Face to face: entrepreneur meets investors

Ndivisi is a Kenyan company that has recently made the transition from trading soybeans to processing them. The company, which is currently requesting for a new loan, is on the verge of scaling significantly. During his visit to PlusPlus, co-founder James Ododa tells the story of his company and why they decided to take this step...

A nutritious opportunity

James: “I co-founded Ndivisi, a soybean trading and processing company, back in 2015, together with Esther Njoroge. I have a background in investment banking and used to work for one of the local investment banks in Kenya. But although the job was good, it wasn’t fulfilling for me. I grew up in a family like any other in Kenya, with a father as factory worker and a stay-at-home mom who also did some farming. She would grow maize just to get extra income. The experiences of both my mother and my father gave me the push to do something else.

Starting Ndivisi, we were looking for a way to bridge the protein gap and decided on soybean, a vegetable protein. Back in the day soybean was mostly used for animal feed, but also for human consumption. But it was not very well known back then.”

Birds, snakes and hippos

“We started out small, with a group of Kenyan farmers who had gotten stuck with another product. They agreed to start planting soybeans, but their produce was very small. We were wondering why, so we decided to try it ourselves. Because that’s what you do as an entrepreneur, you sort of just jump into things to try and find solutions. We started farming soybean ourselves in the first season of 2017. We got land and did everything: purchased the seeds, prepared the land and started planting. It was very interesting and a good experience for us, because it turned out we weren’t really prepared for what came next.

That season, we encountered several challenges. First, when the seeds were budding and came above the ground, they were eaten by birds who were just waiting there for it. Every morning we had to get young men from the village to chase the birds away. Also, at some point we discovered we were coexisting with a snake on the farm. It was its’ natural habitat, so we left it there and just monitored it. And since we planted very close to the lake, late every evening the hippos would come out of the water, using the farmland as an easy passage. So we had to hire security day and night to chase all the animals off the farm.”

Know your market

“In spite of all that, we somehow managed to break even. Looking back, this was because we knew beforehand where we would sell the soybeans after harvest, at what price and with the quality and other requirements demanded by the customers. In short: we already knew the market. We had grown the soybeans together with the farmers in the village. Whatever we did, they also did, and the other way around. The whole experience gave us an exact understanding of the challenges farmers face. In the end, it gave us our proposition for Ndivisi: to provide a reliable, consistent market to these farmers, initially as a soybean trader.”

Expanding to Uganda

“Because we had corporate customers whose demand for soybeans was higher than what the Kenyan farmers could deliver, we expanded our farmers network to Uganda. Our research had discovered that there was a lot more soybeans coming from North Uganda, where the farmers had not yet found a proper, consistent market for it.

We now work with over 2.000 farmers in Uganda. We found these farmers by working with a ‘lead farmer’ model. In the villages, farmers typically tend to coalize around one big farmer, someone who they know has access to the market. We call them lead farmers. Joan Akulu is one such lead farmer. Around each village, you have one or two lead farmers, each with 50 to 100 farmers around them. For us, our contact point was with these lead farmers. As a small trader, we were unable to meet each individual farmer, but through the lead farmers we can still reach them. Currently our network spreads over 4 districts, with around 500 farmers per district. As we grow, our plan is to reach between 1.000-2.000 farmers per district.”

A new direction

“Last year was quite interesting for Ndivisi. After several years of operating as a trader, where we bought raw soybeans from the farmers, cleaned them and sold them to our clients, we found that our scale wasn’t growing as fast as we wished it to. One of the reasons was that as a trader, you are limited to what you can offtake. As a processor, on the other hand, you can access a pool that can grow: in terms of how much you can offtake, how many more people you can employ and how many more farmers you can engage. So at the end of 2021 we started fundraising, which led us to business booster Truvalu (one of the co-founders of PlusPlus),  whom we approached with a value proposition that not merely focused on cleaning and trading soybeans, but on adding value through processing as well.

We wanted to do mechanical extraction, whereby we crush the beans mechanically to obtain soybean meal and crude soybean oil. This is used in a variety of market segments in Kenya, not just animal feed but also for human nutrition. For example, it is used in infant formula because of its nutritious value. Bakers use it as well, to boosts the protein content of the bread, and it is used in products to replace meat. And of course for animal feed. So we already have several markets to sell to with the same ingredient.

Truvalu helped us with an investment, to acquire machinery, and we completed the transition in August 2022. With this transition, the business also required more working capital. This is where PlusPlus comes in, to provide the working capital we need to acquire more soybeans from the farmers. We bring the soybeans to our factory for processing into the different categories of soybean meal and crude soybean oil, and then sell it to our corporate customers in Kenya.”

What about impact?

In the conversation with the two investors, James is asked how successful his company has been in improving peoples’ lives, in creating social and economic impact. Does he see any improvements?

James: “Yes, definitely. Ndivisi is able to increase the income for poor farmers by offering them a reliable market, season in season out. This was missing before. We chose the soybean value chain because it is not as developed yet, but also for its’ ability to contribute socially. We want to offer farmers an option beyond the corn they plant for daily consumption. With soybean, they can also produce a cash crop that generates an actual income for their families.

On the food security side, we were able to produce food ingredients that help bridge the protein gap, which is quite significant. We mostly rely on meat as a source of protein, but nowadays we see a trend where people are looking for other, vegetable proteins. For that, soybean is the number one source. Before, ingredients like soybean would be imported, but Ndivisi is now cutting that import by producing it locally, which is good for local employment and the local economy. And it boosts the entire value chain, creating jobs. From those who transport the product, to workers at the processing plant or even seed suppliers. Throughout the value chain there are people who can build an income. This number will grow when the value chain grows. The investments we received allowed us to take the lead in that.”

Dreams for the future

When asked if he has ideas for other products in the future, James responds: “Yes. The same pool of producers for soybeans also produce other oil seeds, like sunflower seeds and sesame, crops that produce highly nutritious oil. We are looking at that to be included in our production line as well. This will further increase farmers’ incomes. They can produce it all on the same piece of land, segmented into different cash crops, and then the next season they rotate them. Maybe in a few years’ time we will have more commodities in our pool.

We grew from being a small trader to a processing company that has much more to offer. Now, we are looking to grow fast and work with more and more farmers. We have realized that historically most of these farmers are women. So working with more farmers, also means more income for more women. We hope to increase the number of people we employ, and to expand our product portfolio. There’s still plenty of room for us to grow...”

Do you want to help Ndivisi realize their plans? You can! Click here to read how…