emmanuelewumi:
An average Nigerian enterpreneur or business man wants fund in form of equity or debt for expansion, but still want to retain total control of the business.

It doesn't work that way

OgogoroFreak:
I really don't understand this learning curve thing. So if USA want to start producing rice, they need to start doing something called learning curve by eating rice filled with stones for some time?

For christ sake all the information are out there to produce rice. I think government is really not supporting. Most of these farmers can't afford the standard rice mill and they can't access affordable loan.

emmanuelewumi:
Is anyone following the brouhaha between Health Plus and a Private Equity Investor concerning the takeover of her company by the PE guys?

ultron12345:


There is no learning curve joor. Anyone who is serious will import the necessary expatriate management and specialized manpower from India at the beginning. Then they can transfer skills to local staff. Is farming rice more complicated than manufacturing cement that Nigerian companies are doing.

These small small farmers are not the one who will move agriculture forward in Nigeria. They can't take us anywhere. We need people and corporations who are ready to do agriculture on a large scale, who can afford the necessary mechanization and processing equipment and will farm land in thousands of hectares. Those small farmers will then be employed on these large farms and be paid salaries. Only the economies of scale alone will be able to bring down costs. Someone farming on 2000 hectares will produce at a lower cost per unit than someone farming on less than half hectare. Small farmer will buy bag of fertilizer at N5000 from middlemen because he's buying in small quantities. Big farmer will buy at N3000 direct from manufacturer because he's buying in hundreds of trailers. Such large farms will more productive as they will be able to afford the necessary seeds and fertilizers and best farm practices. This will solve the problem of small Nigerian farmers yielding 1 ton per hectare when their counterparts abroad are doing 8 tons per hectare.

All these tiny 2 plot farms cannot take us anywhere. These small farms lack economies of scale, are inefficient, poorly managed and unproductive. They are one of the reasons why food is expensive.

The way we look for people to invest billions in factories is the same way we need people to invest billions in farming. Or at best, cooperatives can be formed, where a group of small farmers or just ordinary investors can pull land and funds together to form a company underwhich they will be employees earning salaries monthly and then dividends at the end of the year. This cooperative will employ proper expatriate management who will manage the farm properly. If 5000 people pull N1Million each, that is N5B. Bank loan can be taken from bank of agriculture to make it up to N12-15B.

Imagine we didn't have big cement manufacturers. Imagine we had just thousands of small households who go to the mine, use chisel and shovel to dig up limestone and other minerals. Then use wheelbarrow to carry it home. Then start using iron block to manually grind the minerals. Then mix manually, heat with firewood, then grind again, the pour into those black polythene bags or into one big basin to take to the market to sell. Imagine how wasteful and inefficient this process is. Of course, the end product will be of a higher price and lower quality than that of huge, well-organized cement plants. This is the problem of agriculture today.

Tabuse2024:


I recently started reading about it. Quite revealing. Given your experience, how would you have suggested she went about sharing equity in order to prevent her current situation?

I have done a bit of reading too on some experiences of a few tech startup under pressure due to VC equity injected into their business. I am not sure i[b]f I am right, but I think I once read a blog post from Jason Njoku where he wrote that if given another chance, he would not take VC money and consider bootstrapping while reinvesting income for growth. [/b]

Your thoughts, emmanuelewumi?

RayRay06677:
Thanks for all the nice words, never knew this much, before I draw conclusions on issues I always ask "the intent" when that is solved then you will decide your fate. Am not here to proof that ray and Barry are same. I explained why I changed. Am sticking to TBills but thought I can risk 5m, I have e always been too careful, watching people cash out for over 2 years, thank God it's just 5m I put and did so in 3 different platform. Am expecting 30m by 24th of this month was contemplating risking it too hence my coming here to disturb your peace knowing that I will be discouraged. Even the bond I asked to kick start, rates are going south. I understand they are also running training, I intend using my first roi to register and trade on my own in future. But for now, let the 5m walk. I Don taya for conservation lifestyle.

