Maize trading changes Iringa farmer’s fortunes

What you need to know:

  • Some will tell you about how they struggled through ups and downs for many years while others will tell you about their less stressful ascendancy in business.

Iringa. If you ask successful businesspersons about their journey to success, everyone will give you his/her own interesting story.

Some will tell you about how they struggled through ups and downs for many years while others will tell you about their less stressful ascendancy in business.

Currently, for those who want to do business, capital is one of the major challenges. However, those who have already made it to the top say capital was not their biggest obstacle.

“Determination, hard work and trust are among the things that should be considered by whoever wants to venture into business. Whether it be small, medium or large,” says Mr Atanas Paulo Kipeto, who is one of the successful maize traders based in Iringa.

He shared his story to BusinessWeek recently on how he started his business with a small capital of Sh42,000 in 1995, before turning it into a multimillion shilling activity in just two decades.

Speaking to BusinessWeek in Iringa recently, Mr Kipeto, who in his mid-40s, said after his primary school education in the late 1980s, he was not selected to continue with secondary education.

“My plans were to start my own business and that is exactly what I did two years later,” simple-looking Mr Kipeto said at his office, which is located near Ipogolo Bus Terminal in Iringa Municipal.

He said after completion of his primary education, he started cultivating maize for two years. He retained part of the produce for food and sold the surplus to the local market.

Mr Kipeto said two years later, he managed to raise a Sh42,000 capital, which he used to buy maize from neighbouring villages and transported it to various semi-urban markets where he sold at a relatively higher price.

“I started by purchasing seven 100-kilo bags of maize at Sh6,000. I sold the maize at high retail and wholesale markets, where I generated a small profit,” he said.

He said he sold the bags of maize at Sh10,000, which generated a profit of Sh2,500.

“I used the small profit to expand my business until 2002 when I decided to add value into my maize business,” he explained.

Mr Kipeto said in 2002 he purchased a small milling machine and started milling his own maize as well as that purchased from the villagers.

“I started producing maize flour, which I sold in Iringa town and other markets in neighbouring villages,” he said. Six years later, in 2008, Mr Kipeto said he started building relations with maize farmers in Kilolo District, which made it easy to get sufficient maize to feed his milling machine.

He said during that year, he travelled to the Democratic Republic of Congo (DRC) to explore the market of his maize flour and managed to secure lucrative markets.

After securing the market, he came back to farmers and encouraged them to form a group, which started producing more maize for his milling machine in order to meet the demand of the new Congolese markets. “Sometimes, I used to run the milling machines for just half a day because of insufficient maize,” he said.

According to him, he continued with his maize and flour business for seven years until 2015 when the Alliance for Green Revolution in Africa (AGRA) through Tija Tanzania project came to Iringa to support the maize farmers and processors to boost productivity and incomes.

AGRA technical and financial supports guided him to expand his milling machine business as well as secure markets for his flour besides helping farmers to produce high quality maize for both domestic and international markets.

His milling machine now produces 1,100 tonnes of maize per year from 200 tonnes milled before improvements through the AGRA’s support.

AGRA, through different agencies also supports the farmers to access improved seeds, fertilisers as well as markets for maize. This has helped improve food security significantly and farmers’ income.

Currently, Mr Kipeto has built a multimillion shilling business, but he is not done just yet. He wants to build his own financial and technical capacities.

“My business is now valued at more than Sh600 million, but my plan is to make it grow more including buying modern milling equipment, packaging technology and opening shopping outlets for my products in different regions of Tanzania,” he said.

He said he is now building a Sh270 million warehouse for storing maize purchased from the farmers. The warehouse will have the capacity of storing at least 1.2 tonnes of maize.

His business is currently employing five permanent employees at both office administration and milling sites, but he said he wanted to create more direct and indirect job opportunities.

Currently, Mr Kipeto has a contract with 2,500 farmers, who supply maize to his fast-growing factory. The contract farming model has also enabled the farmers to access loans for inputs from commercial banks and other financial institutions.

He mentioned some of the challenges he is facing as higher taxes including income, service levy as well as high regulatory and licensing fees. “All these hurt my business because nearly 40 per cent of my income ends up in paying taxes. The net earning is just 18 per cent,” he said.