Hussein A. Jakhura, alongside his son, started Malawi-based Nyama World in 2009 and focused on processing beef and goat meat for sale to the domestic market through its own outlets. Today, it operates across the complete livestock value chain: breeding, rearing and feedlot farming, processing and deboning, and selling beef and goat meat for the local and export markets. Jeanette Clark speaks to Jakhura about vertically integrated growth and unique distribution strategies.
A family of entrepreneurs
The Jakhura family, fourth-generation Malawians, has always been involved in business. Before cattle rearing and meat processing became their focus, they were involved in commodity trading, flour milling and the sale of high-protein foods.
Between 2007 and 2009, the family settled temporarily in Dubai. It is here that Jakhura was inspired by the book Blue Ocean Strategy. Written by W. Chan Kim and Renée Mauborgne, it concentrates on the importance of differentiation in a saturated market. It got him thinking, especially when he realised there was quite a demand from the United Arab Emirates (UAE) for quality meat. The idea for Nyama World was born.
“In Malawi, there were some meat businesses. People have, for example, always bought and sold beef and goat meat, but there was no export-certified modern slaughter line and abattoir in operation. Our idea, to make it state-of-the-art, was unique,” says Jakhura.
The business was registered and the family set up a small factory for processing meat, adding outlet stores from where the company could sell beef and goat meat. Occasionally, when they could find farmers who reared and slaughtered in line with the family’s religious beliefs, it would be added to the product list. However, the quality of the beef was not what they wanted.
Importing a breed
Nyama World conducted research to find the breed of cattle to elevate the quality. “We settled on Bonsmara, the South African breed. In our research, we found that not only was it the best breed for quality, but also for commercial viability,” he explains.
In 2013, the company received US$300,000 from the International Fund for Agricultural Development, which was used to train farmers and start a breeding programme in Malawi; first through artificial insemination with imported Bonsmara semen, and later by bringing stud bulls into the country.
Nyama World then got another grant of $750,000 from the Malawi Innovation Challenge Fund to assist in expanding the business to cover a bigger part of the value chain: from feedlot to factory.
Finding the finance to finish the processing facility
“The grants we received helped a lot but it was not sufficient to complete our vision,” acknowledges Jakhura.
“From 2014 to 2016, we wrote and submitted more than 90 proposals to financial institutions locally, regionally, even internationally.”
It wasn’t easy. Nyama World’s founders were adamant about finding non-interest-bearing Sharia-compliant funding and found a match for their needs at the end of 2015.
“Norfund, the Norwegian investment fund for developing countries, showed keen interest. It concluded its due diligence in 2016 and provided us with $2.75 million in debt funding. With this, we finished the abattoir and meat factory in the Sonda Industrial Area in Mzuzu (situated in northern Malawi). All the components were designed and made in Ireland and assembled by the Irish here in Malawi.”
Norfund then provided another debt facility of $400,000 that helped get all the operations in place.
The company’s feedlot can now house 3,000 animals at any time, with the possibility to expand it to 15,000.
Partnering with local farmers
One year shy of a decade since the breeding programme kicked off, the company now sources cattle for feedlot farming from between 100 to 150 farm clubs. “There would be 30 to 50 local smallholder farmer members in a club, which means we work with more than 4,000 farmers at a time,” says Jakhura.
Weaned male calves are bought from the farmers at about six months old. If the farmer wants to sell, the company will take the female calves as well. “We advocate for the farmers to keep the female calves so they can continue breeding with the genetically upgraded stock. The cattle we bring to our feedlot then receive natural feed; no genetically modified crops or growth hormones are used.”
According to Jakhura, their abattoir is the only certified non-stun halal facility (where animals are not first stunned before slaughter) in southern Africa. It is also certified by Lloyd’s of London and through its accreditation and certification received from the South African National Halaal Authority, it can export the meat to the Gulf.
Getting all of this in place took time and money but has set the company up for future success.
Making a plan during the political impasse
Between May 2019 and June 2020, Malawi had a political impasse, following a dispute over the results of the 2019 elections. The country’s constitutional court overturned the results and the opposition leader was elected in a new presidential vote.
During this time, there were protest demonstrations and many retail businesses, including eight of Nyama World’s outlets, closed their doors. This is when Jakhura’s son, the managing director, suggested they turn to a new distribution channel: the women vendors who – come rain or shine – kept selling products and goods in the local communities. While retail outlets could not remain open, these vendors continued with business even through unrest or political demonstrations.
“We now have only three retail outlets, down from 11, but we work with around 30 Malawian mother entrepreneurs. We lend them the freezers from the outlets we closed and they commit to a minimum purchase value per month. This distribution network has now taken our product to north and central Malawi,” says Jakhura. “Our revenues have grown as we cut overheads and, by empowering these female sellers, we increased the reach of our product.”
The company hopes that 80% of its domestic sales will go through this channel this year. The rest will be through its own retail outlets.
Growth and exports
At full capacity, Nyama World will be able to process 240,000 goats and 15,000 cattle per annum.
“We could produce 300 tonnes of meat per month if we were at peak capacity but at the moment, we are not utilising 10% of our capacity,” says Jakhura.
With the world moving through the pandemic, Nyama World hopes to increase growth and continue exporting.
Of its four brands, Nyama Bonsmara is the one earmarked for export. Nyama Choice Beef is fattened feedlot cattle from the local breed. If the cattle are bought directly from the smallholder farmers without taking them through the company’s own feedlot, it is sold as Nyama Zebu, grass-fed beef. Then there is Nyama Mbuzi, the goat meat line.
So far, Nyama has exported a few consignments of beef to Kuwait and goats to the UAE. Then Covid-19 hit. “The pandemic meant export logistics were non-operational for months. We went through major financial constraints. To combat this impact, we have been looking for equity partners.”
Once logistics make commercial sense again, the company’s export focus will be on the Southern African Development Community (SADC) region and the Middle East.
credit – howwemadeitinafrica.com