N/B: am not promoting anything, got nothing to gain, only came for restrictions before I dump my 30m further. I took a bad risk, wouldn't blink if it fails.

RayRay06677:
Being learning a lot here, I personally decides to risk 5m last week on the ponzi. 2m for 50% quarterly, 2m for 15% monthly and 1m for 20%. 3 different forex trading firms in Uyo. I advise against it but I needed to take a risk, have been extra careful in my investment years and I think giving out that chunk is cool. Was even thinking of taking it to 30m but I will wait and see how my 5m crashes. (all 3 firms at once).

RayRay06677:
Being learning a lot here, I personally decides to risk 5m last week on the ponzi. 2m for 50% quarterly, 2m for 15% monthly and 1m for 20%. 3 different forex trading firms in Uyo. I advise against it but I needed to take a risk, have been extra careful in my investment years and I think giving out that chunk is cool. Was even thinking of taking it to 30m but I will wait and see how my 5m crashes. (all 3 firms at once).

ultron12345:


There is no learning curve joor. Anyone who is serious will import the necessary expatriate management and specialized manpower from India at the beginning. Then they can transfer skills to local staff. Is farming rice more complicated than manufacturing cement that Nigerian companies are doing.

These small small farmers are not the one who will move agriculture forward in Nigeria. They can't take us anywhere. We need people and corporations who are ready to do agriculture on a large scale, who can afford the necessary mechanization and processing equipment and will farm land in thousands of hectares. Those small farmers will then be employed on these large farms and be paid salaries. Only the economies of scale alone will be able to bring down costs. Someone farming on 2000 hectares will produce at a lower cost per unit than someone farming on less than half hectare. Small farmer will buy bag of fertilizer at N5000 from middlemen because he's buying in small quantities. Big farmer will buy at N3000 direct from manufacturer because he's buying in hundreds of trailers. Such large farms will more productive as they will be able to afford the necessary seeds and fertilizers and best farm practices. This will solve the problem of small Nigerian farmers yielding 1 ton per hectare when their counterparts abroad are doing 8 tons per hectare.

All these tiny 2 plot farms cannot take us anywhere. These small farms lack economies of scale, are inefficient, poorly managed and unproductive. They are one of the reasons why food is expensive.

The way we look for people to invest billions in factories is the same way we need people to invest billions in farming. Or at best, cooperatives can be formed, where a group of small farmers or just ordinary investors can pull land and funds together to form a company underwhich they will be employees earning salaries monthly and then dividends at the end of the year. This cooperative will employ proper expatriate management who will manage the farm properly. If 5000 people pull N1Million each, that is N5B. Bank loan can be taken from bank of agriculture to make it up to N12-15B. Invest all this in a single sizeable rice farm with a rice mill of good capacity, and a plant to convert the remaining bran into animal feed or bran oil. Or invest that into a single cattle or poultry farm and tell me whether your products will not be cheaper and of better quality. One can even start taking advantage of the weak currency and start exporting since such company will be able to produce to high quality standards required by developed countries. Not to expect illiterate 2 plots farmers to export yam to Europe that will be returned due to poor quality. Is it Fulani herdsmen that will export beef or milk? Can they process beef properly to EU standards? Can they pasteurize milk at ultra-high temperatures and package it aseptically?

Imagine we didn't have big cement manufacturers. Imagine we had just thousands of small households who go to the mine, use chisel and shovel to dig up limestone and other minerals. Then use wheelbarrow to carry it home. Then start using iron block to manually grind the minerals. Then mix manually, heat with firewood, then grind again, the pour into those black polythene bags or into one big basin to take to the market to sell. Imagine how wasteful and inefficient this process is. Of course, the end product will be of a higher price and lower quality than that of huge, well-organized cement plants. This is the problem of agriculture today.

emmanuelewumi:
Is anyone following the brouhaha between Health Plus and a Private Equity Investor concerning the takeover of her company by the PE guys?

emmaversity:

Hi!
am a newbie
Just wondering if you have achieved the bolded?
Thanks inanticipation of your reply?

emmaversity:

What are the 3 different forex trading firms?
Thanks in anticipation of your reply.


