In the second part of our Barriers-To-Entry series, Business Forward sat down with CEO and co-founder of Plantform – a food, feed, and material-processing company – Hussein Abu Bakr, as he takes an in-depth look into the entrepreneurial opportunities and challenges in agribusiness while discussing the fine details behind the idea of Plantform and his projections for it.
To begin, can you tell us about Plantform and how it operates?
Plantform grew out of a family-owned business focused on agriculture and agro processing. I created the platform 10 years ago [and] it has been operating for three years now. It was connected to the family business but it has become a division of its own. What we do is bring in the seeds, do contract farming with the farmers who own up to three, five or seven acres dispersed along the Nile Valley and the Delta region, and provide technical support to them.
In terms of production, we do three types of processes; we dehydrate the vegetables, and then cut and size them for our customers in the United States (US). The consumers can always incorporate them so that they could blend them with other final products like for example, soup mixes and power bars. We also pickle vegetables, ferment them and put them in jars. We also provide canned vegetables; we put in produce like olives, roasted red peppers, and artichokes in cans for immediate consumption.
We export 100% of our products. The US represents about 90% of our sales; the other 10% is going to Canada, [the] Gulf area, and the Asian market.
What is the difference between agriculture and agribusiness?
Agriculture is the end fresh produce, whether it is vegetable, grain, or fruit. Meanwhile, agro processing is an additional stage in the value chain, where you add value by either packaging, processing, or changing the form of the product into another form. It can be later involved in various purposes within [the] food industry.
What do you think makes you stand out in the Egyptian market and international markets?
In Egypt, we are the only ones doing agro-processed products. there is no single company that does contract farming, processing, and exporting. You could find some companies only doing either one of the processes.
Also, the types of products that we grow are kind of unique – because we import the seeds that are not known to the Egyptian farmers and the Egyptian market. For example, we introduced jalapenos and roasted peppers to the Egyptian market.
In the US, we are capitalizing on us being in Egypt, where the weather is perfect for growing high-quality seeds at relatively low cost. This allows us to introduce the right seeds which are highly demanded in the markets we export to, most predominantly the U.S.
How do you cope with the current economic environment?
It’s a tough environment for everyone. The micro and the macro economic indicators are not at their finest; people are losing their jobs; growth is slow; and it is not easy to bring in credit from banks and from lenders; however, we are trying to stay focused and maintain an annual growth rate of 40-50% meanwhile, building a strong team step by step.
Overall, we’re trying to be prudent with our costs.
We were working on establishing four factories but decided to consolidate all operations into one instead to rein on costs. We were facing three main cost drainage points. The first was rent. Second were transportation and shipping, which were increasingly becoming a burden due to rising gasoline prices. Finally, the cost of talent. Our decision to consolidate into one factory, taken about three months ago, created huge cost advantage for us.
How do you plan to incorporate disruptive technologies in your operations?
In our case, we are working on launching an online platform where the 300-400 farmers we are working with would get connected together and to our export markets.
This platform will be will be very beneficial to our US buyers as well; it would provide traceability for the entire supply chain. For example, the customers can look up a broad range of information like. how was the product grown? Which seed was used? What additives were added to the produce? Where is the product? Is it in the warehouse or in the port? etc
What does the future hold for Plantform?
Currently, we are focusing on economies of scale in regards to how to increase our production – per farmer and per labourer, and how to sell more to our US clients.
Generally speaking, our goal for the upcoming six months is to maintain sales growth at 47-50 percent year-on-year, and to foster a strong teamwork culture.
What advice would you give to young entrepreneurs willing to tap into agribusiness?
I spent 14 years in our family business studying, learning, doing errors, spending money and losing it. I’m a risk taker. But the risk I took was calculated. Unlike most entrepreneurs who just do their start-ups right after they graduate from university, I did the opposite. During my time in my family business as an employee, I made the connections, worked on preparing the business model for my company for years, and then launched this company. I highly advise young entrepreneurs to study the risk well before going for it, be different, and to cultivate good connections.