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23/03/2016 News

or: “How to overcome tough challenges that impede your business of getting started” 
 

To accomplish the required basic structure of our potato & vegetable seed company, we invested a lot in the acquisition of nucleus farms in the main vegetable growing areas of Ethiopia since 2007, as well as in the import of advanced mechanization technology and the registration of improved varieties.

 

In 2009 we got our first highland farm at Wenchi (Woliso) where potato seed can be propagated during the spring season. To perform the subsequent propagation step in autumn season, we had to include a frost-free farm at lower altitudes. After a tedious process of acquiring land in Arsi, we gained a 100 hectare farm in Doba (Bekoji), directly rented from farmers. According to all involved stakeholders - including our agronomist who was born and bred near this site - the new farm was affirmed to be ‘frost-free’. Regretfully, at the very first cropping season in December 2011 all 25 hectares with freshly emerged potato plants got destroyed by frost….

 

To safeguard the continued development of our young seed-propagation business, we had to put all efforts in the acquisition of a real frost-free farm before autumn 2012. Therefore we applied for new land at six different midland-locations all over Ethiopia, to maximize the chance to get at least one farm available within the extremely short time of nine months.

The result of this approach was beyond our expectations, as Solagrow got positive responses regarding four locations in November 2012: Koga (Amhara), Mahoney (Tigray), Hosanna (SNPPR) and Welkite (SNPPR). We greatly appreciate the understanding and strong support of the involved Ethiopian administration officials at Federal and Regional level, as their vast commitment largely contributed to making these midland farms available and to offer us the chance to invest in their regions!

 

The only problem we could not solve is the delayed commencement of those new farms, as the official procedures of land registration were only completed in January-April 2013. This postponement in getting operations started at those midlands - long after the crucial autumn season - caused severe challenges to the management of the company. The foreseen continuous midland production of our potato and vegetable crops was interrupted for more than one year and also the required seasonal seed propagation cycle was blocked. This holdup of the planned production during 2011-2012 caused huge restrictions with respect to the projected turn-over and thus to the foreseen break-even-point and consecutive profitability of our business.

 

Also the company investment budget had to be revised, as the simultaneous release of four new farms demanded elegant solutions on how to redistribute the available capital to get a balanced implementation of those additional farms into the existing operations. These tiresome problems regretfully occupied most of the time of the management team and throughout this phase it hampered the normal communication and co-operation with our partners and customers.

 

During February-April 2013 the management of Solagrow PLC revised the strategy and budgets for the near future, focusing at the rapid accomplishment of the year-round seed production & sales of our registered varieties, followed by the steady development of the model farms in each region. At those nucleus farms we are aiming to get farmers and outgrowers involved in quality production for local and international markets. Also the internal company management was strengthened to ensure the adequate follow-up of all executive and commercial activities.

 

After having concluded this cumbersome episode, we are convinced that starting from coming June our company yet again will be able to address and accomplish all its tasks and duties as could be expected from an engaged and well-organized Dutch-Ethiopian seed company: supporting farmers to grow their profits, by making use of our quality seeds, mechanization, cropping expertise and market links.

 



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