What are the 3 different forex trading firms?
Thanks in anticipation of your reply.

ultron12345:


There is no learning curve joor. Anyone who is serious will import the necessary expatriate management and specialized manpower from India at the beginning. Then they can transfer skills to local staff. Is farming rice more complicated than manufacturing cement that Nigerian companies are doing.

These small small farmers are not the one who will move agriculture forward in Nigeria. They can't take us anywhere. We need people and corporations who are ready to do agriculture on a large scale, who can afford the necessary mechanization and processing equipment and will farm land in thousands of hectares. Those small farmers will then be employed on these large farms and be paid salaries. Only the economies of scale alone will be able to bring down costs. Someone farming on 2000 hectares will produce at a lower cost per unit than someone farming on less than half hectare. Small farmer will buy bag of fertilizer at N5000 from middlemen because he's buying in small quantities. Big farmer will buy at N3000 direct from manufacturer because he's buying in hundreds of trailers. Such large farms will more productive as they will be able to afford the necessary seeds and fertilizers and best farm practices. This will solve the problem of small Nigerian farmers yielding 1 ton per hectare when their counterparts abroad are doing 8 tons per hectare.

All these tiny 2 plot farms cannot take us anywhere. These small farms lack economies of scale, are inefficient, poorly managed and unproductive. They are one of the reasons why food is expensive.

The way we look for people to invest billions in factories is the same way we need people to invest billions in farming. Or at best, cooperatives can be formed, where a group of small farmers or just ordinary investors can pull land and funds together to form a company underwhich they will be employees earning salaries monthly and then dividends at the end of the year. This cooperative will employ proper expatriate management who will manage the farm properly. If 5000 people pull N1Million each, that is N5B. Bank loan can be taken from bank of agriculture to make it up to N12-15B. Invest all this in a single sizeable rice farm with a rice mill of good capacity, and a plant to convert the remaining bran into animal feed or bran oil. Or invest that into a single cattle or poultry farm and tell me whether your products will not be cheaper and of better quality. One can even start taking advantage of the weak currency and start exporting since such company will be able to produce to high quality standards required by developed countries. Not to expect illiterate 2 plots farmers to export yam to Europe that will be returned due to poor quality. Is it Fulani herdsmen that will export beef or milk? Can they process beef properly to EU standards? Can they pasteurize milk at ultra-high temperatures and package it aseptically?

Imagine we didn't have big cement manufacturers. Imagine we had just thousands of small households who go to the mine, use chisel and shovel to dig up limestone and other minerals. Then use wheelbarrow to carry it home. Then start using iron block to manually grind the minerals. Then mix manually, heat with firewood, then grind again, the pour into those black polythene bags or into one big basin to take to the market to sell. Imagine how wasteful and inefficient this process is. Of course, the end product will be of a higher price and lower quality than that of huge, well-organized cement plants. This is the problem of agriculture today.

emmanuelewumi:
An average Nigerian enterpreneur or business man wants fund in form of equity or debt for expansion, but still want to retain total control of the business.

It doesn't work that way

Tabuse2024:


I recently started reading about it. Quite revealing. Given your experience, how would you have suggested she went about sharing equity in order to prevent her current situation?

I have done a bit of reading too on some experiences of a few tech startup under pressure due to VC equity injected into their business. I am not sure if I am right, but I think I once read a blog post from Jason Njoku where he wrote that if given another chance, he would not take VC money and consider bootstrapping while reinvesting income for growth.

Your thoughts, emmanuelewumi?

NL1960:


Austin Okere of Computer Warehouse Group (CWG) also said the same thing and told people to beware of PE and VC.

awesomeJ:


Brilliant, Ve..rry Brilliant!

From Sugar to Cement, to Refinery, Dangote is often particular about building some of the largest facilities. The results of this is obvious.

