How Yemisi Iranloye built a billion naira business, just years after leaving paid employment
Although she didn’t have a solid grasp of what she would be doing with the real estate, she also incorporated a company that year, Psaltry International Limited.
After the incorporation, she started to ask herself what kind of business she would love to do when she left paid employment. She found her answer when she observed the pain of the farmers who supplied raw cassava to her company. The farmers lived in the hinterlands and had to transport their goods to distant cities like Lagos and Akure to sell their cassava for processing. But due to poor roads, outdated trucks, and the time-gap between harvesting and sales, they faced frequent product degradation.
“Sometimes when we did starch analysis, cassava that actually left the farm with about 17 per cent starch content, would have dropped to about five per cent, and that meant less money for the farmers,” Yemisi said one afternoon in June, during an interview held inside an office building on Psaltry premises. “Sometimes we rejected the cassava, because they are already rotten.”
From this observation of the farmers’ misery, she decided to, upon leaving paid employment in 2011, to set up a cassava processing plant in Ado Awaiye. It was a bold, brash move. There was no power, no connecting roads into the community and no water. At Alayide Village, Psaltry’s host community, Yemisi built the community’s first hand-pumped well-water.
“I told myself I wanted to do cassava differently than it was being done at the time, so I decided to meet the farmers where they are, to close the gap,” she said. “I believed I could surmount the challenge of road, power, and human resource.”
In 2012, after a brief stint with Nigerian Breweries, Yemisi relocated to Ado Awaiye and started the journey of building Psaltry from scratch, a company that milks food-grade starch from raw cassava. Her business model was to get small-holder farmers and transform them into commercial farmers. Although a lot of people told her it was not going to work, she was ready to find out. “I was ready to take the pain,” she said, “it meant no party, no wedding-attending, no aso-ebi; I was just trying to grow the business.”
The first major hurdle the business had to leap was attracting funding from financial institutions. But Yemisi was a visionary. When First Bank asked her to write a business plan, she wrote down her vivid thoughts for the business and plans for growth. The bank executives were impressed. The lady who approved her loan request drove from Victoria Island to Ado Awaiye on the eve of the approval and told her they were investing, not because she had provided collateral, but because she had left everything behind to start the business. “You can’t afford to let it die,” the banker said.
Out of the money she got from the bank, Yemisi decided to take a risk on her local farmers. Psaltry started to buy tractors, herbicides and clustering the farmers into groups to provide them with training. The idea was to help the farmers grow and increase yield, thereby ensuring that the factory has access to enough raw materials to keep its end of the bargain with buyers. It worked. A farmer who was cultivating one acre of farmland started doing 15 acres. About 2,000 small-holder farmers are now cultivating about 4,000 hectares of land, producing about 60,000 tonnes of cassava per annum.
“Before Psaltry, we were only farming to survive,” the Baale of Alayide, Psaltry’s host community, Busari Dauda, told THISDAY. “We had no tractors, but our hands and hoes. She encouraged us to farm in commercial quantity. She bought us improved cassava seeds and we started to farm and see the difference. She dug us a borehole, even before the company started. She also helped us gain government funding. Farming was suffering, but when we started selling to Psaltry, I bought a car the second year. That’s what has encouraged many of us to go into commercial farming.”
Today, Alayide has been electrified, has a water source and has witnessed a significant population surge. The community currently cultivates about 500 hectares of cassava and enjoys the availability of a ready market for its products. “The farmers have come to trust us,” Yemisi said, “they also see this factory as their own and we have received loyalty from them. That’s one of the major ways we have been able to get raw materials for the factory.”
Although Nestle was Psaltry’s first major customer, it was Nigerian Breweries which helped take the young processing company to the next level.
Following the cassava
In 2016, Nigerian Breweries, the pioneering brewing company in the country, turned to cassava as a source for starch, an ingredient critical to the production of its varied brands of beer and malt, including Heineken.
The brewing company is looking for innovative ways to locally source for its production inputs and the food grade starch gotten from local cassava is helping it achieve just that. “We are growing and looking for opportunities,” the company’s Corporate Communications and Brand Public Relations Manager, Mr. Patrick Olowokere told THISDAY, “the quantities of imported barley are decreasing and Cassava boosts the local content.”
In 2013, Nigerian Breweries began to partner with Psaltry to help develop the capacity of the firm and the farmers supplying the raw materials. They linked up Psaltry with 2scale, a Dutch funded non-profit with the objective of accelerating inclusive businesses in the agri-food industry. 2scale took the burden of training local farmers off Psaltry shoulders and helped the latter free its cash-flow. “They hired one of the best agronomists in the country to train our farmers,” Yemisi said, “and the farmers started to imbibe higher degrees of agronomic practises, compared to their counterparts.”
Also, Nigerian Breweries committed to buying 60 per cent of Psaltry’s output and facilitated a seven-day receipt process, to improve the processing company’s cash-flow and allow them take more products from farmers. It was a win-win situation for both sides.
Last year, when the foreign exchange crisis deepened, Yemisi said her company received a deluge of requests from firms who could not import their starch. They struggled to meet up with demand, but successfully saved Nigeria about $4 million, she said.
The land is green
Today, four years after starting production, Psaltry has emerged as one of the biggest cassava processing companies in the country, with two lines that each produce between 20 to 30 tonnes of food grade starch per day; that’s about 10,000 metric tonnes per annum.
“We are looking to grow bigger and trying to increase capacity,” Yemisi said. “We have about 300 staff and run this plant non-stop, except when we shut down to clean and do maintenance. We have staff quarters that house about 40 per cent of our total staff. We have a clinic and a canteen that offers employees one free meal per day and we have a small gym where workers can exercise.”
Yemisi, who studied Bio-Chemistry at the Federal University of Technology, Minna, before obtaining a Masters Degree at the University of Ibadan, pointed out that the key to her success was the ability to stay motivated when the odds did not look good. “It’s a business for someone who is tough,” she said, “one must be resilient and be ready to sacrifice at least three years of the business to grow the structure. The structure is not something that can be done in nine months; but if you are patient enough to grow the structure, it is something that can be here for a century.”
The ability to build a structure is a virtue she quietly harps on. Most Nigerian entrepreneurs, she said, want to start a “project 100 per cent”. But it does not work that way. “We are in the process of generating our own power, but I started with generator. So entrepreneurs should learn to start gradually.”
She has also been able to build a company with Nigerian colouration. “Everyone here is Nigerian,” she said. “We have taken the pain to train our people because we want continuity. We can repair our own machines.” And a gender-sensitive farming population, too. “When we started, we had more old men. But we had a policy to have 40 per cent women. Now, we have about 40 per cent.”
Perhaps, the most fascinating aspect of Yemisi’s vision for Psaltry is to allow the farmers, who are growing wealthier, to own at least 10 per cent of the company. She says she wants them to feel part of the project. And it’s a brilliant move.
After gaining the trust of its bankers, its clients and its farmers, Psaltry’s future is sparkling, and the woman behind it makes it look so easy.