quality standards.
I did some digging and found an interesting resource you would love. It would be very helpful and get you started with tomato farming and processing:
This free information-packed resource focuses on good practices for growing healthy tomato crops and obtaining a reasonably steady yield. It provides practical information on small-scale cultivation, harvesting, storing, processing and marketing of tomatoes. Seed selection and conservation, integrated pest management methods and record keeping are also covered. The information in this 92-page book will be helpful to both beginners and more experienced tomato farmers. To download the book, Click here.
c) Greenhouse tomato farming is the future
The use of greenhouses for farming vegetables like tomatoes is really taking root, especially in East Africa.
Greenhouses reduce the amount of labour required to farm tomatoes, and significantly increases the productivity of the land per square meter. Better still, greenhouses allow you to better monitor and control weather conditions and pests which significantly affect tomato production in open farmlands.
While many people still think the cost of setting up a greenhouse is high, there are some local alternatives that can be built with cheap local materials.
In the video below, you’ll learn quite a lot about how to farm tomatoes in greenhouses and several important tips that will increase your chances of success.
Final words… Africa can lead the world in tomato production!
Africa can surely do better than just meet her own tomato needs. We have the land, human and market resources to make tomatoes a multi-billion dollar business that meets both domestic and international demand.
Gladly, the chain of events that will make this happen has already started. With the efforts of the entrepreneurs covered in this article, and more who are joining them, I’m very optimistic there will come a time when Africa becomes a net exporter of tomato products.
The tomatoes we eat everyday cannot continue to come from Asia, when we have ours. We need to stop this madness.
We can do this.
Let’s go Africa!