Maybe Rabiu will soon become another like Him.

The CBN should look at ways of incorporating large agric firms in partnership with the private sector.

Instead of just giving hundred of billions in intervention funds. I think now will be a good time to consider creating firms that they will fund and own. Such firms would then be compelled to do agric on a large scale.

I recently saw a video where cows were milked at about 20litres a day on a farm with over 1000 cattles. I can't really remember the figures exactly, but I remember I estimated that if we had such systems, a 157ml of evaporated milk should conveniently retail below N100 with much better quality, since it will be made from fresh milk.

We can't keep waiting for Dangote, and just throwing trillions in intervention funds doesn't seem sufficient anymore. CBN should incorporate, fund and co-own mammoth agricultural companies.

emmanuelewumi:



Do they have the patience and discipline for organic growth.


Late Prof Elebute sold part of his holdings in Lagoon Hospital to PE Investors and there is no issue.

Enterpreneurs and businemen should always consult professional advisers before getting into such deals.


If I may ask, how big is Health Plus that $10 million was paid for 52% ownership in the business started by the young lady about 20 years ago

donguutti:
On agriculture, we seem to be missing something, we have big organizations such as flourmills, dansugar invest in sugar cultivation, yet our sugar production has not increased by much.

Dangote tomatoes also has a similar story, even most of our agritech/crowdfunding platforms have not lead to any massive increases in crop yields with most pivoting to animal production

A learning curve based on cooperative farming is the best path to follow,

On Private equity and health plus, in the sister agri/crowdfunding thread, we see people dragging non performing coys and we support, should healthplus be allowed to collect $10 million and renege on agreed terms.

How come there are no complaints about private equity in real estate, finance, bike hailing etc,

Cyberknight:


The very thing I was wondering myself. $10 million is a shitload of money.

awesomeJ:


Brilliant, Ve..rry Brilliant!

From Sugar to Cement, to Refinery, Dangote is often particular about building some of the largest facilities. The results of this is obvious.

Maybe Rabiu will soon become another like Him.

The CBN should look at ways of incorporating large agric firms in partnership with the private sector.

Instead of just giving hundred of billions in intervention funds. I think now will be a good time to consider creating firms that they will fund and own. Such firms would then be compelled to do agric on a large scale.

I recently saw a video where cows were milked at about 20litres a day on a farm with over 1000 cattles. I can't really remember the figures exactly, but I remember I estimated that if we had such systems, a 157ml of evaporated milk should conveniently retail below N100 with much better quality, since it will be made from fresh milk.

We can't keep waiting for Dangote, and just throwing trillions in intervention funds doesn't seem sufficient anymore. CBN should incorporate, fund and co-own mammoth agricultural companies.

awesomeJ:


Brilliant, Ve..rry Brilliant!

From Sugar to Cement, to Refinery, Dangote is often particular about building some of the largest facilities. The results of this is obvious.

Maybe Rabiu will soon become another like Him.

The CBN should look at ways of incorporating large agric firms in partnership with the private sector.

Instead of just giving hundred of billions in intervention funds. I think now will be a good time to consider creating firms that they will fund and own. Such firms would then be compelled to do agric on a large scale.

I recently saw a video where cows were milked at about 20litres a day on a farm with over 1000 cattles. I can't really remember the figures exactly, but I remember I estimated that if we had such systems, a 157ml of evaporated milk should conveniently retail below N100 with much better quality, since it will be made from fresh milk.

We can't keep waiting for Dangote, and just throwing trillions in intervention funds doesn't seem sufficient anymore. CBN should incorporate, fund and co-own mammoth agricultural companies.

emmanuelewumi:



Do they have the patience and discipline for organic growth.


Late Prof Elebute sold part of his holdings in Lagoon Hospital to PE Investors and there is no issue.

Enterpreneurs and businemen should always consult professional advisers before getting into such deals.


