When you ask Timi Oke, founder of Nigerian agricultural processing and trading business AgroEknor, where the company’s focus will be in the coming years, he highlights the importance of growing the company’s supply of hibiscus flowers. This will be done by expanding its current network of outgrowers – smallholder farmers growing the crop specifically for the company.
This, he believes, plays into a global trend where the traceability of products in the supply chain is becoming increasingly important for food- and agri-businesses. Consumers are demanding to know exactly where the products they buy originate. “Consumers in many parts of the world require verifiable evidence of traceability as an important criterion of food product quality and safety.”
AgroEknor’s key focus is hibiscus, a flower currently in high demand for processing into tea as well as an ingredient in various wellness products in its powdered form.
The plan is to be the dominant hibiscus exporter from Nigeria, says Oke. “There is a market demand we cannot meet, we have a supply deficit. Hibiscus has been identified as an organic antioxidant and, in the past year especially, with the impact of Covid-19 and people becoming more health-conscious, we have had multinationals reaching out to us to supply.”
The company’s hibiscus flowers are sourced mainly from smallholder farmers across Nigeria. Oke explains exporters have to align themselves with the trend of traceability, which means they have to get involved in the supply chain.
When AgroEknor started trading in 2012, the company fulfilled its first orders with hibiscus from aggregators that gather the crops from smallholder farmers and then sell to clients for processing or export.
“We found out that when you buy from aggregators, you have little control over your sourcing price because, in the end, aggregators are in it for the business as well. They want to make as much money as possible,” says Oke.
He realised supply security with more control would be important for success and, by the third year, AkgroEknor had its first trial planting with a small group of outgrower farmers in Jigawa state in northern Nigeria. “We provided finance for them to grow the flowers. We were one of the first exporters that had an investment in farming.”
This outgrower scheme has grown to a network of over 2,000 farmers and the company is currently in discussion with two other state governments to grow hibiscus on the same model. Eventually, the aim is to create a network of around 5,500 outgrowers in each of the three states.
“A lot of those farmers are already hibiscus farmers, we just want to put them under our scheme,” Oke adds.
The company believes in the importance of investing in this source network for growth. It has provided training for over 3,000 farmers in agricultural processing and has arranged upwards of $500,000 in credit capital to 1,626 of the smallholder farmers in its network.
The investment has paid off, says Oke. The company’s annual export volumes have grown to over 2,000 tonnes.
Establishing the relationships with smallholder farmers in the beginning was crucial, reveals Oke. As their first partner farmers were from the north, AgroEknor worked within the cultural nuances of a very diverse country by having Oke’s partner – who hails from that state – make the initial introductions.