Did you know that if you start exporting fruits and vegetables, you can actually build a self-sustaining business?
Many Ugandans have ventured into this area and understand what we are talking about here.
The advantage is that Uganda is endowed with a diversity of fruits and vegetables which are grown countrywide.
These include avocado, butter fruit, passion fruit, water melon, pineapples and mangoes, among others.
This provides you with an opportunity export organically grown products, whose demand is high internationally.
The global organic food and beverages market is expected to reach $327.6b (Shs1,020 trillion) by 2022, according to a report compiled by Allied Market Research.
The growth of the organic market overall, according to the report, is attributed to rising income levels, improvement of organic farming techniques, and increased awareness regarding the health advantages of organic foods.
In other words, the availability of all these fruit varieties and vegetables should be reason enough for you to think about investing in the export market.
According to Newton Buteraba, the chief executive officer of House of Wealth, a local firm that offers business advisory services: “Before you start make sure that you have a contractual obligation with reliable suppliers.”
This, he says, will help you specialise in the supply and exportation of particular fruits and vegetables that you are most comfortable with.
Just like any other business, for one to start exporting, according to Buteraba, you need to put your business in order by registering with the relevant authorities such as the Ministry of Agriculture and Uganda Export Promotion Board, among others.
The beauty of this business, you can start small and capital of about Shs10m will take you far.
The money will certainly be used to buy stock (fruits and vegetables) of about five tonnes, logistics, and packaging and clearing export documentations.
According to John Lwere, the export promotions officer at Uganda Export Promotion Board, Shs10m, if well utilised, can fetch you returns of more or about 30 per cent, which translates to about Shs3m.
Which means that Shs10m has the potential to return an annual turnover in the excess of Shs36m if other factors remain constant. According to experts, the biggest percentage of investment goes into freight costs, depending on the volumes.
However, the business is no without challenges as there are a number or requirements that might be hard to fulfil for an ordinary business person.
These challenges can be categorised into production, post-harvest, pack house and market challenges
Uganda as a market continues to experience inconsistency in production and lack of trained agronomists, which has had an after effect on the quality of many produces.
Beyond that many farmers have no cooling facilities yet fruits and vegetables have to be kept fresh.
The other challenges are lack of proper transport facilities, poor tools and farm equipment.
However, the biggest challenges are related to market requirements that lock out many varieties of fruits and vegetables from Uganda.
The requirements include a total elimination of harmful organisms or pests, proper post-harvest handling and properly defined inspection procedures.
Beyond this is the expense that comes with the business.
According to experts, all products that are processed or manufactured for export must be well packaged and labeled ‘for export’.
To get to such a level it means one must have registered as a tax payer.
However, in all this, it doesn’t harm to consult with Uganda Export Promotions Board to get clarification where you need.
For instance, the requirements for eco-labeling differ from one market to another. Other inquiries include finding buyers, opening a trading account and pricing, among others.
The exporter is required to appoint a customs agent to transact on their behalf as well as obtain an export license from the Uganda Export Promotions Board.
The exporter must also secure the services of a licensed transporter (where applicable).