From start up to scale up in two years

It was a ginger-grinding shift not a chilli pepper shift during my second visit to the AACE Foods factory in Lagos earlier this month – yet this didn’t make a difference to my constant sneezing and coughing. Other than that an awful lot has changed since my first visit in March 2011 and coming back to meet the company again in July 2012.

I first met with Ndidi and Mezuo Nwuneli, Directors of AACE Foods to set the baseline for one of the early BIF-supported companies in Nigeria. The entrepreneurs had set up the company with the vision to develop a value chain for locally sourced, processed and distributed foods for business-to-business and business-to-consumer sales. Operations to produce spices, jams and spreads in their little factory (see picture below) had been running for almost a year by then and everything was progressing according to plan.

However, buying raw materials from the wholesale market in Lagos resulted in lack of quality control, inconsistent supply volumes, lack of traceability and an indirect and unclear benefit to smallholder farmers. Hence for a number of commercial reasons, but also following its strong vision of delivering social and development benefits to Nigerian small-scale farmers, AACE Foods sought support from the Business Innovation Facility to develop a localised supply chain. Through BIF support, a supply chain study helped to develop a sustainable robust system for sourcing from local suppliers.

More or less a year later the company has developed strong ties with farmer cooperatives in Northern

Nigeria ensuring more direct links to the farmers. Ginger and chilli pepper are now procured locally which in turn has reduced purchasing cost per kg by 20-30%. In particular, a strong relationship has been developed with the Sabzuro ginger co-op in Kaduna State from which 100% of ginger is procured (see picture). As Mezuo Nwuneli explained to us during our visit – developing a local supply chain is hard work but with commercial rewards.

AACE production volumes for spices have increased by more than 300% from 2010 to 2011 and are still rising: from 25 metric tonnes (mt) of spices sold in 2011 to already 51mt in the first six months of 2012. Acquiring a permanent factory site with sufficient room to accommodate the anticipated growth over the next years was therefore a priority for the first quarter of this year. The investment funds and space have been found and machinery, supplies and all staff members will have moved to the newly-purchased plot by the end of August.

The new site offers space, lots of space – the 5,200 square metres of land with 1,400 square metres of build-up space including three production sheds (see one below in picture) will enable AACE foods to increase current spice production volumes from 400-500kg to 2mt per shift from the beginning of September and offer enough space to realise AACE plans for the business extension into new product lines in due course.

I am already looking forward to my next visit to this inspiring inclusive business example– I expect a lot of change and progress. But I doubt I will have learnt by then how to control the coughing and sneezing.

Click here to watch a 4min video clip with Mezuo Nwuneli explaining AACE development over the past two years.