Omondi’s Strategies for Securing the Mexport Market

Frank Omondi, an exporter of macadamias for nine years, was troubled by middlemen taking advantage of smallholder farmers.

According to his analysis, middlemen receive take-home margins of up to 38% while small farmers, who account for the majority of macadamia growers, receive a pitiful 15%.

“To change this, we became the world’s first Fair Trade-certified producer of macadamia nuts,” says the co-founder and CEO at Grow Fairly, a macadamia and cashew nuts processor based in Kilifi County.

According to Mr. Omondi, Kenya’s macadamia is unique because it is smallholder-driven and organically grown, as opposed to South Africa or Australia, which means that there is a high demand for its worldwide.

capacity and vendors

Grow Fairly has currently hired 15,000 cashew farmers and 9,000 macadamia farmers, and it has built a factory with the capacity to process 400 to 600 metric tonnes of macadamia nuts and 600 to 700 tonnes of cashew nuts per month, respectively.

The future of farming in Africa, according to wildlife biologist Mr. Omondi, is with smallholder farmers due to the continent’s growing population.

Scaling and bulking are still challenges. To get around this, the company developed software that allows for the tracking, tracing, and weighing of produce using Bluetooth-enabled scales that are paired with the software and direct payments to farmers through M-Pesa.

solving the logistical problem

Food entrepreneurs have always struggled with collection, but one tactic Mr. Omondi has employed to ensure a smooth flow of nuts from farmers across the nation and lower the risk of produce loss is hiring locals.

“We have teams of field officers who report to a regional officer who then moves around with the truck collecting produce bought by the field officers and the software permits him to buy up to a certain limit,” he says.

He claims that he has discovered in the process of raising money that “you can have as many documents and good ideas, but your relationship with your fundraisers, whether in equity, partners, or debt, matters [because] they buy you.”

He was fortunate that his partner was a friend who required less persuasion. The nuts industry has also been successful in luring partners thanks to its established track record.

“We’ve been fortunate to get assistance from development partners such as NORAD, the European Union and USAID,” he says.

Bringing in development partners has aided in farmer training, ensuring top-notch quality, and putting the company on a solid growth path, as their goal extends beyond profits.

Overcoming Obstacles

Mr Omondi, who lives in rural Kilifi, says the biggest challenge they faced when establishing the factory was a lack of electricity.

Another issue is that in this business, you must keep a lot of stock and buy two-thirds of it in the first half of the year.

Furthermore, with a turnaround time of 120 to 180 days, one ends up tying up a lot of cash, so the demand for working capital is extremely high because farmers are paid on the spot.

“We carry the burden from the farmer all the way to market and in times of market glut like early 2023, we tied a bit of our stock in the US,” he says.

Another challenge is finding the right people.

“The problem is that not all [jobseekers] are tooled and ready to plug and play so you have to train people on the job,” he says.

Markets for exports

With an in-house laboratory, it has helped ensure the quality of the products before they leave the factory for the US and European Union markets.

This is a lesson Mr Omondi learned the hard way after exporting Sh20.2 million ($150,000) in cashew nuts to the US in 2016 through his previous company Ten Senses Africa, only to be forced to return them for dumping due to the use of untreated water.

“We learned not to ship a product you don’t have confidence in and we had to invest in our quality systems and processes,” he says.

“Now one of our key strengths is quality control. This gives us a piece of mind and guarantees our customers too,” adds Boniface Nganga, the managing director and co-founder.

like a union

The serial entrepreneur claims that the investment bug first struck him while he was a student at Moi University, where he planned paid trips for his fellow students.

“Once you learn the principles of business, which are finding a niche and making money from it, plus the discipline of keeping money and paying back, you just keep going,” he says.

He advises that just like in marriage, every entrepreneur needs to get the right partner.

“In business, you’re also in HR (human resource) mode full time. Every time you spend with your team is a moment to understand them,” he adds.

Before getting into business, he advises one should learn all there is to know about the sector of interest.

“We have benefited by being under the wings of people who held our hands. Many people want to go straight without understanding the business. You have to put in school fees and the school fees here is spending time to learn,” says Mr Omondi, adding that one must also learn how to talk to people, “because in business, how you talk to your bank manager, suppliers and other stakeholders can mean failure or success.”

Expansion plans

Grow Fairly is looking at expanding its footprint to Ethiopia where they are doing macadamia trials.

“We have sent 80,000 seedlings to Uganda and have our eyes in Tanzania as well,” he says.

His years-long operation of a tourist camp in Taita Taveta County is what, if anything, taught him the most about being an entrepreneur.

His building was destroyed when the land lease agreement was terminated, resulting in significant financial losses.

“I learned one key lesson; don’t give what you don’t have, and never commit what you can’t control,” he says.