Zambian soybean trader expands business with edible oil production

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Over ten years ago, Sarah Ngwenya discovered collective farms run by women while working as a journalist in Ethiopia. Inspired by what she saw in the agricultural sector, the entrepreneur quit her job and returned to Zambia to start her own business.

In 2011, Ngwenya founded Kalomo Grain Marketing Limited (KGML), based in Mumbwa town, which operates as a grain production, processing and trading company. The first phase of the business involved marketing soybeans purchased from around 3,500 women farmers in six different smallholder groups across the country.

At first, the lack of funds forced the company to limit itself to trading in commodities. “We were in the business for about five years and that’s how we raised capital to buy land and an edible oil products processing plant,” she says.

Add value

Producing edible oil generates a much larger turnover than just selling soybeans because of the added value, according to Ngwenya. Supreme Oil was the soy-based edible oil brand that was created after this achievement. It is currently sold in Zambia where it is mainly used as a cooking ingredient.

In addition to the capital generated from the first five years of commodity trading, KGML was able to build processing plants and expand its operations with the help of two grants. The first was a € 20,000 grant from the UK Department for International Development to help boost the use and efficiency of Zambia’s local variety of soybeans. The second was a $ 100,000 grant from the American Foundation for Africa’s Development (USADF) in 2020 to build a 25 kW solar-powered oil processing plant.

“We are located about 40 km from the main grid, so we had to find a way to get a steady supply of electricity,” says Ngwenya. This helped push the production of KGML to 20 tonnes of soybeans per month.

Increase capacity

However, Ngwenya says that due to current capacity limitations, there is often an excess of soybeans that cannot be processed. As a result, the entrepreneur subcontracted part of the processing of KGML to other local companies. The company is looking to finance a new processing plant with a capacity to produce up to 60 tonnes of raw materials per month.

“It will help the business. For example, at the moment we have secured interests from a company in the Democratic Republic of Congo (DRC) but we will not be able to provide the full amount they need. We are looking for partners or donors; the plant is not for sale for less than $ 300,000.

Ngwenya recently found a supplier in China who will offer her a better price than buying the processing plant in Europe or North America. It must also take into account the payment of expensive fees to bring the equipment to Zambia.

Export capacities

The deal with a company in the DRC – to export 275,000 liters of edible oil – was the result of a trade mission to neighboring Zambia which Ngwenya joined. Although it can initially supply only 34,000 liters due to capacity constraints, Ngwenya says the DRC will be a key market for Supreme Oil in the future.

The company is also planning to establish operations in Malawi after KGML was approached by USADF to set up a similar processing plant powered by renewable energy in the neighboring country. “We received funding to replicate this project and chose Malawi because it is easy in terms of the language and even local dialects, which we can understand,” she says.

KGML hopes to export to the United States after taking part in another trade mission to the world’s largest economy. The demand for organic, unblended edible oil is very high in the United States, representing a significant opportunity for the growing company.

“From the numbers we saw, we would make a lot of money exporting to the United States.” However, Ngwenya says the company must first increase the quality of the oil to meet international standards.

Diversification strategies

A by-product of making soybean oil is a “cake” which has several uses. This provides KGML with another source of income, with edible oils accounting for only around 40% of the business.

The cake can be made into porridge and the company currently sells it in dry form to NGOs and hospitals. It can also be used as food for animals and fish.


Contact details for Sarah Ngwenya, CEO of Kalomo Grain Marketing

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