Zero To Scale: Kenneth Obiajulu — Co-founder and CEO of Agricorp International

Zero To Scale (ZTS) is a web series that focuses on the journey of African founders and their startups from day zero until the day they achieve scale. ZTS is produced in partnership with OneRoute, an all-in-one tool for your customer communication needs.

Agricorp International Development Limited is on a mission to put Nigeria on the global export radar by investing and building simple processing systems for spices and other agricultural products.

In this edition of Zero To Scale, we speak with Kenneth Obiajulu, co-founder and CEO of Agricorp. He talks about how Agricorp is different from other agritech startups and the role of technology in agriculture.

What's Agricorp origin story?
While I was working in the development space, I worked on several projects that cut across the agricultural value chain. One of such projects is Partnership for Agriculture, which was funded by the Bill and Melinda Gates Foundation. The project entailed working with three Nigerian states to develop policies that would stimulate investment in agriculture. We worked to ensure the states focused on crops they have a comparative advantage in and crops that have local and international appeal.

For instance, Kogi state is known for the high production of Cassava and Rice. And for export, the state is known for Cashew. Benue can produce Cassava, Rice, etc. But export-wise, they are renowned for high-quality Sesame and Yams. Kaduna can produce Rice, Sorghum, tomatoes, and other local crops. And one of their biggest international exports is Ginger.

Ginger caught our attention because not only is Kaduna producing and exporting Ginger, Nigeria is one of the top three largest producers of Ginger in the world, accounting for 16% of global production. But the country could barely account for about 3% of the global export market share due to several reasons. So, Agricorp came up as a result of these gaps that myself and my partner identified as far back as 2016.

We started putting together the paperwork and ideas on how we can stimulate private sector investment to work with smallholder farmers and processors and get the international market to respond to these local activities. We incorporated in November 2018 and started full operations in 2019.

How would you describe the difference between Agricorp and other agritech companies?
We’re not a crowdfunding platform. Agricorp is an agricultural business that focuses on production, aggregation, processing, packaging and export. And we interface with almost all the stakeholders in the agricultural value chain, including farmers, input suppliers, technical specialists, aggregators, logistics, financing partners — which in this case are financial institutions, not individuals — international buyers and local off-takers.

We operate a B2B model in that we don’t sell products to the final consumer, we sell to businesses that require our products as raw materials for their production line. Case in point, there are pharmaceutical companies abroad that require Ginger in their production line, as well as Ginger ale and beer companies who need dry-split Ginger. There are local buyers who process it into spices, too.

Also, we recently acquired a poultry system with the capacity of producing three million to four million birds per annum. And we’re not selling directly to consumers but to businesses that require our products as input for their own processing activities.

Partner message—OneRoute

I read somewhere that Agricorp is proudly a Nigerian company with a UK office and that the UK office was established to enable Agricorp to expand into Europe. So, is it every region you want to expand into that you’d set up an office in?
I’ll give an example to answer this amazing question. In 2019, when we started full operation, we had three objectives: First, we wanted a business that can do a turnover of more than N100 million; second, we wanted to run a business that has the capacity to work with smallholder farmers and women processors; and third, we wanted to see if our products could be exported into the international market.

We were able to achieve two of the three objectives. We started with one and we discovered that there were international buying agencies locally that would mop up our products due to the quality and consistency of supply. On the second front, we were able to gather an excess of 75 smallholder farmers and women processors who work with us to dry and package the products. But we couldn’t achieve the third objective because of Nigeria’s battered image in the international community. A lot of buyers are sceptical of dealing with Nigerians and Nigerian businesses.

One of our customers in South Africa called me one day and said it just dawned on her that irrespective of who I am and the fact that we’re operating out of a UK office, she’s still dealing with a Nigerian and she doesn't know who I truly am. We laughed and talked for about an hour, but that perception is creating a lot of challenges. So, that’s why we registered a foreign entity that allows us to carry out the contractual obligations of dealing with our export customers as a UK entity. It’s a perception problem but it is what it is.

With that, we were able to reach out to a larger audience. People were able to say, we’re dealing with a UK business that has a Nigerian entity has its origin. So, they’d do the contract with the UK entity and the Nigerian office will supply the UK office to fulfil their contractual obligation. That was our way of getting into the international market and navigating the trust continuum that allows people to be able to trust our brand. And over time, customers’ testimonials become your evangelism tool.

Setting up a foreign entity was the growth lever we had to use to get into the international market properly.

That means you don’t need to set up offices in other countries. You can transact with businesses across the world from your UK office, right?
Yes, it’s easier to transact with clients across the world with our UK entity. But what we’re seeing now that we’ve built trust is that our Nigerian entity signs contracts with buyers in Morocco, South Africa, Dubai, and India. People are now comfortable transacting with either of the two entities since it’s the same company.

Can you speak more on your poultry venture, Project Eclipse, you mentioned in passing?
For us, Project Eclipse is like a shadow takeover of the existing structures and norms in agriculture to bring forward something that’s more sustainable and have the energy of the youths backing it.

Project Eclipse came into existence due to the challenges in the export market. For instance, there was a time when we couldn’t export anything for about three months because there were challenges at the ports and our customers were dropping off. In short, Nigeria was happening to us. As a result, we started brainstorming on what we needed to do to ensure continuous cash flow in case the challenges persist. What are the alternative areas of diversification that would enable us to have a great impact? We discovered there was an opportunity in the poultry industry. And we invested in acquiring some of the biggest poultry production systems in Nigeria. They are located in three locations, Kwara, Nassarrawa and Kogi.

What are some actionable insights you can share from your experience so far?
The first thing I tell people is agritech will never be 80% technology and 20% agriculture. It’s the other way around. People think technology is what would lead to a change in agriculture; some even think agritech is synonymous with crowdfunding. But that’s not the case. You’d never be able to replace the hard activities of being on the ground and producing with sitting at home and pressing your phone. Technology can, however, increase efficiency in agriculture through mechanisation for instance.

Our obsession with technology in agriculture is just an attempt to mimic what’s happening in fintech which is very different from agriculture. With fintech, you can provide almost all financial services via a smartphone. But agriculture entails so many hands-on activities like production, aggregation, warehousing, standardisation and processing. All of these things require human efforts, and technology, at best, can only optimise them. But it’d never be the core — like 80% of the process.

In addition to that, I’ve also learnt that you just need to get into it. You’ll never see the end from the beginning or the entire big picture. What you can do is to have a medium to long-term plan with several sprints. That means you run a 100-metre, evaluate and improve your plan. That’s how you grow.

You don’t want to be in a situation where because you want to start big or have an objective in your mind that you want to achieve, you don’t want to start at all until certain things are in place. What I’ve learnt over time is to get into it and open your mind to collaborations and partnerships. Focus on your core and let other people focus on their core.