SMEs digest: How local avocado oil firm adds value to farm produce

How local avocado oil firm adds value to farm produce

What you need to know:

  • Founders of Nzallacado Oil Company narrate how they started production manually first before going into use of machines and how that has impacted prices in Tanzania

Dar es Salaam. When Dar es Salaam-based Nzallacado Oil Company ventured into fruit farming in 2005, the idea behind it was to sell the farm products locally.

For starters, firm’s founders – the Shafia Nzallawahe family – cultivated a 20-acre farm on which they grew Hass and Fuerte avocado varieties.

Hass avocados are large-sized, and weigh between 200 and 300 grammes. They were first grown in Southern Californian, the US, by horticulturist Rudolf Hass. On the other hand, Fuerte avocados are a hybrid of Mexican and Guatemalan avocados which are also farmed in California.

Seven years after the company started farming avocados, harvesting of the same started. However, new varieties found it difficult to penetrate the Tanzanian market, as consumers still favoured the traditional varieties.

In consequence, the Nzallawahe family was compelled to lower the prices of their avocados, their high quality production costs notwithstanding.

“A lot of our fresh harvests remained unsold – and that was how we came to think of reducing the losses through processing the avocados,” Shafia – the second-born in the Mr Twahir Nzallawahe family told The Citizen.

The family, therefore, started making avocado oil – doing so manually at home: boiling the raw material from the fruit in pots and filtering the oil by hand.

The quality of the processed oil wasn’t particularly impressive, and they decided to seek relevant skills and technological applications from the Small Industries Development Organization (Sido).

“Manually, we were producing only 100 litres of avocado oil per seasonal harvest. However, when we started to use Sido machines, the quality of the oil improved significantly. But the quantity produced was still low,” Ms Shafia says.

In 2015, the family – under the leadership of Mr Twahir Nzallawahe – held consultations with a Chinese firm on ways and means of improving their avocado oil productivity.

According to Ms Shafia, the family ended importing oil-making machinery from the Chinese company, and started production of avocado oil in earnest.

“Mr Nzallawahe invested about Sh30 million in setting up a small oil-manufactory by building the requisite premises, as well as installing the machinery imported from China,” Shafia says. “We later bought more machines through sponsorship by Tanzania Local Entrepreneurs Development (TLED), a Sido subsidiary in 2018,” she recalls.

Noting that their oil processing plant increased the value of their avocado fruits, Shafia says in addition: “When we started processing in 2016, the avocados were being sold at less than Sh400 per kilogramme in Njombe. Our factory created competition with avocado exporters – and fuelled a price rise to Sh1,200 per kilogramme!”

During the same year (2016), the family registered their enterprise Nzallacado Oil Company Limited with the Business Registrations and Licensing Agency (Brela).

Today, the company – located in Iringa town in Iringa Region –produces and distributes natural oils for skin and hair treatment, including avocado oil, pumpkin oil, moringa oil, castor oil, neem oil and baobab oil.

“We produce the oils from various local seeds and fruits by using cold press technology,” she narrates.

“All our oil products can be applied to the skin and hair, but pumpkin and moringa oils are particularly for use in improving one’s health, as they are rich in nutrients.

“We are restoring our traditional materials. For example: castor oil was available in almost every house as a medicine for various diseases such as worms, wounds, pains and constipation. Castor oil was also used in the olden days to massage the bodies of newly-wed brides so as to avoid acquiring a ‘snaily skin’,” Shafia says.

The holder of a Bachelor of Science degree in Food and Biochemical Engineering from the University of Dar es Salaam – and a wife and mother of two children – Shafia is the company’s business development manager.

The company also employs a production manager, two sales managers and three casual labourers.

Shafia is also a ‘Halal Auditor,’ with the requisite skills in checking if the ingredients and steps used in food production strictly comply with the Halal certification requirements as per Muslim law.

Furthermore, she is certified by Sido as a consultant and trainer.

“Earlier, I was employed by two different private companies. However, I faced too many challenges – and quit the jobs,” the 29-year old Shafia says – adding that the finally decided to go and develop the family business.

“It was easy for me to run and develop this company because all the works here directly relate to my profession,” she explains. Nzallacado Oil Company Limited is currently producing up to seven tonnes of avocado oil a year – depending on the avocado fruit production and the market.

The family company’s current production capacity is higher than the 100 litres which the family was producing manually in the early days.

“We produce up to five tonnes of castor oil per month while pumpkin oil, moringa oil and baobab oil production stands at 100-500 litres, depending on the market trends,” she reveals.

In this regard, the company has restored the value status of pumpkin production – what with its richness in ingredients, particularly zinc, she says.

“Nzallacado produces and sells pumpkin oil with lots of zinc minerals. We are aware that one milligram of pumpkin oil provides enough zinc for the human body in a day. But we recommend the use of five milligram per day,” she waxes hygienic.

Zinc is found in cells throughout the human body. It is needed for the body’s defensive (immune) system to work properly. It plays a role in cells division, cells growth, wounds healing, and the breakdown of carbohydrates. Zinc is also needed for the senses of smell and taste.

“Pumpkin oil is good for the heart and brain of kids, the youth and the elderly, and a richness in zinc controls and reduces stresses,” she explains.

The firm buys more than 90 percent of its raw materials (seeds and fruits) from the farmers around it – and grows the remaining ten percent itself. “We are able to store up to ten tonnes of non-perishable raw materials annually, for instance castor seeds. Farmers benefit from the sale of their produce to us at equitable prices,” she says.

In 2019, a kilo of castor seeds was sold at Sh400 only. Today, the price has shot up to between Sh1,000 and Sh1,200 per kilo.

“Before we started our operations, pumpkins farmers in Iringa were throwing away the seeds. Today, they sell the seeds to us at the price of Sh150,000 per a sack-full of pumpkin seeds,” she says.

Shafia says the major challenge confronting the Nzallacado Company is a stable market for its products.

Indeed, Mr Nzallawahe told The Citizen that they are currently producing under-capacity due to market challenges.

“We are currently producing only seven tonnes of avocado oil, while our full production capacity is 20 tonnes per harvest season,” he states.

He also says the company’s products need wide-reaching promotion locally and internationally.

“The market potential is promising. But our products are still new to most Tanzanians. I hope to get a market expert or company that would promote our products and expand our market size. I’m ready to share the profits,” he said.

The company, according to him, has been participating in various trade and industrial exhibitions to promote its products and rope in more customers.

“We currently focus on the local market because it is easier to penetrate. The global market is too competitive for us, as there are some countries which produce the same products at cheaper costs – and can, therefore, sell them at cheaper prices,” he said.

Asked what his future plans are, Mr Twahir Nzallawahe said he plans to buy more oil-processing machines and increase production when the market becomes more viable.