Afbeelding: Woman at work at rice husk machine at Nduta
Woman at work at rice husk machine (Nduta)

“The main challenge is dishonest aggregators”

Tanzanian entrepreneur Mr. Ernest Nduta, owner of Nduta Nyororo Investment, tells us about the challenges he faces as maize and rice processor and what the keys are to become a successful entrepreneur.

How is your rice and maize business doing at the moment?  
“My rice business is doing well. One of the benefits of this location (Geita) is that it’s close to the border of Uganda and Kenya, which makes it much easier for me to export my products. And the local markets (wholesalers and retailers) know how to find me and come to my store to purchase rice and maize. Due to the export ban for maize by the Tanzanian government, I don’t make profit on maize at the moment. However, the money I earn as agent for Tanzanian Brewery Limited – finding new clients and distributing beer- still exceeds the income I get out of trading and processing rice and maize.”

What are the main challenges for your company?
“ There are many challenges but the most important one is dishonest aggregators, who collect the raw materials for me. Sometimes they add sand or other rubbish to the bags of raw materials to make it heavier and thus earn more money. Or they keep the money I paid them in advance, without delivering any raw materials. In time, I lost around TZS 15 million (about €6000) due to dishonest aggregators. Another challenge are the unstable prices of staple foods (rice and maize). After a good harvest, prices tend to drop while during a poor harvest prices rise. Furthermore, we have to deal with the changing government (trade) policies, such as export bans on maize or rice. These price fluctuations have a negative impact on the business and demand a constant adjustment.”

What do you need to grow your business?
“First of all I need to increase my storage capacity here in Geita and also in Dar es Salaam. Currently I rent a Godown - commercial building to storage goods – but I want to build my own Godown in 2 years’ time. I also need enough working capital to buy more paddy at lower prices during the harvest season. Another step that would help me to expand my business is a full automatic rice processing machine, from grading and polishing to packaging, all in once. Not only will that increase the scale of my production but also reduce the costs of labour. I believe with finance of SME Impact Fund I can achieve this growth.”

What is the key to a successful business?
“An important factor for being successful in any field is to have targets and to keep focus. You should ask yourself the question: Will the thing I am doing now bring me closer to my target? If not, you should stop it and prioritise your activities again. It’s also smart to stay on top of your cash flow, monitoring the statements weekly or monthly to know how much is coming in and much is going out. I benefited a lot from the Fund’s Business Development Services, learning how to manage my business and cash flow more professional.  And I am not only on top of my cash flow but also on top of the marketing and other activities.”

Did you have business role models you could learn from?
“I worked for almost 20 years with Indians, who are really good businessmen in general. They were my entrepreneurial role models and a great source of inspiration. I learned a lot from them, just by observing. How do they solve problems? Which tools work in different situations? How to create new business? In a nutshell, I learned from them what works and what doesn’t work. I really took advantage of the opportunity to work with these role models for so many years.”  

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