Nnaemeka grew up in an agricultural family and developed a passion for engaging the rural population about agriculture and helping farmers understand agriculture as a business. He founded Smallholders Foundation, an organization that uses radio to deliver daily agricultural, environmental, markets, and social development programs to smallholder farmers in their local language. The foundation later created The Smallholders Farmers Rural Radio Station (FARM 98.0 FM) Nigeria’s first and only rural radio solely dedicated to agriculture.
With at least 45 percent of postharvest loss, the challenge of preserving produce contributes to the absence of food security in Nigeria. It is in this space, a young entrepreneur, Nnaemeka Ikegwuonu, sought to provide solution.
Ikegwuonu’s start-up, ColdHubs is helping farmers and market vendors become more profitable by eliminating food waste through solar-powered walk-in cold rooms.
Registered in 2015, Coldhubs is producing cold rooms and selling the space to smallholder farmers, retailers and wholesalers to store and preserve fresh fruits, vegetables and other perishable foods.
The energy efficient monoblock refrigeration unit is connected to an inverter that enables the solarpowered batteries to supply energy for night cooling. Each Coldhub can fit approximately three tonnes of perishable food, arranged in at least 150 units of 20kg plastic crates stacked on the floor.
It started as a small Holder’s Foundation in 2018 but after securing funding, from the MIT Solve initiative and the Microsoft Airband Grant Fund, he built a simple solution made up of 120mm thick insulating cold room panels to retain cold, with energy provided by solar panels mounted on the roof.
Coldhubs launched in December 2016 and became commercially operational on March 8 2017. It achieved fill up (selling out all its spaces) in August 2017. It has deployed about 35 Coldhubs in different parts of Nigeria to store produce and preserve fish.
A very interesting piece of Ikegwuonu’s entrepreneurship journey and which qualifies it for profile in Businessday leadership series is the lesson it offers in penetrating new markets.
When he set out, market women believe you it is inappropriate to put tomatoes in a fridge because it will spoil. This belief, even though lacking any scientific basis was widely accepted in rural areas where Ikegwuonu sought to launch his business. So how do you overcome this objection and get the people to buy into your message? How do you convince rural folks, many without any formal education and steep in traditional practices to abandon false notions?
Penetrating new markets
Ikegwuonu’s strategy was to first earn their trust. So, he didn’t go into building solar cold rooms right away but started educating the local people on how to improve their yield through modern farming methods.
He organised classes and visited many farms providing free extension services that ran the gamut of the crop planting process. He enlightened them about the benefits of improved seedlings, how to apply fertilizers and the best kind for the soil. He warned of the dangers of primitive practices including bush burning. He began a programme in a local radio station and even published a pamphlet in the local language filled with pictures that aided comprehension to explain better farming practices.
It took time and effort but it paid off. The farmers’ yield began to improve. An independent study found actual revenue grew by two-fold. But then there was a new problem. How do they store all these improved harvest in a sustainable way?
Naturally, they turned to the guy who helped them improve their yield in the first place. Since, he has convinced them his methods, while strange are effective, perhaps they could trust he knew what he was saying about putting tomatoes in a fridge!
Within months, Coldhubs cannot build enough cold rooms to meet the demand. Each Coldhub is filled with150 crates everyday across all the company’s operational sites and it has had to turn down orders.
“When we started this work, we received about two to three baskets of tomatoes every day while in some we received one basket, however today we have been able to achieve more,” Ikegwuonu said in an interview Businessday.
Coldhubs have also created new jobs for women by recruiting and training them to be hub operators mad market attendants in the markets and is also deploying 35 new cold rooms which will serve an estimated 3,500 farmers, wholesalers and fishermen.
Ikegwuonu says his vision is to scale the business as it looks to deplore more cold rooms. “We are building our own Coldhubs 100 percent,” he said
On the issue of technology transfer, the young entrepreneur said that too is happening in the Nigerian off-grid space but al lot still needs to be done.
“The research institutes in the West and Chinese manufacturers are inventing every day, so you will discover that your solar installer has a skill set that its best fit for the 1990s which can’t be applicable in 2019 and more so research institutes in Europe and Asia are turning out new products and research for 2025 and 2030 which we need to localize.
“Some of us are into the business of building and operating we cannot have that ability to transfer that skills. We hire that solar technicians every now and then and we find out that some of them don’t know what it’s going on so we need to pick training as a business just the same way Lagos business school strives on entrepreneur someone has to do same for Offgrid sector.
Good business practices
One important factor accounting for Ikegwuonu’s success is the ability to convince investors of your solutions and building corporate governance practices early on in the business.
“One cold hub cost $27,000 to build which include cost of power infrastructure, solar panels, battery, inverters, shipping, clearing from custom and bringing from Onne seaport which will move to our warehouse and many more.
“However, if you are able to fill that cold room up from day one you can generate that income within 12 months but considering the fluctuations in currency and foreign exchange, with one Coldhubs you can breakeven in 24 months (two years) that’s is giving room for foreign exchange challenges and so on,” Ikegwuonu said.
As it is true for many entrepreneurs, Ikegwuonu, though with a degree in history and international studies, operates in the agricultural sector. H parents were farmers so he grew up in farms and this was where the interest in agriculture came from. Yet he resisted every attempt to formally study it in the University.
“Everything was done at the family level to push me to study agriculture, I resisted because my parents wanted me to study Agric Economics or Agric Engineering. I resisted because I felt as a young man then that there is the notion of farming not being attractive hence associated with poverty.”
“So, I decided to go into the arts to study history in Imo state university although, I wanted to go into Journalism in University of Nigeria but I didn’t make the cut. What I have learnt is, yes you can change your course or academic pursue but you can’t change who you are because the desire and interest will always come out.”
As it is true for every business in Nigeria, challenges abound. His biggest challenges come from the regulatory authorities.
“We have a 40 feet container filled with batteries in Onne port and part of our challenges is that we pay 20 percent duty on those batteries; we also pay duty on imported solar and imported inverter.
“The point is the regulatory environment does not encourage small and medium scale enterprise in any way, because you are going to pay a huge sum of money to clear goods which you could have use to support the deficient power sector in Nigeria or support National development, because it’s actually power that drives the economy or key to industrialization.
“Unlike everywhere else in the world were its always friendly, regulatory environment seems harsh in Nigeria and when I talk about regulation, I am not talking about Nigerian Electricity Regulatory Commission (NERC) or the Ministry of Power, I am taking about these little agencies that we interface with every day in the course of doing business.
“For example, from Kano to Owerri there are more than 30 checkpoints from touts, community youths, police, civil defense among others waiting to harass businessmen. So, it’s like everybody is against a businessman. Frankly speaking it’s very difficult to do business in Nigeria and the government can do better by easing the ease of doing business by making policies and program friendly.
Ikegwuonu said the second phase of the compnay’s development is food logistics, which involves bringing food in a safe and hygienic model from the north to the southern part of Nigeria and also takes apples and grapes imported from South Africa from the southern part of Nigeria up to the northern part of Nigeria.
Nnaemeka is one of Nigeria’s most prominent young agriculturists. He is an Ashoka Fellow 2008, Laureate of the Rolex Awards for Enterprise 2010, Laureate WISE Awards 2010, Future Awards Nigeria’s Young Person of the Year, 2011, Fast Company USA 100 Most Creative in Business 2012, Laureate of the Niigata International Food Prize, Japan 2012 and 2013 Laureate of the prestigious Yara Prize for Green Revolution in Africa (now Africa Food Prize) among other international and local recognitions.
Source: legatum.mit.edu / businessday.ng