Meet one of Nigeria’s thriving agro-prenures, Ahmed Alli

Below is an interview with an inspiring investor who has gone all the way to engage in a major agricultural investment. His results have been instructive.

Tell us about your small beginning?

Mayor farms began as a result of the need of the promoters to diversify their business interest. We therefore sought an industry where our impact will be most effective in meeting the critical needs of society. We settled for Agriculture, that was in mid 2011.

We commenced by visiting many poultry farms from where we were able to observe the positive practices and mistakes being made by those farms. From these observations, we were able to draw up our business plan, and we rolled out by nominating one of our directors, Mr. Ahmed Alli, to undergo a certificate course in poultry management and saddled him with the responsibility of fully managing the enterprise with support from the Board of Directors.

 We acquired 10 acres of land at Elere Village at Obafemi Owode Local Government of Ogun State and constructed a 5,000 capacity pen, purchased point-of-cage(14weeks) from Animal Care Konsult in July 2012, after 6months the flock increased by 7,680birds, acquired additional land.

With the support of our investors, we were able to construct a 16,000 capacity brooding facility, constructed 2 large pens of 7,680 birds each with support of a commercial bank. With good practices of accurate and up to date financial records, good bio-security measures and positive growth, we exited the very expensive commercial bank facility and applied for the Central Bank Commercial Agriculture Credit Scheme (CACS) Facility through First City Monument Bank Limited (FCMB), in whom we found a partner and we were availed N80million term loan fund for expansion of our facilities.

Today, we have over 40 acres of land size (though less than 10 acres is presently being utilized), over 34,000 laying birds producing over 900 crates of egg daily, we have over 50 women distributors spread across Lagos and Ogun states whom we deliver eggs to their shops daily with soft credit (interest free) for them, this is being managed by our sister company, Meetneeds Investment Services Limited.

We employ over 40 staff as pen attendants, farm supervisors, sales representatives and others, our staffs are provided free meals daily and well remunerated, and there is a farm house with accommodation for 20 staff. Our Office complex, egg store and a 200 ton feed store are almost completed (over 90% completed).

Where do you hope to be in the next five years?

Our aspirations are very modest by the end of 2015, we would have achieved 40,000 laying birds capacity to signal the end of the 1^st phase of our business plan. The 2^nd phase will see us move into meat production, where we plan to rear, process and distribute broiler birds.

We want to see Mayor Farms in the next 5 years being able to contribute to the health and wealth of our people through provision of locally reared, processed and hygienically packaged poultry meat while at the same time empowering other young Nigerians to engage in production of wholesome poultry products that would meet our local demand.

We are really not interested in being the biggest or No. 1 but to provide quality product (eggs and meat) and convenience to our customers, we just want to fill our space.

What attracted you to this line of business and what challenges have you faced in the past 4 years?

The ability in being able to be relevant in supplying the basic human need; food was a major driving force that motivated us to go for agriculture. Ability to get trained and learn from other existing poultry farms solidified the interest. The major challenges we have faced include; high cost of inputs(feed) when compared with the returns/price of eggs, seasonal and frequent scarcity of grains to produce feeds, litter management and sourcing funding especially making the banks understand our business dynamics so that the appropriate funding can be prescribed and provided.

Has government policy affected your business?

Government policy on the contrary has been favourable to our business such as the Commercial Credit Agriculture Scheme(CACS), which come at single digit interest rate. 0% VAT on unprocessed food products such as eggs.

Tell us about the innovation you have brought to this line of business

We’ve been able to introduce some unconventional practices which have contributed to our productivity a great deal especially for the farm of our size. Our veterinary services are outstsourced, our feed milling/production are outsourced(we buy finished feeds), our accounting/financial activities are outsourced, we grant 3-7days interest-free credit to our distributors and we also deliver eggs to their shops at no charge to them. Litter management in our pens is less-power intensive due to the nature of construction of our pens where we take advantage of the gradient of the land to move litter.

What are the challenges you faced with access to finance and how have you resolved it?

Access to finance has been very challenging and frustrating especially when you have to borrow from commercial banks who want to lend at rates as high as 32% to farmers with short repayment tenor of 1-3 years.

Lack of understanding of the structure of loans suitable for farmers coupled with impossible conditions precedent to drawdown on loans. We’ve been able to manage these challenge by outsourcing our financial management to our sister company, Meetneeds Investment Services Limited.

They manage our inventory, production records, distributor invoices, sales, expenses and receivables which they post daily into our software. They also help with our loan applications, cashflow projections and other documentations needed by the bank, they also advice us in financial negotiations and also source investments for us.

We’ve adopted this model because handling these functions ourselves can be very distracting and would make us less efficient. So we face the core business of production.