Tomato Jos

    02-Oct-2022
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Anand Laishram
Nigeria presents a paradoxical case when it comes to its agricultural sector- it is one of the largest producers of tomatoes in the world but is also one of the largest importers of tomato paste.
Let’s examine in greater detail.
Nigerians love tomato paste. It’s a central component of their cuisine.They use tomato paste in almost all of their most beloved dishes.
But almost all the tomato paste consumed in the country is imported. According to some estimates, Nigeria imports up-to $1.5 billion worth of tomato paste every year.
Most of the imported tomato paste comes from China, a country more than 12000 nautical miles away.
The paste is imported from China in highly concentrated form, which is then diluted and packaged in locally branded sachets.
Shipping a container of tomato paste from China comes with the following costs:
- Cost, Insurance and Freight : $23000 to $24300
- Shipping charges : $2000 to $4000
- Handling, unloading and customs fees, plus tariff : $2000
The paste that China exports to Nigeria is also of lower quality, that couldn’t be exported to Western and other developed countries, due to a failure to meet stringent quality standards. As a result, there has been a public health backlash in Nigeria, against tomato paste imported from China. Many Nigerians believe consuming Chinese tomato paste has led to widespread health issues in the country, earning it the unwelcome moniker of “killer tomato paste.”
All these could be avoided if Nigeria can process its tomato produce and produce tomato paste for local consumption. Nigeria is the 14th largest producer of tomatoes in the world, the 2nd largest producer on the African continent and the largest in the West African region. Nigeria produces over 2 million metric tons of tomatoes a year, going by the latest figures.
But about 900000 tons of the 2 million go to waste.The reasons behind this massive post-harvest loss being:
- Poor supply chain management
- Inadequate storage facilities and water & power supply
- Price depression, because tomatoes are highly perishable and have a limited time window for being sold and processed. 80% of tomatoes are harvested between January and April. This leads to price volatility and market glut.
- Pests and diseases
- Heavy rainfall during peak season
- Poor marketing
- Multiple local and state level taxes and levies
- Corruption by airport and seaport officials
- High costs of processing, packaging and storage machinery and equipment
- Underinvestment in human capital has left Nigerian farmers less productive
Many companies have also tried their hands at successfully running tomato paste processing plants, including Dangote Group, the multi-billion-dollar Nigerian conglomerate.
But most of them have failed to succeed financially.
Amajor reason is that productivity of tomato farming in Nigeria isn’t high enough to make investments in processing plants economically viable.
We will look into this in more detail later.
The other reasons for the failure of tomato processing plants are:
- Poor management
- Over investment in expensive production facilities
- Under investment in farming and logistics
As a result of all these reasons, Nigeria has been caught in a vicious cycle of producing a lot of tomatoes but most of the tomatoes going to waste, and then having to import tomato paste from other countries.
TOMATO JOS
This is where, Mira Mehta& Tomato Josenter the picture.
Mira, who has a background in community health, was working in Nigeria in 2008, as a member of the Clinton Health Access Initiative.
Mira witnessed the tomato market glut herself. She saw, what she describes as, crimson carpets of tomatoes rotting away on the sides of the roads.
She decided to tackle this issue and contribute more directly to the development of the Nigerian economy and upliftment of Nigerian farmers.
She went to Harvard Business School in 2012, to equip herself with the training and network she would need to achieve her goals.
After graduation, she co-founded Tomato Jos in 2014 with the objectives of reducing the post-harvest loss and developing a tomato paste brand, made from locally produced tomatoes.
(Her co-founder, Shane Tiernan, left the company after a few years)
Mira and her team deeply studied where the previous attempts by other processing companies and entrepreneurs had gone wrong. She also consulted with the biggest tomato growers and processors in California, USA.
She learnt that she had to focus on the entire value chain- farming, logistics and processing; instead of just focusing on the processing aspect.
She deployed a systematic, multi-year strategy, which involves:
1) Increasing the productivity of tomato farming.
2) Starting an economically viable tomato paste processing plant.
3) Launching a proprietary packaged tomato paste product.
Increasing the productivity of tomato farming
Tomato Jos operates its own commercial farm, which is one of the largest active tomato farms in the entire country.
It also has a smaller model farm where farmers are trained.
Farmers join the company’s Model Farm Program and they are taught best practices on increasing their productivity, through a mixture of classroom and field-based training.
The program aims at optimizing about 100 specific farming behaviors. To be contd