If I may ask, how big is Health Plus that $10 million was paid for 52% ownership in the business started by the young lady about 20 years ago

ahiboilandgas:
10 m USD can setup 150 units AHIB Health wise Pharmacy across commerical points in Nigeria .....each store 30m max ...

ultron12345:





They do their dairy farming in the Saudi desert. They imported management from Ireland. Imported all their cows (modified breeds). They even had to put AC (air conditioning) in all the farm sheds for all the cattle to protect them from the harsh desert heat which can sometimes reach as high as 45C. Since they can't grow grass to feed the cattle, they bought land in Argentina and the US, grow the grass there then import them to Saudi Arabia to feed the cattle.

All this struggle and stress yet they are able to produce products that in terms of price are competitive in the international market, hence they also export to other countries. If it's Nigerians, they'll come up with 1000 reasons why it can never work and blame the government. Nigerians will be waiting for Dangote or indians/lebanese/chinese. If Dangote does it finally, they'll say it's monopoly. If it's Lebanese or Indian, theyll say it's money laundering.

Fonterra, a dairy cooperative owned by 10,500 farmers in New Zealand makes $12B in revenues exporting milk and other dairy products. That's 30% of the world's dairy exports, from tiny New Zealand.

Chiquita is doing $3B in revenue growing ordinary bananas in South America and selling in US. Dole does $4.5B doing same along with ordinary water melon and pineapple.

Ecuador, Philippines, Columbia, Costa Rica, Guatemala make $3.3B, $1.9, $1.6B, $1B and $1B annually from exporting ordinary banana. Ivory Coast and Cameroon get $340M and $250M from the same banana. Nigerians will be blaming government. Thank God banana is not an electricity intensive business. I wonder what excuse will be given for this. It's labour intensive and we have cheap labour, cheap land and a weak currency, yet we can't do anything.

All these are the kind of things we need in this country, this is what will grow our economy, not coding another ride-hailing app or biscuit ordering app.

Even if we want to do tech, we should go for IT outsourcing like India, not to be coding apps that our people are too poor to use. Where we can use our massive university educated and cheap labour resources to provide labour intensive IT services to companies in the developed world. Instead of them playing Americans $60,000 per annum, they'll outsource to Nigerian companies at quarter that price. This is what TCS, Infosys, Tech Mahindra, Wipro and many others do in India. These 4 companies employ 450000 (yes, not 4,500, not 45,000 but 450,000. Four hundred and fifty thousand employees), 242000, 125000, and 175000 people respectively and made $23B, $13B, $5B and $9B in revenues respectively. Over 95% of this revenue is "exports", meaning the money came in foreign currency. And they have over 20 of such companies in India, employing in hundreds of thousands. Imagine we had just one in Nigeria. But no, it's only hotel and filling station we can build. Ordinary call center, we could not do. We had to wait for an Indian company disguised as an "African Company" to come and get BPO contracts from our Telecom companies. That Indian company is employing thousands of Nigerians across several locations today. Only in Ibadan, they have over 2000 staff at their call center. All this while Nigerians blamed the government.

As we talk about making policies for ease of business, we should also ask, making these policies for who? Because it seems Nigerians are not ready to do anything apart from blaming the government.

So sorry to digress oo, back to your post.

I don't like the idea of CBN or government owning enterprises. They should just create policies and try to make things easier. In my opinion, the CBN is really trying, one can get low interest loans through the bank of agriculture and bank of industry. CBN is now the one doing the work of ministry of agriculture.

Even if they must own farms, they should have minority stake of 40% maximum, so that the private shareholders make the decisions. Before some stupid Nigerians enter government and kill the farm by using the management positions to reward their incompetent friends and relatives.

brandable:


Sir, too much wisdom in your post. Are you an economist or a subscriber of The Economist.

Which of the call center are you referring in the bolded.

brandable:


Sir, too much wisdom in your post. Are you an economist or a subscriber of The Economist.

Which of the call center are you referring in the bolded.

ahiboilandgas:
Airtel.