MEETING THE DEMAND FOR QUALITY GRAIN & CEREALS
AgroWays (U) Ltd is a well-known grain and cereal handling enterprise with two bulking centres in Jinja City, eastern Uganda and the other bulking centre in Mbarara City, western Uganda. The company buys, processes, stores and sells a range of grains and cereals including maize, sorghum, barley, soy bean and beans. It also manufacturers maize grit for use as a brewing adjunct. The company has also expanded its portfolio to include cassava starch. The company traces its history from a humble beginning 25 years ago in a rented store downtown behind a motor garage where it handled only maize and had a capacity to aggregate 20 mt per harvest season. To-date it has a capacity to process and aggregate 60,000 mt annually of grain and cereals and is currently upgrading its facilities to hundle 80,000 mt annually in a country with two harvest seasons per year. AgroWays was the first to be licensed as a public grain warehouse in Uganda under Warehouse Receipt System Act (2006) and is still leading in offering this service. But, according to Herbert Kyeyamwa, the Managing Director, AgroWays is known more for its unique role of connecting two worlds: One, of modern food and beverage companies with extremely high standards for quality and food safety and with urban customers demanding the lowest possible prices; the other, of extremely fragmented and poor farmers cut off from these markets by poor infrastructure, inefficiency and bad quality. For the modern food and beverage companies, the challenge of organising and upgrading the supply chain at a cost that makes business sense seems formidable. On the other hand, poor farm households, trapped in poverty and daily survival, cannot even begin to think about how to meet demanding market requirements for such customers. He acknowledges that it is an enormous task bridging the gap between these two worlds in a way that is commercially viable for modern food and beverage companies while also providing these small-scale food suppliers with a rewarding pathway out of poverty and hunger.
Nile Breweries is AgroWays leading customer. Other customers include Brarudi of Burundi and WFP. In 2008, AgroWays partnered with Nile Breweries a leading beverage (beer) company owned by the world’s largest brewer, ab-InBev, to organize the value chain for maize growers. Maize grit from locally produced maize became an important import substitute for imported corn starch saving the brewery 30 percent in exercise duty and contributing to its pretax margins. AgroWays has invested in state-of-the-art technology and is providing maize grit with consistent quality and at affordable prices. Based on the long-term relationship, reputation and track record accumulated since 2008 and a shared vision to build efficient value chains, Nile Breweries has also entrusted AgroWays to handle sorghum, barley as well as cassava adjuncts. So, what has enabled AgroWays to be a reliable partner to NBL for over a decade in a game and market that others have tried and fallen by the way side?
SucCesS on the back of hard work
Herbert alludes the company’s success to the culture of excellence and the strive to always exceed customer expectations in terms of quality, price and on-time delivery which factors he is particularly passionate about. Herbert stresses that “as a manager you don’t have all answers and you can’t solve all problems. Therefore, you need a strong team that you believe in and show them that you believe in them.” The company has a very able and empowered team, well qualified and motivated to drive the processes all the way from field agronomists, a fully-fledged quality department, a production segment headed by a seasoned production manager and an efficient finance department to facilitate the operations. The company underpins the culture of excellence in people throughout the organisation. This has enabled us meet the demand by our customers for quality grains and cereals all year round without interruption.
Food safety and operational excellence
The other score is on food safety and operational excellence. The company’s Quality Assurance Supervisor and Food Safety Team Leader Bridget Asumpta Nabwire says the company’s food safety excellence journey started even before the company received the ISO 9001:2015. The ISO certification added confidence to our customers that Good Manufacturing Practices (GMP) are followed in all our processes.
Bridget declares that the company has achieved great progress in terms of plant hygiene, personnel safety, and operational excellence and that the company is on the way to updating to FSSC 22000 since all requisite documentation and procedures are in place. Bridget is full of praise for the top management for setting the pace and tone of excellence in the company. “The management has placed the right priority on food safety and quality excellence by providing the requisite resources, time and training which has enabled everyone in the company to place food safety and quality on top of their agenda.” “Our food quality lab is top of the range and able to guide our operations” she adds.
Broad farmer network
AgroWays ability to please and retain customers is grounded on a supply-chain advantage provided by a robust network of committed loyal farmers. Richard Ibengo the Business Development Manager explains that “the company prefers to work
with
farmer groups because it makes it easy to impart a culture of quality.” Currently, 142 farmer groups each with an average membership of 74 smallholder farmers market their maize through AgroWays, and
7354 farmers sell their sorghum through AgroWays while 7,646 barley producers sell their crop through AgroWays” He proudly informs our team that “many of the farmer groups have been with the company for a long time supplying largely organically grown and purely non-GMO crop to the delight of our customers.” The long-term farmer relationships, transparency and mutual trust positions AgroWays as the preferred choice by farmers in marketing their crop in the Eastern region of the country. Richard however, adds that “inculcating a quality culture throughout the supply chain especially at farm level is still a challenge and that is why AgroWays relevancy in bridging the gap of a “missing middle” is still relevant today as it was when the company first partnered with NBL in 2008.”
