A small business selling farmers’ surplus crops grows into a major fertilizer distributor.
Sikadza Kokha Lda is a hub agrodealer in Mozambique’s Tete province owned by Mr. Jonas Jacob Lazaro, a 35-year-old father of five.
“I come from a poor family of farmers and I was forced to quit my studies at grade 5 because my parents could no longer afford to pay for my school,” says Mr. Lazaro.
“I started selling packets of cigarettes in 1998. I was 16 years old and I had only $0.75.”
In 2000, he rented a small space at the Vila Ulóngué Municipal market and expanded his cigarette business to include basic goods, such as soap, rice, maize flour and cooking oil. After a few years, remembering how his parents had struggled to sell their produce because there were no buyers in the villages, he started selling farmers’ surplus crops, such as maize and beans.
“Farmers had to walk long distances to sell their produce at very cheap prices. So I rented a small warehouse and started buying directly from farmers, storing the surplus to sell to traders,” says Mr. Lazaro.
He became increasingly interested in the input business, so in 2008, he attended two training courses Agribusiness Management Skills and Inputs Knowledge and Handling Skills, facilitated by the USAID-funded Agricultural Input Markets Strengthening (AIMS) Project.
“I still had no idea about the market and how to start, but in 2011 after a number of visits to Malawi for my basic goods and output business I decided to get registration and I opened my first retail shop at the Vila Ulóngué market. I named it Sikadza Kokha, meaning “nothing comes on its own” in the Chichewa language.
“I spent around $4,400 for the construction of the retail shop and acquisition of seeds, pesticides and implements,” he says.
Mr. Lazaro had to travel long distances to Malawi, Tete or Chimoio to acquire the products for his shop. He bought small quantities so the margins were small because of the transport costs.
“I almost gave-up, but felt guilty because people were demanding the products,” he says.
In September 2014 AFAP supported Mr. Lazaro with funds to build a fertilizer warehouse with a 1,000-ton capacity. AFAP’s field consultant, Mr. Jossias Matusso, then spent two weeks with Mr. Lazaro visiting villages, contacting farmers’ associations, agricultural departments, NGOs and other entities.
“In the third week, Mr. Matusso showed me a draft business plan and asked if I was really interested in becoming an input distributor for the Angonia plateau,” says Mr. Lazaro. “I first did not believe that he was serious, but my answer was yes.”
AFAP suggested that Mr. Lazaro build a big enough warehouse so he would no longer have to travel long distances for small quantities of inputs. The warehouse was completed in 2015. AFAP linked him up with the Mozambique Fertilizer Company (Mozfert) and he started receiving fertilizers on revolving credit consignments.
“I received the first lot of 90 tons of fertilizers and within a week my warehouse was empty. I paid back Mozfert and got a second lot of 120 tons. In three weeks the warehouse was again empty. I used funds from my other business and acquired more fertilizers. In a year I sold a total of 1,650 tons of fertilizers. I also started receiving fertilizers from other suppliers. Since some fertilizer products could not be mixed in the same lots I decided to invest in another small warehouse just to store urea,” says Mr. Lazaro.
In 2016 he decided to invest in another fertilizer warehouse and retail shop in Ntengo wa Mbalame village in Tsangano district. The warehouse has capacity to store 800 tons of fertilizers.
“I could not believe how fast the fertilizer and other inputs business was growing.”
AFAP linked him up with seed suppliers and he started distributing seeds. Together with AFAP and his seed and fertilizer suppliers he established around 150 demonstration plots in the villages to expose farmers to the benefits of using enhancing productivity inputs.
His shop at Vila Ulónguè became too small for the demand, so he invested in another shop. He also opened a retail shop and built a warehouse in Tsangano Sede village.
“Last year I sold 1,650 tons of fertilizers with just one warehouse. My target for this year is 4,000 tons. I cannot quantify how valuable AFAP’s support has been.”
