After Championing Many Businesses, This Entrepreneur Is Giving a Facelift To Cashew Production In Tanzania

By  |  February 7, 2019

Before Fahad Awadh returned to his roots, he was something of a perennial journeyman and serial businessman. He had his fingers in many different pies at once and was torn between many different ventures. But once he found his way back to Tanzania, he knew had found the one, and it was only a matter of time before he hit paydirt.

Growing up, he attended St. Christopher’s; a British private school in Bahrain. His family lived there for eight years, and when it was time to pack their bags, they headed for Canada. Fahad was ten when his family relocated to the west, and by the time he turned eleven, he had been accepted into an International Business and Technology program.

From such a young age, he began to learn about Accounting, Business Marketing, and Entrepreneurial studies and that foundational experience may have helped him imbibe an entrepreneurial spirit. And as a testament to that, he had created a business with a product by the time he was twelve.

He continued on the same path when he went to college to study Business Marketing. At York University, he started a T-shirt business called Malyka Clothing with two friends; Lavado Stubbs and Momarr Taal.

 

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The clothing line became Popular in Toronto for its positive, powerful messages and before long, they were distributing to various parts of Canada, The Bahamas, and The Gambia.

 

 

As business was going great, Fahad soon found himself travelling to Bangladesh to secure a manufacturing contract that would see their pieces produced from the cut and sew stage. This afforded more creative control and further boosted the expansion of the clothing line.

Through those years, the entrepreneur had one eye on his home country. Although he had lived the majority of his adult life in Canada, he longed for Tanzania, and it was his desire to one day invest in his country of origin and set up a thriving business.

Things began to come to a head in 2012 when he paid a visit to Tanzania. He was on an unspoken expedition to explore opportunities in processing and value-addition. After testing the waters with his initial visit, he intensified his efforts in 2014, and that was when he began to see a clearer picture.

 

Like many African countries, Tanzania is resource-rich, and the problem lies in value-addition. Cashews are a major export crop for Tanzania and a significant source of income for many small farmers.

 

The country is up there with the largest producers of some of the best quality cashews in the world, but a significant chunk of the produce is exported raw to countries like Vietnam and India who process them and re-export them to developed markets at very good profits.

The lack of value-addition in the form of processing and poor capacity-building in the industry collectively robs off the country revenue while also eliminating the possibility of creating even more jobs.

These facts and more were laid bare before Fahad on his many trips around rural Tanzania and by the time he was done with the reconnaissance, he had built for himself a good knowledge of the country’s cashew production sector. To him, everything pointed to one thing; there was a real need for processing and value addition in the industry.

After concluding his industry research back home with visits to cashew farmers and regulatory authorities to understand the domestic market supply and global trade, he shifted base to Vietnam for a while.

While in Vietnam, he had the opportunity to learn at the stables of one of the world’s largest exporters of cashew. There he met with manufacturers of processing equipment and visited the factory of a big name in the industry. And that gave him further insight as per the needs of the venture on a global scale.

Fahad Awadh has a reputation for being a meticulous business planner, so when he whipped up a comprehensive business plan and began applying for loans from banks to help fund the procurement of the processing equipment, it stunned him that “no” became the default response at every turn.

A few more “nos” later and he began to lose confidence in the plan. He decided to improve the idea. It occurred to him that the banks may have been insipid about the whole thing because he didn’t have specific customers for his products. So, he went about finding customers for a product he didn’t yet have.

 

Fahad started cold-emailing companies that import cashew, introducing himself and making known his proposal.

 

“I wanted to get their interest – to know if they would buy from me if I set up the cashew processing facility. I felt that if we could get the interest of a company, the banks would be convinced and they will take us seriously,” he says.

A few positive responses came, along with many other negative ones and there were a dozen others that were never heard from. But in the end, that wild plunge into the sea somehow caught a big one.

He got the attention of a big company that has been in the cashew business for years, and once terms had been discussed, Fahad got the company to offer him a letter stating their intention to do business with him. The entrepreneur had built a good rapport with the company, and they duly obliged him.

He thought that was going to give the all-clear on the loan move, but he still couldn’t get the breakthrough. The banks wouldn’t budge. Time was flying fast, and he knew he wouldn’t have the understanding with the company for long, so he had to find another way.

 

 

And ‘another way’ meant partnering with his father; a retired pilot. By the time they pulled their resources together, he was able to purchase the initial equipment to set up his company, YYTZ Agro-Processing, on the island of Zanzibar. It wasn’t much, but he hoped to get the banks on his side once they saw the factory up and ready to roll.

Well, that didn’t quite happen, but it didn’t matter in the end. In the midst of the struggle, he registered the company in 2015, and a little over a year later, YYTZ won a grant worth USD 500 K from the Africa Enterprise Challenge Fund which came as a major boost.

“The funding gave us credibility. Now the same banks that were not interested when I had nothing but my idea are asking, ‘How can we come and see you?’,” says Fahad. “It just goes to show the kind of challenges we face as young entrepreneurs.”

YYTZ Agro-Processing thoroughly kicked off operations in its Zanzibar facility in 2017. The processing involves shelling and steaming of the cashew kernels. The company is focused on exporting high-quality nuts from Tanzania while working closely with local farmers to ensure they are not left out of the value chain.

The cashew processing company is adding value locally while also creating jobs and boosting the income of farmers and the community as a whole. Its flagship processing facility in Zanzibar is furnished with an installed capacity of 2,500 tonnes per annum.

Work is also known to have begun on another facility in Mtwara (southern Tanzania) which when completed will grant farmers access to storage facilities, an automatic shelling machine, and steaming equipment. This way, the company will purchase the product from the farmers at even better prices – a win-win as YYTZ will no longer have to incur processing costs.

It certainly seems like a tough nut to crack, but Fahad Awadh looks like a man with a hammer and a boatload of motivation.

 

Featured Image Courtesy: YYTZAgro

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