Augustine Agorua of Dahmos Integrated Farms shares his huge poultry and fish farm story and the huge opportunities in Nigeria’s food sector.
The journey to being a farmer started when I was in university. While at university, I used to travel from Abia State University to University of Nigeria, Nsukka. On one occasion, my friends and I were hungry in the evening and went to buy ‘fries’. Then I realised that ‘fries’ were actually made from yam and plantain. And students often trooped in numbers to buy. Then it occurred to me that I could do something like that in my university to make extra money. That idea metamorphosed into a restaurant.
Before then, I had made an investment in gold. Back in the 1990s, it was in vogue for women to gold from Saudi Arabia to resell in Nigeria. I invested about N30,000 in the business and in four months, I made a profit of about 35 per cent from the business. That formed the capital I used in starting the restaurant business. Before opening the restaurant, I had realised that everybody planned to eat and always made a budget for it. When we started the restaurant, many students came to open account with us and deposited money in order to secure their everyday food. At the beginning of every semester, I had lots of cash from students who wanted to secure food for the month or the semester. While running the business, I often faced challenges in sourcing meat, chicken, vegetables, etc.
My foray into palm oil business
After graduating in 2000, I continued to run the restaurant business on campus. The shop generator developed a fault and I needed to fix it. The engineer I called to fix it took me to see person who had trained him in the business. It happened that he used to fabricate machines used in producing palm oil. From there, I leased a palm plantation and started a palm oil producing mill. By reinvesting the proceeds from the restaurant, I made much progress and produced the best palm oil in the entire eastern Nigeria. Due to the high quality of the palm oil, people often bought it and mixed it with other oil they bought from other producers.
Early mistakes and stress
I made a great mistake when I traveled to Accra and needed to spend some time for personal business. When I returned, the oil business had folded up because the manager who I had hired mismanaged company funds and ran the business aground. I learnt the hard lesson that you don’t leave your business in the hands of people. It was also becoming tough to successfully manage the restaurant as I was hardly around. So I decided to sell the restaurant and shut down the palm oil factory after about six months. This taught me a great lesson about doing and managing business in Nigeria. Then I had a very long period of inactivity, stress, being broke and thinking about failure. After these lean times, I started to toy with the option of going into food production. This led me to start investigating the food chain where the opportunities were. Finally, I discovered a niche area and that was how we started a cat fish farm in 2004.
I needed to train and up-skill myself
I went for training on the psychology of the fish and how to run a successful fish farm. I consulted my friend who is a veterinary doctor and I kept studying about fish farming. The more I studied, the more
I realised that it was good business because everybody ate fish. I started out with a small fish farm in Aba in order to test the market. I discovered that there was a huge supply gap in the cat fish market. I then moved to Abuja in 2008 where I had 12 trampoline ponds. But I had problems in sourcing for water for the fishes. I solved this by looking for a large piece of land in Kuje close to a river and expanded gradually to where the fish farm is today.
- Started off by selling ‘fries’ – a yam and ripe plantain delicacy – while in university.
- Bought and sold gold in the 1990s. He invested N30,000 and made a profit of about N10,500 in four months,
- His ‘fries’ business metamorphosed into a restaurant in school -where students deposited money ‘to secure their everyday food’ at the beginning of every semester.
- Upon graduation in 2000, he leased a palm plantation where he produced the best palm oil in the entire eastern Nigeria.
- Sold his restaurant and closed his palm oil factory after it was mismanaged by a manager.
- Started his cat fish farm in 2004 in Aba and moved it to Abuja in 2008. His Kuje, Abuja farms can do about 120 tons of fish per annum in batch formulas!
I have traveled to Songhai in Benin Republic and Cross River state in Nigeria, in order to improve myself and learn the rudiments of running a successful fish farm. The training focused on poultry, fish farming, etc.
At the end, I completed a one month intensive programme on poultry and cat fish farming. Through experiences, interactions, studying and exposure, I have built friendships and partnerships with people who have had farms for a long time.
The 120-ton fish farm
We have a capacity for 8,000 laying birds, all in cages and brooding pens for another
7,000. We have a feed mill and 14 mini-ponds with a capacity of between 1,200 to 1,500 cat fish per pond. We have three dams which have a total capacity of 66,000. We will be able to conveniently do about 120 tons of fish per annum in batch formulas. And that’s huge.