Farmer/Community involvement
The company is very proud of its attachment to farming communities where it has constructed Village Aggregation Centres (VACs) – run and managed by the communities in the respective districts. Grain is aggregated at these centres and transported to the main Bulking Centre. So far 5 VACs are operational deep in rural areas of the districts of Mayuge, Kaliro, Namutumba, Buyende and Kamuli. The farmers in these areas are trained, and also supported with inputs and maize shellers to minimize post-harvest handling, improve the quality of maize and be able to participate in the value chain. Similar arrangement is working well for barley but the buying centres are managed by AgroWays’ staff. This sourcing model permits a reasonable degree of traceability for grains and cereals from rural, low infrastructure environments all the way to our customers.
The company, relying on long-term offtake Agreement with NBL established and operates an innovative value chain financing model which since its launch eight years ago has scored success beyond expectation. Joseph Watambula a barley and sorghum aggregator in northern Uganda testified “I find AgroWays most helpful in solving problems related to financing our grain purchases. The revolving fund operated by AgroWays ensures we have sufficient liquidity to compete in the field and secure enough volumes of quality sorghum and barley. This has not only stabilized our businesses but we are also in a position to upgrade our own grain handling facilities. AgroWays remains our preferred partner”.
The beaming face of Afuwa Mutyaba a mother of six and a small holder maize farmer in Namutumba district Eastern Uganda also has a success story to tell. “From the bottom of my heart I am grateful to AgroWays for the market outlet for my maize over the last ten years and support in form of a maize sheller. I have managed to build a modest house for my family and I can afford school fees and all the scholastic materials for my children. I no longer feel that pain of seeing
my school-going children sent away from school because of unpaid school fees. This has also increased the interest of my children in school because they no longer feel left out”.
Continuous Improvement
Abbot Ogwang the company’s Accounting Manager, says “it is important to predict and quickly adopt to customer demands and consumer trends. Our customers are continuously seeking high quality and lowcost raw material from us to enable their products compete favourably”. He adds that AgroWays’ philosophy is not to “kill” the farmer in order to please the Customer but that it is possible to remove inefficiencies in the value-chain and score a win-win to all parties. AgroWays works closely with its customers to continuously improve the efficiency of the value chain.
Abbot revealed that to further remove inefficiencies in the value chain, AgroWays is investing about US $8 million this year in expansion plans. “We have an ambitious growth trajectory to unlock the full potential throughout the value chain. Uganda Development Bank (UDB) as a financing partner has come in handy. The investment will allow the company to expand its processing and storage facilities, launch new products and further develop its sales across the wider East African Region”. He added “our market is concentrated in Uganda but we have plans to go wider and further. Continuous upgrade and improvement of our processes is needed to position ourselves within this dynamic of the industry.”
Herbert applauds NBL and our other steady customers. He points out that over 90 percent of grain trade in Uganda is informal and besieged with quality issues, unpredictable supply and price volatility. Policy options to deal with these uncertainties as is the case for coffee are a long way for grains and cereals. However, they are brought under control through long-term business relationships. AgroWays has a proven record as a reliable partner. “We say to our partners that we are prepared to walk and grow long-term relationships for a number of years. We want to continue crafting cost efficient strategies together to achieve a win-win situation for all actors in the value chain.”
Nile Breweries has been operational in the food and beverage industry for almost 70 years. The company works every day to offer great quality products to its customers and has two production facilities employing a total of 650 members of staff. The Mbarara brewery is consistently recognised as among the best in Africa and is highly regarded internationally. From facilities such as these, Nile Breweries products are also exported into the Democratic Republic of Congo and South Sudan, adding to the overall Ugandan economy.
Through the decades, the company has also played an important role in contributing to the livelihoods and progress of Uganda and its people, as Valencia explains.
“Our contribution to our ABInBev business in Africa is considerable and we are very proud of this,” he elaborates. “As part of ABInBev we work on several initiatives to positively impact communities where we operate. Examples of these include the deployment of the ‘No Excuse Campaign’ which sought to create awareness and mobilise against gender-based violence.
The company has worked hard to advocate responsible drinking because we believe that beer is a social catalyst and every experience with beer should be a positive one. These initiatives have led Ugandans to recognise Nile Special as the most admired brand in the country.
“We have moved forward in our Global Smart Drinking Goals which contributes to the WHO target of reducing the harmful use of alcohol. We have supported the government efforts of revenue collection and reducing illicit alcohol yet lots of work still needs to be done on this front. We have continued to develop our value chain to support Ugandan farmers and we continue to evolve our programmes. For example, we have recently deployed a crop insurance pilot.”