Agriculture remains the predominant economic sector of African economies. More than 80% of African countries still rely on agriculture as their primary source of revenue. This makes sense because the African continent is perhaps the richest continent in terms of natural resources. And land is one of the most fundamental resources to ever exist. African economies fathomed the need to process agricultural commodities in order to remain competitive. And one company that decided to make the agricultural industry competitive in Africa is Jubaili Agrotec, Ltd.
Jubaili Agrotec, Ltd. is a manufacturing company that processes agricultural products. It provides bird repellent, concentrated fertilizers, seeds, and fungicides. The company was established in 2002 in Nigeria by the sons of Abdullatif Jubaili as the fruit of their strong solid experience in the field of agriculture and of their reliable sources for quality products. The first branch was established in Kano, Nigeria, and covered around 60% of the agriculture in Nigeria. The company opened a second, third, and fourth branch in 2004, 2010, and 2011. It is one of the largest privately-owned companies in the agriculture industry. The company generates $27.9 million in annual revenue and has over 2,300 employees in sub-Saharan Africa and supplies its products to nearly 50,000 farmers in the region.
Why is Jubaili a successful company transforming agriculture in Africa? Jubaili does not only focus on processing agricultural commodities. It also focuses on distributing the commodities it processes. Here, we see again the application of vertical integration. By manufacturing and distributing, the company is able to increase its production capacity. More importantly, the application of vertical integration enables the company to lift many people out of poverty because they are hiring two types of people: those who manufacture the commodities, and those who distribute these commodities.
In late 2022, Jubaili received a $35 million investment from the International Finance Corporation (IFC). The purpose of that investment was to increase smallholder farmers’ access to key inputs and boost food products to strengthen food security in sub-Saharan Africa. The bank in a statement asserted that the financing package would help Jubaili expand its production capacity in Nigeria, Ghana, Tanzania, and Uganda, helping to offset Africa’s reliance on agrochemical imports. This investment is crucial because it will help African countries trade agricultural commodities with one another rather than importing these same commodities from another country. As part of the deal, IFC would also provide consultancy and advisory services to Jubaili to develop technology such as drip-irrigation hardware to encourage greater acclimatization and minimize environmental impact. When the Ukraine invasion commenced, many African countries were affected by it because Ukraine has been the main supplier of agricultural commodities to Africa. Ukraine had to cut its supply to Africa, which created a shortage in agricultural supply. With that recent investment, Jubaili now has the opportunity to become the number one manufacturing company of agricultural products in Africa.
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