Green Business Spotlight: Africa Spices (U) Ltd

Green Business Spotlight: Africa Spices (U) Ltd

15 MARCH 2022 | KAMPALA

A trip to Zanzibar inspired John Paul Ssengendo to manufacture spices. It was a discovery that opened his eyes to the opportunities and entrepreneurial potential that were before him. It was also at a time when there was a demand for spices in Uganda, yet the industry was still nascent.

"We started by buying ground spice products and experimenting with them," said Ssengendo, Managing Director at Africa Spices (U) Limited, adding: "we packaged the spices in tins and started hawking them. Over time, we realised the pioneer customers liked the product and demanded more, compelling us to start buying the raw materials from farmers, grinding and packaging them," narrated Ssengendo. At that point, he felt the need to support rural farmers by buying products from them.

Africa Spices is an agro-processing small-to-medium-sized enterprise that adds value to farmed spices sourced from rural spice farmers by grinding, packaging and branding them before sale. The enterprise considers the social wellbeing of the community by providing a market to rural farmers, supplying them with organic manure and creating jobs for young people, mostly women.

Africa Spices has been in operation for six years. Located in Wandegeya Central Market in Kampala and Naluvule-Nansana in Wakiso, the company currently employs more than 30 people. The enterprise creates employment directly for youth and indirectly for wholesalers and stockists, among others. It provides a backward linkage - manure to farmers, and also hopes to avail them with agronomy-related services.

 

"We reduce post-harvest losses among farmers, as we buy directly from them, and also help improve their income by cutting out middlemen," said Ssengendo.

 

The enterprise has experimented with processing organic fertiliser from rabbit urine, cow dung and other organic spice materials and they seemed effective. They started supplying the few rural spice farmers who supplied the company with raw materials. "This helped boost soil fertility, although we need to do more. We are planning to increase manure/organic fertiliser availed to farmers to at least 50 tonnes per year, either purchased, produced in-house or a mixture of both," said Ssengendo.

Just as many enterprises in Uganda, African Spices has faced challenges when trying to access finance to accelerate their business: "I once approached a microfinance facility for financing. However, the credit facility was more expensive than that of a regular commercial bank," said Ssengendo, adding that despite the hiccups, the efficient operations, keeping costs low and having positive cashflows have enabled the company to have a good credit rating with the Credit Reference Bureau.

The enterprise MD said that, thanks to UGEFA's catalyser workshops, his team has learnt how to present their business and value proposition. He added: "we also learned that teamwork is key; we have improved the way we prepare our business plans/proposals and financial projections; we have been encouraged to always have our financial statements/books of accounts in order; we have been given an opportunity to network with other SMEs; and, we have learned that preparing for financing or funding takes time and patience."

In the next five years, the enterprise lead hopes that Africa Spices will be among the top five local spice producers in the country, with outlets in every region. "We also plan to penetrate the Kenya, South Sudan, Rwanda and Congo markets. We are going to have more distribution partnerships (with Vivo Energy/Shell Shops, Unilever, etc.)," affirmed Ssengendo.