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What real estate firms need to do for successful agribusiness projects

Our writer Milliam Murigi spoke to Goldenscape Greenhouses CEO, Peter Wangai

Milliam Murigi @millymur1

Goldenscape Greenhouses is one of the real estate firms that seem to be paying its partners who have invested in greenhouses. Why is your project successful?

Over the past three years, we have paid over Sh30 million to our investors. Our project has been successful because we have a ready market for agricultural products and we manage our greenhouses rather than sub-contracting them to a management company.

We have also started our grocery stores (in Hurlingham) where we are selling our groceries. We are planning to start a restaurant and a canning factory for value addition to minimise post harvest losses. More importantly, we ensure that all our investors are paid even if the greenhouses don’t perform as expected.

We have seen many real estate firms who have started agribusiness initiatives fail to pay their clients. What are they doing wrong?

They fail because they lack strategies. Most of these property dealers use agribusiness as a complement to sell their plots and farms. And since they don’t have an in-house team to manage their agribusiness, they end up sub-contracting.

This is the biggest mistake developers and land buying and selling firms are making. They should have a full house qualified management team rather than sub-contracting. Beware that grocery prices keep fluctuating, making the business unpredictable.

What is your advice to companies keen to venture into agribusiness?

First, put your long-term market in order and have a powerful management team. Some projects have failed because of short-term plans, but when you have a long-term market strategy, you will be assured of good sales.

Second have plans B, C and D for income streams. This is because not all contracts are a guarantee; if agribusiness doesn’t pay, you will have somewhere else to get money and pay your investors.

Your investors are not there to try their luck but they need returns and you need to pay them as per your agreement. If possible, create your market such as constructing stores and a value-addition factory, have your own transportation and invest in packaging technology.

Sanitary modes of transport and packaging will give your products that natural and eye-appealing look. On top of it all, have insurance cover for your plants and engage professionals to manage your project.

Do you think that insurance companies have exploited this sector fully?

No. Most companies fear to invest in the agribusiness sector, terming it a risky business, despite huge potential in agriculture. Insurance firms should partner with farmers for commercial purposes.

Are there untapped opportunities in this sector?

Kenyans need to embrace new farming technologies, value addition and growing of medicinal fruits and herbs. Currently, these medicinal fruits are a bit expensive and when value added they can be affordable in greater quantities.

Tell us about your company?

Goldenscape Greenhouses is a member of Goldenscape Group Limited and we deal in greenhouses. This is the first company to introduce the Lease a Greenhouse Concept where potential local or international investors buy a greenhouse from us on our land. We manage everything in five-year contracts, but pay them each season.

This approach not only gives the investors a peace of mind on the initial capital injection into the project, but also gives an investor an opportunity to invest in as many greenhouses as possible. Our greenhouses go for between Sh280,000 for a 8m by 15m and Sh320,000 for an 8m by 30m greenhouse.

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