Presently, all our eggs for the foreseeable future are sold out. But I refuse to take money ahead of the production, otherwise, I would have heard all our eggs taken up for the next two months. The market for eggs is huge. For fish, I have never had fish that I could not sell. The biggest challenge with the fish is not the sales but the production i.e. achieving what the market wants and at the price that they want it. I had thought I could sell and produce at my own price but competition fixes prices that you have to match because we are competing with people from the western and eastern parts of Nigeria who have large bodies of water and can produce at very low costs. Their cost of production and input are cheaper and so they can afford to sell at cheaper rates. In northern Nigeria, you have to build ponds made of concrete, but in the east they use mostly earth ponds and all they have to do is excavate. The market will always mop up your product but production is tasking. In order to meet up with up competition, we have to find ways to produce cheaper to maintain profit.
Never worked for anyone
The plan my parents had for me was to study accounting, be a chartered accountant and work in the banking sector which had a lot of opportunities then. But I woke up one day with this feeling that if ever got in to banking that I was going to die. First of all I couldn’t stand being in one place, a cage dispensing money, so I ran with all the strength I had. Also, I already owned a restaurant from school which was giving me money. I never lacked money as a student and I had excess. Then the starting salary in the banking sector was N30,000 to N40,000. I was making more than that. I believed I could make it on my own.
Entrepreneurs are born?
I think entrepreneurs are born because it’s an instinct that drives you and not trend. No doubt there are training required to be a good entrepreneur, but the instinct that drives you to be independent and do your own thing is inborn. If you don’t have it, you don’t have it. I think I have it. So when my parents drove me to go work somewhere to be like someone, it didn’t work.
Sleeping in the farm…
To be an entrepreneur, you don’t have the 9a.m. to 5 p.m. time because you have work 24 hours. You have to be able to manage your time to combine your family, business and relationships. I sleep in the farm when I have to. When you look around the farm, it might look uncomfortable but I’m okay sleeping here.
Sometimes, I have to stay here till 4a.m. Nevertheless, I have to balance it with creating time for other needs of life. Secondly, in Nigeria you are basically on your own as there is no structure. Financing is another ball game. The conditions to access bank financing are herculean. But I didn’t give up or run or run away because I looked for possibilities. I look for other means to make it work. I reinvented, re-created and found ways to make my business survive and profitable.
Place of integrity
Integrity has helped me through the years and I think that one of the key ingredients entrepreneurs need is integrity. People need to trust you and hold you to your word. Then they will invest, in you. Family members have given me money to invest and expand because they trusted me to do what I said I would do. I get many supplier credits because they believe that I am running a good enterprise. But it is a factor of people believing that I am a serious entrepreneur who has integrity.
Two years ago, I received an award as the business man of the year from the Abuja Enterprise Agency (AEA). Tears ran down my eyes because it was one award that captured what I’ve done over the years. The award was an external recognition of what I have been able to achieve. This award motivated me to go to the next level in my business. From there, I worked with the Agency to train young farmers. In collaboration with them, I designed the Agro-revive Project to motivate people into agriculture. It gives me a great joy to see a chick grow in three weeks and start producing eggs on a regular basis.
I encourage apprenticeship. For anybody who wants to start a business, I advise that you learn, meet up with people in the same field, get training, build relationships, study and learn the secrets. Then set up gradually, start small and grow.
I always think through a process. Don’t ever start anything without thinking it through. Find out and investigate all that could possibly go wrong proactively provide solutions for them. After you have checked, things can still go wrong. And when you have internalised that all things can still go wrong, you are the entrepreneur.
Create a business structure
My palm oil business failed because I travelled, plus the fact that it was a one man business. I’ve learnt that you have to create a structure for your business. Four years ago I redesigned my business. I brought in professionals, a veterinary doctor, a human resources person, a lawyer and a financial analyst. I need to get to the next level and their expertise and professional advice will help the business. Today, the company can function without me in the farm. When a business is properly structured then, you can travel and attend to other needs. The lesson is that people who structure their business around them are exposed to huge failure.
Opportunities in the food sector
In the past few weeks, the government has rolled out its school feeding programme that requires that about N93bn be pushed into the food system. The minister of agriculture just signed a memorandum of understanding with a farm for N25bn for 50 million eggs a day called National Egg Production Promo a.k.a. Egg Pro. It is a clarion call for more food. For me, the opportunities are expanding. Rural urban migration in Nigeria is increasing every day. If we assume N100 per meal every day multiplied by 38 million households, the opportunities are huge in food and agriculture. If we are not producing, there will be food scarcity in the country.
First of all, minimise your costs at the beginning, live within your means. Start small, create a world for yourself away from distractions and focus on your goals.