Together with our local partner, we run our own ingrower® project in Mozambique. At the site in Moamba, 30 entrepreneurs produce vegetables and chickens. The business has own slaughter house and market branded chickens to customers in Maputo. The business has reached financial sustainability and the best performing entrepreneurs have a yearly profit of USD 3,300. Entrepreneurs leave the ingrower after approx. 1½ year – to establish their own businesses outside the project.
The businesses are organized in units to fit for the production capability of one entrepreneur. The production of broiler chickens is in houses of 1,500 birds. Small chicks are bought and fed to 1.5 kg during a period of 35 days. Presently, 20 houses are available and additionally 4 smaller houses for training purposes. In total the production is around 215,000 chickens per year. Since late 2015, a slaughter house was implemented and has been in operations since early 2016. Vegetable production is mainly tomato, cucumber and green beans. Each entrepreneur cultivates an area of ½-3 hectares. The current facilities provide growing possibilities on some 20 hectares of land with basic machinery and hand tools.
Entrepreneurs progress through different stages towards being experienced agricultural producers with capital savings. When ending the education phase they can choose to develop and enlarge their business further inside the ingrower or establish themselves outside. In the case the entrepreneur decides to leave the ingrower she/he can continue to use some of the services from the ingrower on a reduced profit sharing scheme. In all cases the entrepreneur will benefit strongly from production knowledge, business experience and capital saved. As an average the entrepreneurs stay in ingrower Moamba for approx. 1½ year. While building up a viable business itself, the ingrower addresses the paradox that Mozambique, like other developing countries, has very limited agricultural production, despite the presence of fertile land, excess work force and attractive market for food products. Focus is on knowledge transfer, modern production methods, job creation, food supply to local markets and the creation of agricultural entrepreneurship.
By April 2016, the entrepreneurs in Moamba took care of 20 chicken houses with 1,500 chickens in each. Entrepreneurs have the individual responsibility for their production and get 50% of the gross profit. The most productive entrepreneurs have reached a yearly gross profit of USD 6,600 giving them a salary of about USD 3,300 per year. Considering alternative job possibilities (if any at all), participation as an entrepreneur represents a very attractive package as well as income. For comparison, the salary of a field worker in Mozambique is USD 1,500 per year. For the vegetable production the average gross profit per year per hectare has been approx. USD 7,235 giving about 3,625 to the entrepreneurs.
Based on investments during 2014 and further improvement of the business scheme, the ingrower scheme has proved its viability in Moamba. The results for each of the entrepreneurs have been very satisfactory. The Ingrower Moamba operates as a commercial business. In the budget of the Ingrower the share of profit given to the entrepreneurs is considered as a variable cost. The total turnover of the Ingrower Moamba was in 2015 in excess of USD 600,000 per year and reached financial break-even as well in 2015. In second half of 2015 a new slaughter facility was completed which has improved the financial results further since start of 2016.
The total production in 2015 in the 20 houses was about 215,000 chickens. As the production of each of the entrepreneurs is relatively small, it is an important component in the project to organize the production quality and the delivery times. The ingrower has the contacts to the clients and does the common agreements. The project supplies chickens and vegetables to the local market in Maputo, about one hour drive from the project site. The demand for quality food products is increasing rapidly in Mozambique. The improved economic situation and the establishment of a middle class market segment with higher purchasing power has led to improved prices and demand. Besides, there is a tendency to value products produced locally. The Ingrower Moamba will increase the use of storytelling and branding focusing on the fact that the products have been produced by small private entrepreneurs in Mozambique within an "ecosystem". This is being done under the brand name 'Machados'.