Enjoying long-term success in Africa’s emerging markets

In late 2006, entrepreneur David O’Halloran, along with three former colleagues, rejuvenated a business development consultancy called BusinessMinds by turning it into an incubator company that develops, finances and operates sustainable commercial ventures in Africa.

The idea behind the enterprise is to offer investors a socially responsible approach to doing business on the continent, while also making a profit.

“Historically, many investors in Africa have used a more short- term, exploitative business model, one which has existed since the days of colonialism,” O’Halloran says.

“Unfortunately, for some investors this remains the modus operandi even today. As in, they take what resources they can and then get out without giving much back to the local economies.”

However, O’Halloran says he believes people are starting to realize that such an approach is inherently unstable and increases risk. Not only that, he adds, but many countries in Africa have significant development challenges such as poverty and high rural unemployment.

He says BusinessMinds has shown that “by focusing on how you can maximize the benefit for local communities and the environment, businesses can help to address some of these challenges while also increasing returns for their shareholders”.

Since 2007, O’Halloran and his partners have established africaJUICE, a company that produces, processes and delivers juice and vegetable products in Ethiopia and has exported to Europe since 2009, and africaFISH, an aquaculture business in Uganda that has just finalized financing for a large-scale catfish and tilapia producer that will supply East African markets.

“Both companies are models of sustainability with community ownership, outgrower schemes, low environmental impact and efficient natural resource – like land, water and soil – usage,” says O’Halloran. “We spend a lot of time setting up the businesses, which minimizes problems down the line, and have a very commercial mindset.

“We align with Non Governmental Organizations (NGO)s, donors, and ensure our contract farmers get access to FairTrade markets and are up to speed with all the best practices to grow better crops.”

The model the company uses is not reliant on grants as, he says, the business has to be a viable, profitable venture.

“In Ethiopia, where we employ around 3,000 people, we are about to see our venture turn a profit. Currently we do around $300,000 a month but we expect this to grow by a factor of six long-term.”

After graduating as an engineer from University College Galway in 1992, O’Halloran worked around the world for several major energy companies, including Shell International, developing power and gas projects in emerging economies.

It was during this time that he began to develop his ideas on sustainable business practices.

“I started out in Holland, but I was soon sent to more challenging countries to work in, like Iran and Nigeria, and it was here that I first encountered real poverty, the type of which you don’t get in Ireland,” he recalls.

“There had to be a way to do business that was good for communities as well as the environment began to grow throughout this stage of my career, and it has taken me to where I am today.”

He travels between Africa and Europe every month to keep an eye on the operations of BusinessMinds.

He believes that for people (in the west), involved in agriculture, especially those who are seasoned professionals, there is huge potential to secure employment across the continent, where many countries are actively seeking experienced farmers to work the land.

He adds: “They might not get the same salary as at home, but they must remember the cost of living is so much less in African, so the real yardstick is how much they can save. I guess the main stumbling block for newcomers is can they handle the change in environment.”

O’Halloran believes similar opportunities exist in Africa for entrepreneurs were involved in the construction industry, whether they are tradespeople or project managers.

Source: The Irish Times